How to raise money. A useful guide to learn the basics about raising money.

1. How to raise money
If you need it.

2. menu
What | Why | When | Who | Where

3. But first…
• You will hear a thousand times “You can
not make it”, “it's boring”, “not enough of X,
Y, Z…”, “there are plenty like you…”
• You will only make it real if you stand by it
• But you need to have touch points to know
if you are on the right track. Investors are
one of those (a very important one).

4. It's Better to have an investor
• It's better to have a 10% of something big
than the 90% of nothing
• Take the money and share the value
• An investor is:
– Money
– A vote of confidence
– A link to another network of investors
– A person who will help you and give you a
new point of view

5. Amazon
• Bezos: “… I needed to raise $1 million,
and I ended up giving away 20 percent
of the company.”
• “I raised it from 22 people at approximately
$50,000 a person. That was 1995, and the
first question every investor asked me
was: ‘What’s the Internet?’”
• Now that 20% = $35 billion
• Todays Bezos stake =

6. What investors want

7. What investors want
• An investor is as good as their exits.
• What “exit” means.
– Founders buy back the shares
– Another investor buys their shares
– Company A is bought by company B at a profit
– Company goes public
– …
• This exit plan should be done in a time
frame of 3-5 years.

8. Create value
• Create value = Disrupt a market
• In a reasonable time frame
• An investor does not invest in a
business to obtain a 5%, they invest in
people who can create value

9. A business and a entrepreneur
It's not the same

10. I want to create a new SAP
• Do I need an investor?
• No.
• Why?
• Because there is little chance to enter the
market and there is little chance to
succeed making something “like SAP”.
You can do something like SAP inside a
big company.

11. I want to make cupcakes…
• Do I need an investor?
• No.
• Why?
• Because unless you present a breaking
model for the sector, you are just a
business. You are not an entrepreneur.

12. I have a recipe to make sweet beer
• Do I need an investor?
• Yes.
• Why?
• Because if everything goes well you can
break the market by introducing a new
category that doesn’t exist right now and
you can become an acquisition target.

13. I have a sensor that can prevent
obesity
• Do I need an investor?
• Yes.
• Why?
• You will need resources to make it
happen. You have a good chance for
failing but if you succeed you will make
history.

14. If you want to work with investors
THINK BIG

15. Why you need to think big?
• An investor will go through hundreds of
ideas, business plans, projects in a year
• You can be project number 86 or
something else
• You also need to offer a clear path to the
exit
• At the end we will see how to present to an investor

16. Why do you need the money

17. why
• You need the money to eat
• You need money to pay the rent
• I need to buy a computer
If that's your case, you need a job. First find
a job, then try to start your company.
Investors don't pay to make ends meet.

18. why
• I have the best idea in the world but I need
a team to build it.
You don't need money. You need to
convince your team to make a prototype.

19. why
• I have a prototype, we have done some
testing and it's working. We need to launch
an advertising campaign and hire some
sales people.
If that's the case investors don't want you.
Sales people go by incentives. If you have
a product “easy to sell” you don't need an
investor.

20. why
• We are doing well in Spain but we need
some money to make our infrastructure
more reliable and be able to expand to
other countries. We will double our
business by opening in Mexico in the next
year.
Then you may have a good chance to have
an investor.

21. why
• We are doing well in Spain (KPIs) but we
need some money to make our
infrastructure more reliable and be able to
expand to other countries. We will double
our business (a number) by opening in
Mexico in the next year (a time frame).
Then you may have a good chance to have
an investor.

22. When you need to ask for money

23. when

24. when
They don't trust you
You need them
You don´t
need them

25. when
• Before raising money
– Work in a company for a while. Learn a little
about how work is done
– On your own… do some projects for
others – consultancy, development. Learn
things like deadline, compromise, results…
– Finally, start your own thing. Probably you
will fail in the first two or three attempts.
• So don't rush for money.

26. Who is going to give you money

27. who
• Fools (Friends and family)
• Angel investor
• Professional investor - VCs
• Banks

28. fools
• You can raise the first 5.000 / 10.000
• No conditions, no contracts
• They want to help
• Tell them how much are they getting from
the company (normally 10%)

29. Angels
• You can raise 25.000 / 50.000 from each
one
• They will need contracts and some
conditions
• KPIs are softer and easier to achieve
• Timing normally is generous

30. Profesionals - VCs
• From 100.000 to 500.000…
• The need KPIS
• You will have a contract and conditions
• You need to deliver results every quarter

31. Your numbers
• Having your numbers in good shape and
in clean sheets is always good
• If you can not measure, you can not grow
• The basics KPIs
– Overall cost of your operations per month
– Overall income per month
– Profits (if any)

32. KPIs
• Key Performance Indicator
• You need to have a few indicators that will
allow you to explain your business
• Traditional KPIs are sales, users,
visitors… but you can use more specific
indicators to add value to your business

33. KPIS = Traction
• It´s your product working (usable – can
you make a demo?)
• Are there any real user using your
product?
• Do you have a customer? Two? Three?
Traction means there is a pattern you can
understand and scale

34. Where are they?
• Fools = You know
them :)
• Angels = Go to
expo and demo
days, once you are
confident in your
product and team.
• VCs = Angels will
lead you to VCs.

35. Where are they?
• Present your idea and product to
everyone you can. From small to big
ones. Don't burn your opportunities. Go
slowly from bottom to top. If you are doing
things right, you will reach them and
they will find you.

36. How to present to a Investor
10 slides
• Company purpose
• Problem
• Solution
• Why now
• Market size
• Competition
• Product
• Business model
• Team
• Financials. The
deal

37. Finally
• This is not a war. If everything goes well,
everyone wins.
• You need a team to make an enterprise
happen.
• Put all the talent you can find on board.
• Good investors are part of your team.

38. Thank you
• Go to feebbo.com
• More about me: cm@feebbo.com