Raising Capital for Your Startup

Sean Ammirati

Partner, Birchmere Ventures Adjunct Professor, Carnegie Mellon University

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Only a few companies should Raise VC $

(but that is our focus for next 45 minutes)

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When should approach VC re:investing?

Revenue EBITDA

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A VC’s Job: !

Step 1: Find the best companies

Step 2: Invest on rational terms !

Step 3: Help them grow till exiting for a much higher valuation

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1 Investment: 100 - 150 Pitches

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What makes a great investment?

The Relevant Question ...

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1 Fantastic Team 2 Large Market 3 True Differentiation 4 Market Validation 5 Fit with the Fund

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Rational Terms

• Amount

• Preferences

• Control

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Quick Summary

• Liquidation Preference

• Board Seat

• Budget Approval

• Information Rights

• Pro-Rata Rights

Pre-Money Valuation

Investment

Post-Money Valuation

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How do you determine valuation?

• Team, Traction, Stage & Sector

• Exit Expectations (next slide)

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Exit Expectations

At early stage 10x

Success

Return Capital

Write Off

Portfolio 3x (really relative to other VCs same vintage)

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For Next Week ... !

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~7 Slide / 15 minute “Pitch”

1.Problem & Solution (summarize AE 1)

2.Business model (summarize AE 2)

3.Market Opportunity (summarize AE 3)

4.Next MAP you want to validate

5.Mockup or Specification for that MAP

6.Projections and milestones (beyond next MAP)

7.Budget

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