2/ No one owes you a round.
First things first. I know we want to change the world, we are innovative, we are working on the bleeding edge, but...
No one owe us a round
An investment is a commercial transaction. It needs to make business sense. Without that, there is no deal
First things first. I know we want to change the world, we are innovative, we are working on the bleeding edge, but...
No one owe us a round
An investment is a commercial transaction. It needs to make business sense. Without that, there is no deal
3/ Venture funding is not for everyone.
Fund managers need exits and liquidity events.
Investors need downside protection.
The right deals are bets on growth, scale, markets, risk, timing, teams. Often before everyone gets what is on offer. Getting the combo right is difficult
Fund managers need exits and liquidity events.
Investors need downside protection.
The right deals are bets on growth, scale, markets, risk, timing, teams. Often before everyone gets what is on offer. Getting the combo right is difficult
4/ Do you have what it takes to be a venture funded founder?
a) The commitment to slog it out for 8-10 years.
b) The ability to listen, admit you are wrong and switch paths when needed.
c) The ability to do the opposite when the world is wrong
d) To get up and start over again
a) The commitment to slog it out for 8-10 years.
b) The ability to listen, admit you are wrong and switch paths when needed.
c) The ability to do the opposite when the world is wrong
d) To get up and start over again
5/ What else is on the checklist? Not a complete list but other filters
e) Founder Maturity
f) Competence and track record
g) Timing, luck and hot hands
h) Market fit and access
i) Traction and credible road map
j) Burnt bridges
k) Incentive alignment
e) Founder Maturity
f) Competence and track record
g) Timing, luck and hot hands
h) Market fit and access
i) Traction and credible road map
j) Burnt bridges
k) Incentive alignment
6/ Unlikely fit?
If you want to run a lifestyle business, if you prefer control over returns, if the idea doesn't lend itself to scale, if the math doesn't work, if you don't like debt, if you already have all the answers and just need someone to write you a check.
If you want to run a lifestyle business, if you prefer control over returns, if the idea doesn't lend itself to scale, if the math doesn't work, if you don't like debt, if you already have all the answers and just need someone to write you a check.
7/ Deals are driven by value and liquidity
Liquidity is a function of buyer interest and timing. Value is a function of idea, teams and execution. Both are driven by perception.
Fair value lies somewhere in between. Rare to get fair value right even for seasoned hands.
Liquidity is a function of buyer interest and timing. Value is a function of idea, teams and execution. Both are driven by perception.
Fair value lies somewhere in between. Rare to get fair value right even for seasoned hands.
8/ You are not going to raise a single round. You are likely to raise 3 to 7.
Understanding this is driven by how many times you have traveled this path before.
Rounds are linked to execution milestones. Seed. Proof of concept. Validation. Growth. Scale. Profitability. Exit
Understanding this is driven by how many times you have traveled this path before.
Rounds are linked to execution milestones. Seed. Proof of concept. Validation. Growth. Scale. Profitability. Exit
9/ Dilution is real.
It's not about share of the cake or slice of the pie. Its about size of the cake.
Scale + exits are hard and require coordinated team effort. Team is not just founders and startups. It's everyone you need to get to the exit. If you don't like sharing...
It's not about share of the cake or slice of the pie. Its about size of the cake.
Scale + exits are hard and require coordinated team effort. Team is not just founders and startups. It's everyone you need to get to the exit. If you don't like sharing...
10/ Equity dressed up as debt?
Yes. Why should an LP investor, invest in a venture fund? Higher returns combined with some downside protection. High risk bets with asymmetric payoffs. Baked in the model.
The terms are expensive because venture fund math is hard to get right.
Yes. Why should an LP investor, invest in a venture fund? Higher returns combined with some downside protection. High risk bets with asymmetric payoffs. Baked in the model.
The terms are expensive because venture fund math is hard to get right.
11/ If its just money you need, you can get cheaper financing elsewhere. Cheaper financing needs compliance and governance. Clean books, audited accounts, track record, history, customers, revenues and owner guarantees.
Debt as well as grants need clean houses. Get that sorted
Debt as well as grants need clean houses. Get that sorted
12/ Venture funding myths for #desi #founders and #startups. A thread.
@jehan_ara
@kayzafar
@MaroofAliSyed
@babushka99
@TalhaIzhar
@Sameerpeace
@norbalm
@jehan_ara
@kayzafar
@MaroofAliSyed
@babushka99
@TalhaIzhar
@Sameerpeace
@norbalm
13/ Summarized from a Valuation Primer for Founders. A short excerpt from Founder Puzzles
