What You Need To Know About Raising Venture Capital

Who Is DFJ Gotham Ventures?

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

www.dfjgotham.com 2

DANNY SCHULTZ MARK DAVISROSS GOLDSTEIN THATCHER BELL

Who Does DFJ Gotham Invest In?

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What Is The DFJ Network?

23 funds, >$6 billion in capital150 professionals, 600 portfolio companies

Unique access, insight and deal flow

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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

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What Makes A Company Successful?

How you finance your company matters!

TeamTeam IdeaIdea FinanceFinance

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Is VC Right For Your Startup?

Scalability of Business

Capital Required to Achieve Breakeven Cash Flow

HighLow

High

Low

VentureCapital

Build a Giant Co

BootstrapOwn 80% of a Small Co

NotViable

Weak Barriers: Venture Capital

Strong Barriers:Bootstrap

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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

HybridBusiness

Information Business

Technology Business

• Tech-heavy(New Tech)

• Google, Oracle, Microsoft OS, Akamai

•Economies of Scale•Intellectual Property

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Why VC Is Helpful?

Friends & Family Angels Venture

Capitalists

Capital

Advice

Connections

Low High

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Are You Ready For VC?

Great Team

Huge Market

Product in Market

Seed($50K - $1M)

X

Series A(>$1M – 5M)

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What Materials Do You Need?

Get the meetingExecutiveSummary

Create interestPresentation

Explain howFinancial

Model

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What Topics Do You Need To Cover?

ExecutiveSummaryExecutiveSummary

PresentationPresentation

LocationMission

OverviewAddressable Market

Competitive LandscapeBarriers

AchievementsFinancials

Capital RaisedObjectives

Management Bios

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What Topics Do You Need To Cover?

LocationMission

OverviewAddressable Market

Competitive LandscapeBarriers

AchievementsFinancials

Capital RaisedObjectives

Management Bios

Be sure to include these

Not market size

State why you’re better

May be more than you think

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How Do You Get The Meeting?

Mutual ContactMutual Contact

LinkedInLinkedIn

Cold EmailCold Email

SpamSpam

Most Effective

Least Effective

DirectIntroduction

DirectIntroduction

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What Is The Objective Of The First Meeting?

To get the second meeting.

What is the objectiveof the first meeting?

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How Can You Guide The Meeting?

Product?Product?

Market?Market?

Competition?Competition?

Team?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

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How Can You Maintain Momentum?

Industry NewsIndustry News

MilestonesMilestones

Internal MaterialsInternal Materials

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How Do You Know You’re Close To A Term Sheet?

Can you come meet the rest of

my partners?

Can you come meet the rest of

my partners?

How do you feel about these

terms?

How do you feel about these

terms?

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What Should You Expect In A Term Sheet?

An Exploding OfferExclusivity

30 day Due DiligenceParticipating Preferred Stock

Liquidity PreferenceFounder’s Equity Vesting

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What Happens After The Investment?

On The Same Side Of The Table

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Contact Info

Mark DavisDFJ Gotham Ventures

(212) 279-3980

Blog: markpeterdavis.comtwitter.com/markpeterdavis