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Mastering the Art of Fundraising: Strategies for Successful Investor Relationships

Learn the essential elements of a compelling business plan that secures funding. Understand the balance between risk and return, valuation, team dynamics, and market knowledge. Discover how cultivating strong investor relationships and demonstrating traction can exponentially increase your probability of success. This guide covers the fundraising process, pitching tips, crucial financial model components, and insights into the investment landscape. Get ready to impress investors with a standout presentation and increase your chances of joining the 2.5% of successful fundraisers. Remember, passion, integrity, and preparation are key to attracting investment. Don't miss out on valuable resources to help you navigate the competitive funding landscape.

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Mastering the Art of Fundraising: Strategies for Successful Investor Relationships

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  1. You Don’t Get $1M in Funding with a Half-Baked Business Plan!

  2. What deals get funded • Balance between risk & return • Right valuation, team, market • An investor gets it! • Proven track record • Investor can believe in Jockey • Knowledge of the Space • Superior investment to all otheralternatives

  3. It’s about Relationships • Simple Formula: • Strength of Relationship x Traction = Probability of Success • -Paul Allen

  4. It’s about Relationships & Traction… Strength of Relationship 10 8 6 2 3 7 Company Traction 10 8 4 6 10 1 Success Ratio 100 64 24 12 30 7

  5. Fundraising Process • Initial Screening (Intro., EP, ES) • 40% pass rate (100  40) • Meetings with the Entrepreneur • 30% pass rate (40  12) • Due Diligence & Negotiation • 40% pass rate (12  5) • Investment • 50% pass rate (5  2.5) Result 2.5% customers

  6. Risk vs. Return Idea is Feasible Beta/1st Customer Model is defined & proven Risk Expansion $ Valuation Ship $ Best times to raise capital R&D $ Seed $

  7. Not being half-baked “The Big 3” Executive Summary Financial Model PowerPoint Pitch

  8. The PowerPoint Pitch • 12 yr. old rule • Guy Kawasaki’s 10/20/30 rule • Selling Company, not Product (Make sure to have an elevator pitch)

  9. Pitching Tips Strong, but simple opening Market Need (problem) & Business Model (solution) Market Overview Product & Service Overview Competition & Competitive Advantages

  10. Pitching Tips Cont’d • Strategic Partners, Customers • Management Team • Accomplishments/Milestones • Funds Sought/Use of Funds • Financial Projections

  11. Key Consideration • YOU! Be prepared to impress… • Keys to angel investments: • Passion • Integrity • Good Luck!

  12. The TRUTH… • … about business plans: • Entrepreneurs hate writing them & investors hate reading them! • Executive Summary: 2-5 pages (definitely less than 10)

  13. What Should it Include? • Problem/Solution • Market Overview • Product Overview • Traction/Milestones • Mgt. Team/Key Advisors • Financial Details/Deal Terms

  14. The Financial Model • Fully integrated with… • Sales Assumptions • Income Statement (P&L) • Cash Flow Statement • Balance Sheet • Head Count/Salary • Cap. Table

  15. Financial Model: Example Month-to-month projections over the next 3-5 years Includes: Income statement, Balance Sheet, Cash Flow Statement, Sales Assumptions, Cap Table, etc.

  16. Sales Assumptions

  17. Investment Landscape UT • 7 angel groups • Dozen of VCs • 100’s of private angels

  18. Funding • 5.6Mnew start-ups/year • 1.9M seeking funding • Only 50k successful raising capital 97% need help – don’t be a statistic! Source: Center for Venture Research

  19. We’re passionate about helping early stage entrepreneurs prepare for and get access to funding. Brock Blake, CEO bblake@fundinguniverse.com www.fundinguniverse.com

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