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Startup Workshop

Startup Workshop. Presentation to. Agenda. Secrets of Getting Funding (Top 7 steps) The 4M’s of the Executive Summary. “Best Time To Be A VC & An Entrepreneur!”. 5,000 + Venture Capital Providers Private Management Firms Corporate Venture Groups Financial Institutions Venture Groups

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Startup Workshop

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  1. Startup Workshop Presentation to Vcapital Confidential

  2. Agenda • Secrets of Getting Funding (Top 7 steps) • The 4M’s of the Executive Summary Vcapital Confidential

  3. “Best Time To Be A VC & An Entrepreneur!” • 5,000 + Venture Capital Providers • Private Management Firms • Corporate Venture Groups • Financial Institutions Venture Groups • Family Funds • Capital Managed, Raised and Invested has skyrocketed • Venture Wire tells it all..millions daily Vcapital Confidential

  4. Secrets of Getting Financed Steps 1 – 7 “The Essentials” Vcapital Confidential

  5. Secrets of Getting Financed 1 “Venture firms invest in the Jockey – not the horse” Vcapital Confidential

  6. Secrets of Getting Financed 2 Don’t be paranoid Vcapital Confidential

  7. Secrets of Getting Financed 3 Less is more Vcapital Confidential

  8. Secrets of Getting Financed 4 Acknowledge your Enemies Vcapital Confidential

  9. Secrets of Getting Financed 5 Look for Value, not Valuation Vcapital Confidential

  10. Secrets of Getting Financed 6 Due diligence is not something only the venture firms do Vcapital Confidential

  11. Secrets of Getting Financed 7 Listen to the experts Vcapital Confidential

  12. The 4 “M”s – What VCs really want to see • Management (Founders, Senior Managers, Directors & Investors) • Magic (Products/Services, Competitive Advantages, Operational Plan) • Market (Large Markets, Target Customers, Marketing/Sales Plan) • Money (Business Model, Financials, “The Deal”, “The Exit”) Vcapital Confidential

  13. Vcapital Confidential

  14. Venture Capital Has Changed The World Vcapital Confidential

  15. Vcapital Confidential

  16. VCapital Key Customers • High quality Entrepreneurs • All rounds of financing, across all industries and all geographies • Venture Capitalists, corporate investors and organized groups of angel investors • Invest in variety of stages, industries and geographies • Must have deal funding history • Best of Breed Professional Service Providers • History serving the entrepreneurial market • Quality reputation in discipline of services provided Vcapital Confidential

  17. Value Proposition - Entrepreneurs • Decrease front end of capital raising process from an average of 4-6 months to 4-6 weeks. • Increases chances of getting funded (currently by 8 times over the industry average) by providing expert advice, personalized service and targeted referrals to pre-qualified network of investors. • Ensures entrepreneurs maintain control over who sees their opportunity. Vcapital Confidential

  18. The “Right Touch” Approach • Not a listing service • Deals are screened at various points • Entrepreneur is in control • Deals are referred based on investment preferences • Not a hands-off approach • Full services available • Not only a tech company • Venture and finance professionals leveraging cutting edge Internet and communications technology Vcapital Confidential

  19. Vcapital Confidential

  20. Valuation • How much to raise? • What percent of Company to give up? = Depends on the value (valuation) of the company Vcapital Confidential

  21. Elements affecting Valuation • Total Growth Opportunity • A company that can reach $5 billion in revenue should command a higher valuation than a similar opportunity that can reach $500 million • Risk Profile • The higher the risk, the lower the valuation • Technology Risk • Completeness of Management team • Number of Competitors • Investment Stage (consider in isolation) • The earlier the stage, the lower the valuation • As you grow, you decrease the risk, and increase valuation Vcapital Confidential

  22. How do I value my Company? • Valuation is… is the present value of all future cash flows discounted back at the required rate of return, usually called a discounted cash flow analysis = valuation methodology is technically CORRECT = USELESS in raising your first couple of rounds of venture capital = There is NO CORRECT answer Vcapital Confidential

  23. How do I value my Company? • Comparing your business to a comparable business with similar elements can give you insight into your valuation. • Find companies with similar growth opportunities, risk profiles, and investment stage. • Talk to professional service providers such as lawyers and accountants who have assisted entrepreneurs in raising venture capital. • Talk to entrepreneurs in venture-backed companies. Vcapital Confidential

  24. Valuation – VC Methodology • Venture capitalists are concerned with getting above average returns to compensate them for the risk they are willing to take • Seed and early stage investors expect a return of 10 X original investment • later stage investors target 3 to 5 X original investment • Venture capitalists focus on pre-money valuations, or the valuation of the company prior to a new round of venture funding. • This allows for better comparability across companies without regard for the amount of capital being raised. Vcapital Confidential

  25. Choose Value over Valuation Vcapital Confidential

  26. Vcapital Confidential

  27. Sources of Capital • Angels • Friends, Family and Fools • Sophisticated Angel Investors • Family Venture Funds • Private Management Firms • Financial Institution Venture Funds • Corporate Venture Funds Vcapital Confidential

  28. Seed Stage (Pre-Venture) Financing • Company Development: Up to 1 year • Capital Range: Up to $1M • Primary Sources: FF&F, Angels, Seed-Stage VC Firms Vcapital Confidential

  29. Early Stage Financing • Company Development: 1-3 Years • Capital Range: $1Million - $5 Million (1-2 Rounds) • Primary Sources: Private Management Firms, Corporations Vcapital Confidential

  30. Expansion Stage Financing • Company Development: 3-5 Years • Capital Range: $5 Million - $20 million (1-2 Rounds) • Primary Sources: Private Management Firms, Financial Institutions, Corporations Vcapital Confidential

  31. Mezzanine Stage Financing • Company Stage: 12-18 Months Prior to IPO • Capital Range: $3 - 10 Million • Primary Sources: Private Management Firms, Financial Institutions, Corporations Vcapital Confidential

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