What You Need To Know About Raising Venture Capital (By Mark Davis, DFJ Gotham)

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Business & Mgmt

Published on November 18, 2008

Author: markpeterdavis

Source: slideshare.net

Description

A brief presentation on some of the key factors entrepreneurs should consider when seeking to raise venture capital. A detailed manual on raising venture capital can be found at www.markpeterdavis.com.

What You Need To Know About Raising Venture Capital

Who Is DFJ Gotham Ventures? www.dfjgotham.com DANNY SCHULTZ MARK DAVIS ROSS GOLDSTEIN THATCHER BELL Focus Sectors Digital Media Financial Technologies E-commerce Mobile Technologies Network Infrastructure Early Stage First institutional round Nominal or no revenue Demonstrable technology Global Presence Leverage DFJ Network

Digital Media

Financial Technologies

E-commerce

Mobile Technologies

Network Infrastructure

First institutional round

Nominal or no revenue

Demonstrable technology

Leverage DFJ Network

Who Does DFJ Gotham Invest In?

What Is The DFJ Network? 23 funds, >$6 billion in capital 150 professionals, 600 portfolio companies Unique access, insight and deal flow

Markpeterdavis.com Chapters : VC Overview Developing A Fundraising Strategy Picking The VCs Preparing Your Materials The Pre-Fundraising Process Getting The Meeting The First Meeting After The First Meeting The Due Diligence Phase Doing The Deal The Entrepreneur’s Guide To Raising Venture Capital

Chapters :

VC Overview

Developing A Fundraising Strategy

Picking The VCs

Preparing Your Materials

The Pre-Fundraising Process

Getting The Meeting

The First Meeting

After The First Meeting

The Due Diligence Phase

Doing The Deal

What Makes A Company Successful? How you finance your company matters! Team Idea Finance

Is VC Right For Your Startup? Scalability of Business Capital Required to Achieve Breakeven Cash Flow High Low High Low Venture Capital Build a Giant Co Bootstrap Own 80% of a Small Co Not Viable Weak Barriers: Venture Capital Strong Barriers: Bootstrap

Can Your IT Company Scale? Technology Barriers Examples Tech-lite ( Old Tech Re-Applied ) Facebook, eBay, Twitter Data scale (e.g., Web 2.0 data) Network effects (e.g., SocNets) Tech-heavy ( New Tech ) Microsoft Office, Adobe, Skype Data scale Network effects Econ. Of scale Intellectual Property Hybrid Business Information Business Technology Business Tech-heavy ( New Tech ) Google, Oracle, Microsoft OS, Akamai Economies of Scale Intellectual Property

Tech-lite ( Old Tech Re-Applied )

Facebook, eBay, Twitter

Data scale (e.g., Web 2.0 data)

Network effects (e.g., SocNets)

Tech-heavy ( New Tech )

Microsoft Office, Adobe, Skype

Data scale

Network effects

Econ. Of scale

Intellectual Property

Tech-heavy ( New Tech )

Google, Oracle, Microsoft OS, Akamai

Economies of Scale

Intellectual Property

Why VC Is Helpful? Low High Friends & Family Angels Venture Capitalists Capital Advice Connections

Are You Ready For VC? Great Team Huge Market Product in Market Seed ($50K - $1M) X Series A (>$1M – 5M)

What Materials Do You Need? Get the meeting Executive Summary Create interest Presentation Explain how Financial Model

What Topics Do You Need To Cover? Executive Summary Presentation Location Mission Overview Addressable Market Competitive Landscape Barriers Achievements Financials Capital Raised Objectives Management Bios

What Topics Do You Need To Cover? Location Mission Overview Addressable Market Competitive Landscape Barriers Achievements Financials Capital Raised Objectives Management Bios Be sure to include these Not market size State why you’re better May be more than you think

How Do You Get The Meeting? Mutual Contact LinkedIn Cold Email Spam Most Effective Least Effective Direct Introduction

What Is The Objective Of The First Meeting? To get the second meeting. What is the objective of the first meeting?

How Can You Guide The Meeting? Product? Market? Competition? Team? Typical Non-Linear Meeting Set The Tone Up Front Product: Technology that solves… Addressable Market: $2.5B Competitive: Significant technology barrier Team: 35 years relevant experience

Product: Technology that solves…

Addressable Market: $2.5B

Competitive: Significant technology barrier

Team: 35 years relevant experience

How Can You Maintain Momentum? Industry News Milestones Internal Materials

How Do You Know You’re Close To A Term Sheet? Can you come meet the rest of my partners? How do you feel about these terms?

What Should You Expect In A Term Sheet? An Exploding Offer Exclusivity 30 day Due Diligence Participating Preferred Stock Liquidity Preference Founder’s Equity Vesting

What Happens After The Investment? On The Same Side Of The Table

Contact Info Mark Davis DFJ Gotham Ventures (212) 279-3980 Blog: markpeterdavis.com twitter.com/markpeterdavis

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