Babson SVP - Fundraising Workshop - July 2023
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Overview of fundraising basics, a 3-step playbook of the tactics of raising a seed round, and general pitch tips for student entrepreneurs
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Babson SVP - Fundraising Workshop - July 2023
- 1. Fundraising and Ways to Grow Workshop J U LY 2 0 2 3 davidchang.me/startup-tips David Chang @changds GM, Expert Network @Hunt Club Co-founding member @TBD Angels
- 2. Fundraising Basics How to Raise a Round Pitch
- 3. Background as software developer at a big company
- 4. Startup operator and investor $150m raised 100 companies 5x return
- 5. High potential of student entrepreneurs
- 6. What’s the business trajectory? Lifestyle or social good Linear growth or revenue fueled High growth, scalable venture
- 7. Capital sources have tradeoffs Equipment Financing Traditional VC Micro VC Angel Groups AngelList Angels Corporate / Strategic Venture Customers Jobs Bill Portal Crowdfunding Vendors Founder Friends & Family Crowdfunding Grants- Gov & Foundation Venture Debt Bank Loans Personal Loans Private Equity Competitions Accelerators & Contests Impact Angels & VCs Size Cost Source: Jean Hammond & MassChallenge
- 8. Venture capital stages Growth Equity Early Stage Angel Friends & Family
- 9. How the VC game works Skewed return distribution VCs must swing for the fences
- 10. Raising a Round
- 11. How Much to Raise • Basic financial model of cost drivers and revenue • Forecast monthly for 2 years • Fundraise rule of thumb: 12-18 months’ cash
- 12. Use of Proceeds • Build product • Grow team • Marketing • Customer acquisition • Working capital
- 13. Milestones See techcrunch.com/2015/06/24/running-out-of-money-isnt-a-milestone Team Product Development Market Demand Product / Market Fit Business Model Execution
- 14. Fundraising Basics How to Raise a Round Pitch
- 15. What obstacles stand in your way?
- 16. Just hustle?
- 17. Aim for a tight target Break down barriers Create FOMO The ABC’s
- 19. Shotgun blast doesn’t work
- 20. Target investors using 6 filters
- 21. Stage
- 22. Stage Location
- 27. Social / Trust Your ideal investor meets 6 filters Thesis Business Model Industry Location Stage
- 28. bit.ly/boston-area-investors-firms University Focused Corporate VC Angel Groups Seed Stage Growth Stage Early Stage VC Tech VC Healthcare, Biotech, Energy Local Investors
- 29. Tools to build the pipeline
- 30. Prep the basics ✓ Blurb (1 paragraph) / teaser (1 page) ✓ Pitch deck (10 slides) ✓ Financials and budget ✓ Legal representation ✓ Founders agreements
- 32. “Looking for feedback on the idea” “Who’s knowledgeable in this space?” “I’m not raising right now” “If you want money, ask for advice…”
- 33. Improves hit rate by 10x Doesn’t start the clock Creates trend from data points Why not just ask for money?
- 34. Don’t make knee-jerk changes Incorporate feedback Refine pitch Spot consistent themes
- 35. When to stop fishing?
- 36. C Create FOMO
- 38. Land the anchor investor “I’m closing a round” “Moving faster than expected” “Can I hold a space for you?”
- 39. Finish strong Full throttle to avoid mid-flight stall Leverage current investors to pull in new ones “Oversubscribe” optics
- 40. Close the deal • Rolling close vs. set close • Not done until money is in the bank Key terms ❑ Board composition ❑ Option pool ❑ Voting rights ❑ Founder vesting ❑ Change of control ❑ Redemption rights ❑ Information rights ❑ Anti-dilution
- 41. Works for first-time founders too
- 42. Investor FOMO? Here's Everything Early-Stage Entrepreneurs Need To Know About Fundraising $250k $1.5m
- 44. Aim for a tight target Break down barriers Create FOMO The ABC’s
- 45. Fundraising Basics How to Raise a Round Pitch
- 47. Define your target audience Investor Customer Partner Pitch Competition Showcase Event / Booth Media & General
- 49. Anchor your summit & basecamp
- 50. Don’t share everything at once 1 Sentence 1 Paragraph 1 Page 1 Deck 1 Follow-up Deck
- 51. Adapt content to the venue Home Office Coffee Shop
- 52. Don’t overreact to feedback Incorporate feedback Double down on consistent themes Avoid whiplash changes
- 53. Don’t be sloppy and miss details Typoos capitalization & punctuation, Font & sizes Alignment Color Design (icons, photography, clip art)
- 54. Typical Parts Intro Problem Solution Market Opportunity Product Go-to- Market Business Model Competition Traction Team Ask Appendix
- 62. bit.ly/startresources davidchang.me/startup-tips Marketing Press / Media Freelancers Agencies National Tech Journalists Boston Tech Journalists Legal Legal Templates Accounting Recruiters Real Estate Co-working Brokers Events Event Spaces Startup Events Listings Startup Community Groups Speakers/Mentors (WIP) Boston Women Leaders Investors Guides Lists Materials / Templates University Entrepreneurship Resources Competitions Student Groups Startup Resources General Guides Development Web Dev Shops Mobile App Dev Shops Tech Talent / Advisors Mobile App Development Tools Design / UX Graphic Design Resources Full-time Freelancers Agencies Product Pros Emerging Stars
- 63. Fundraising and Ways to Grow Workshop J U LY 2 0 2 3 davidchang.me/startup-tips David Chang @changds GM, Expert Network @Hunt Club Co-founding member @TBD Angels