raising capital for your startup - lean entrepreneurship carnegie mellon
DESCRIPTION
Many very successful businesses have been and will be built without raising venture capital. However, for certain high growth businesses one or multiple rounds of growth capital are necessaryTRANSCRIPT
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Raising Capital for Your Startup
Sean Ammirati
Partner, Birchmere Ventures Adjunct Professor, Carnegie Mellon University
#CMULean
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Only a few companies should Raise VC $
(but that is our focus for next 45 minutes)
#CMULean
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When should approach VC re:investing?
Revenue EBITDA
#CMULean
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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
#CMULean
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1 Investment: 100 - 150 Pitches
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!
!
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What makes a great investment?
The Relevant Question ...
#CMULean
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1 Fantastic Team 2 Large Market 3 True Differentiation 4 Market Validation 5 Fit with the Fund
#CMULean
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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
#CMULean
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How do you determine valuation?
• Team, Traction, Stage & Sector
• Exit Expectations (next slide)
#CMULean
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Exit Expectations
At early stage 10x
Success
Return Capital
Write Off
Portfolio 3x (really relative to other VCs same vintage)
#CMULean
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#CMULean
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For Next Week ... !
#CMULean
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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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