A+ info from @lpolovets today on @immad / @BankMercury's webinar on seed stage funding.
In case you missed it, here's a recap:
In case you missed it, here's a recap:
Contents:
- Getting the meeting
- You got a meeting, now what?
- After the pitch
- Seed Valuations
- Exits
- Remote teams
- Portfolio conflicts
- Vison/plan
- Founder flags
- After getting the investment
- Founder compensation
- Pandemic centric ideas
- Prospecting investors
- Getting the meeting
- You got a meeting, now what?
- After the pitch
- Seed Valuations
- Exits
- Remote teams
- Portfolio conflicts
- Vison/plan
- Founder flags
- After getting the investment
- Founder compensation
- Pandemic centric ideas
- Prospecting investors
Getting the meeting:
- Intros from network are important
- Cold outreach works too, but make sure to demonstrate why your company is among the 1-3% worthy of more time
- Avoid superficial personalization
- Intros from network are important
- Cold outreach works too, but make sure to demonstrate why your company is among the 1-3% worthy of more time
- Avoid superficial personalization
You got a meeting, now what?
- Succinct pitches win (1/3 of meeting on the pitch, rest for questions)
- Consider leading with a demo in the pitch. It may come across better over a virtual pitch
- Don't over or under exaggerate
- Send deck before
- Be confident & energetic
- Succinct pitches win (1/3 of meeting on the pitch, rest for questions)
- Consider leading with a demo in the pitch. It may come across better over a virtual pitch
- Don't over or under exaggerate
- Send deck before
- Be confident & energetic
After the pitch:
- Follow-ups are worthwhile but remember not everyone responds
- Check-in after a few days, then after a few more, then write it off and move on
- Follow-ups are worthwhile but remember not everyone responds
- Check-in after a few days, then after a few more, then write it off and move on
On seed valuations:
- Understand that investors pattern match to the other deals they see
- Aim to raise enough for next 18-24 months + ~ 20%
- Avoid giving valuations, set a raise amount, and let the market set the terms
- Understand that investors pattern match to the other deals they see
- Aim to raise enough for next 18-24 months + ~ 20%
- Avoid giving valuations, set a raise amount, and let the market set the terms
On seed valuations (cont'd):
- Work backward from Series A. What will those investors want to see? How much $$ will it take to get there?
- Remember that investors contend with fund sizes. Any investment should be able to return the fund.
- Work backward from Series A. What will those investors want to see? How much $$ will it take to get there?
- Remember that investors contend with fund sizes. Any investment should be able to return the fund.
On exits:
- Exits follow a bell curve: not good, okay, and good.
- Unaligned when founder is leaving a clear path to higher val in 5 years for an exit now
- Otherwise, if founder gave it his/her all an exit is acceptable
- Exits follow a bell curve: not good, okay, and good.
- Unaligned when founder is leaving a clear path to higher val in 5 years for an exit now
- Otherwise, if founder gave it his/her all an exit is acceptable
On remote teams:
- Care less and less about them, but depends on company and product
- It may be hard for investor to get you a VP candidate outside investor's area.
- For int'l teams, the main issue is in investor market knowledge not team location
- Care less and less about them, but depends on company and product
- It may be hard for investor to get you a VP candidate outside investor's area.
- For int'l teams, the main issue is in investor market knowledge not team location
On portfolio conflicts:
- Hard to avoid across the board, but try to, depending on company size
- Check on both sides for comfort level if there would be a conflict
- Hard to avoid across the board, but try to, depending on company size
- Check on both sides for comfort level if there would be a conflict
On vision/plan:
- Important to show 10 yr vision and 2 yr plan
- The goal is to show a clear trajectory to get to the 10 yr vision
- Be realistic though. Ex: Robinhood -> large market, no one liked fees; Superhuman -> smaller market, 1B gmail users not going to all use it
- Important to show 10 yr vision and 2 yr plan
- The goal is to show a clear trajectory to get to the 10 yr vision
- Be realistic though. Ex: Robinhood -> large market, no one liked fees; Superhuman -> smaller market, 1B gmail users not going to all use it
On founder flags:
- Red flags = showstoppers: founder has a bad rep or untrustworthy
- Yellow flags = workable: little industry or leadership experience
- Green flags: founder-market fit, charisma, ability to sell, thoughtful, confident, high grit
- Red flags = showstoppers: founder has a bad rep or untrustworthy
- Yellow flags = workable: little industry or leadership experience
- Green flags: founder-market fit, charisma, ability to sell, thoughtful, confident, high grit
After getting the investment:
- Regular catch up calls with founders (biweekly/monthly)
- Discuss biz performance, problems, make intros, etc.
- Founders should grow headcount slowly and be frugal
- Regular catch up calls with founders (biweekly/monthly)
- Discuss biz performance, problems, make intros, etc.
- Founders should grow headcount slowly and be frugal
On founder compensation:
- Pay yourself at seed stage, cover expenses comfortably (20-100K not bad)
- Series A +, founders should get market salary
- Take money off the table at Series A + not bad, want founder comfortable and incentivized
- Pay yourself at seed stage, cover expenses comfortably (20-100K not bad)
- Series A +, founders should get market salary
- Take money off the table at Series A + not bad, want founder comfortable and incentivized
On pandemic centric ideas:
- Need to assess temporary vs. long-term shifts in consumer behavior
- Focus on barriers to entry
- Ex: Ordering groceries online -> people didn't try, now won't go back. Remote learning -> prob won't last
- Need to assess temporary vs. long-term shifts in consumer behavior
- Focus on barriers to entry
- Ex: Ordering groceries online -> people didn't try, now won't go back. Remote learning -> prob won't last
On prospecting investors:
- Research and personalize
- Framework: Spend 15 minutes on 15 people, see how much you can do, and send emails. Rinse and repeat.
- Research and personalize
- Framework: Spend 15 minutes on 15 people, see how much you can do, and send emails. Rinse and repeat.
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