Blow Up or BLOW UP!

General

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How To Raise A Venture Capital Round?

Basic Steps / Outline

Section begins at 8m25s.

1. Determine if the business you're working on is, in fact, a startup!
2. Decide how much of your company you're willing to sell in this round, vis a vis the amount of money you need to raise. This will give some rough numbers around target valuation.
3. Prepare some flavor of presentation, whether it's just a naked demo of the product or a pitch deck (usually followed up by a demo)
4. Identify investors who are a fit for your company (based on stage, industry, strategy, etc) and categorize them by the quality of fit: good fit, better fit, best fit.
5. Reach out to and pitch Good Fit investors first, to get practice and iterate on your pitch. Then move on to Better Fit and Best Fit investors.
6. As interest builds in the round, determine who you want in your round and how much room you want to allocate for them.
7. Review incoming term sheets with relevant legal counsel, co-founders, board members, and/or advisors.
8. Select offers based on the best terms (and/or value added).
9. Send wiring details. Issue shares/notes. Update your cap table.
10. Get back to work building the future!

Jason's Questions for Graham

(Might not get to all of 'em but here's what I had in mind... I've got thoughts/explanations for most of these but I thought here's your time to shine!)

• What are some of the "right" reasons for a company to raise a venture capital round? Any "wrong" reasons?
  • Jason starts: 28:00
  • Graham starts: 28:18
• At different stages (Seed, Early, Late) what are some of the traits companies should look for in an investor?
  • Jason starts: 33:59
  • Graham starts: 35:06
• Understanding that every investor is different, what are some general rules of thumb entrepreneurs should keep in mind when reaching out to investors to pitch?
  • Jason starts: 45:21
  • Graham starts: 46:18
• Should startups pitch to VCs who have invested in their competitors?
  • Jason starts: 54:01
  • Graham starts: 54:43

Bonus questions:

• Should startups always seek a new investor to lead a round, or are there benefits to raising an "inside round"? What are those benefits, if any?
  • Graham starts: 1:00:15
• Can we talk a bit about general solicitation?
  • Jason starts: 1:05:10
  • Graham starts: 1:07:48

About The Co-Hosts

• Jason D. Rowley is a researcher who has previously worked with Uzabase, Golden.com, Crunchbase News and others. He volunteers with startup outreach for the open-source community and sends occasional newsletters from Rowley.Report.
• Graham C. Peck is a Venture Partner with Cultivation Capital and additionally helps companies build technology development teams in partnership with Brightgrove and other technology development organizations.