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[FOUNDERS WEEKEND 2015] ToutApp >> Tawheed Kader, "Fundraising as a Sales Process (Crushing the Series A)"

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[FOUNDERS WEEKEND 2015] ToutApp >> Tawheed Kader, "Fundraising as a Sales Process (Crushing the Series A)"

  1. FUNDRAISING AS A SALES PROCESS @tawheed 1
  2. ABOUT ME • Founder at ToutApp, we build software to empower sales people • Raised Advisory, Seed, and Venture Capital • Fell in love with the art of selling @tawheed 2
  3. GOAL Share what I’ve learned about Fundraising so that you can go from being a seed-level company to a solid venture backed company. @tawheed 3
  4. KEY CONCEPTS 1. Why you should think about fundraising as a sales process 2. What to do before you fundraise 3. How to actually run your fundraising like a sales process @tawheed 4
  5. HOW YOU THINK ABOUT FUNDRAISING @tawheed 5 “We’re getting ready to raise our Series A. We’ve got great traction. Revenues are growing. Our customers love us. We’re looking to raise $3m to $5m.”
  6. HOW INVESTORS THINK ABOUT YOU @tawheed 6 • As a VC, I can only fill X board seats • With my $Y fund, each deal I make needs to have a likelihood of returning > $Y • There are only about 15 to 20 seriously important companies every year • Should I buy what you’re selling?
  7. WHAT’RE YOU SELLING? @tawheed 7 25% 25%25% 25% Founders Series A Series B Pool
  8. #1 RULE OF SELLING Why You? Why Now? @tawheed 8
  9. PRINCIPLES OF SELLING 1. Who is the right buyer for what you’re selling? 2. Understand your buyer, what do they care about? 3. Why should they choose you? What makes you unique? 4. How do you articulate and pitch them on Why You? Why Now? @tawheed 9
  10. HOW YOU THINK THOUGHT ABOUT FUNDRAISING @tawheed 10 “We’re getting ready to raise our Series A. We’ve got great traction. Revenues are growing. Our customers love us. We’re looking to raise $3m $5m.”
  11. A CLEARERWAY TO PITCH YOUR DEAL @tawheed 11 “We believe X is going to happen. Our seed round allowed us to prove Y. We think with another $Z in the bank we’ll be able to tackle this problem and get to the next stage. And when we do that, we’re going to make a lot of money in a market that is worth $AA.”
  12. IT TAKES MONTHS TO PREPARE IT SHOULD TAKE WEEKS TO DO A DEAL Identify Potential Buyers Build Relationships & Understand Develop Pitch Fundraise @tawheed 12 You are NOT Raising You ARE Raising (months) (weeks)
  13. PREP #1 – HAVE A PLAN 1. How much runway do you have? @tawheed 13
  14. PREP #1 – HAVE A PLAN 1. How much runway do you have? 2. Plan to kick off fundraising when you have 6 months of runway left 3. Based on your financial model, figure out how much money you actually need to raise @tawheed 14
  15. PREP #2 – IDENTIFY POTENTIAL BUYERS 1. There are hundreds of VC firms 2. There are more ways to raise money than just VC 3. There are VCs and Investors that care about stage, category, business model, and even about the type of founder you are 4. Don’t just aim for Sequoia to write you a $20m check @tawheed 15
  16. PREP #2B – RESEARCH BUYERS 1. Identify your ideal buyer by doing your research on the firms 2. Crunchbase, LinkedIn, TheFunded and funding announcements 3. Don’t just look at firms, focus on actual partners; you’re getting married @tawheed 16
  17. OUR SERIES A WITH SIGMA WEST @tawheed 17
  18. PREP #2B – RESEARCH BUYERS 1. Find investors that have invested in your broader space and category in the past; ideally with successful exits 2. For clues, look at the types of investors that have placed bets on your competitors 3. Look at their fund size. There are lots of cues to pick up here @tawheed 18
  19. PREP #4 – BUILD RELATIONSHIPS 1. You’re not raising 2. You’re mapping out the people you want to target 3. You’re figuring out how to get introductions 4. You’re looking to build a longer term relationship 5. You’re looking to get advice 6. You’re asking a lot of questions 7. There is no deck 8. BTW. You’re not raising @tawheed 19
  20. PREP #4A – RELATIONSHIP HACK 1. Talk to Portfolio company CEOs 2. Ask them the type of investors they are, ask them how they add value, ask them for advice 3. SELL them. The more portfolio companies you have as customers the easier it’ll be for you to sell down the line @tawheed 20
  21. PREP #5 – DEVELOP YOUR PITCH DECK 1. Don’t leave this for the last minute or for “after” you get your meetings 2. Treat this with respect. It requires you to have a very deep understanding of your business, your numbers 3. A huge part of this is for you to develop your unique vision for what you want out of your company @tawheed 21
  22. PREP #6 – DEVELOP YOUR SUPPORT STRUCTURE 1. Have strong customer references you can call upon at a moment’s notice 2. Have one spreadsheet with tabs outlining the core metrics around your business 3. Have a clean set of financials 4. Have a shared Dropbox folder ready to go with everything @tawheed 22
  23. GET READY You’re going to meet some of the smartest and most successful people on Planet Earth. Enjoy it. @tawheed 23
  24. THE SALES PROCESS Initial Pitch Deeper Pitch Partner Meeting Initial Due Diligence Term Sheet Due Diligence Close @tawheed 24 2 to 8 Weeks 4 Weeks MAX
  25. MUST DON’TS OF THE PROCESS 1. Don’t spent too much time with Associates or Principles 2. Don’t spend too much time if you haven’t gotten to meeting with the partnership after the 2nd or 3rd meeting 3. Don’t be shy. You’re raising. OWN IT 4. Don’t do your favorite firm first. First 6 pitches are for practice @tawheed 25
  26. PREPARE FOR BATTLE 1. You need to maintain your positivity, you need to be assertive, you need to drive forward with conviction 2. You need to make the entire process dead simple easy for the investor to say “Yes” 3. You need to consistently be asking the tough question, are you interested in “buying”? What are next steps? @tawheed 26
  27. CONSIDER THE STATS 1. 0.5% of people attempting to raise money end up raising 2. 20% of startup founders who raise end up with something that is worth something 3. 0.1% chance you’ll make money from your venture after you raise @tawheed 27
  28. BE THE UNICORN 1. Solo Founder 2. No Prior CEO Experience 3. No Network @tawheed 28
  29. HAVEA PLAN B SO YOU FEEL CONFIDENT 1. What part of your business can you re-focus to start generating cash? 2. How can you cut expenses? Reduce burn? Extend runway? 1. Are there alternative exit scenarios? 2. Take a long hard look. Is it time to move to the next idea? @tawheed 29
  30. IF YOU DO RAISE 1. Pause and Reflect 2. Think carefully about what you’re going to do with the money 1. If possible, create a rough pitch deck for your next fundraising 2. Buckle up @tawheed 30
  31. TRUST IN THE PROCESS Identify Potential Buyers Build Relationships & Understand Develop Pitch Fundraise @tawheed 31 You WILL Raise
  32. ABOUT ME • Twitter: @tawheed • I blog, a lot: tawheedkader.com • Email: tawheed@gmail.com @tawheed 32

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