Startup founders -- this is your chance to get real answers to your real questions. When you're seeking VC funds, it boils down to: What are venture capitalists really looking for -- and how can you show them you've got it? In this presentation, Sean Foote, Founder and Managing Director of Co=Creation=Capital, and Gadiel Morantes, Chief Revenue Officer with Early Growth Financial Services discuss: - What questions VCs will ask - How to impress VCs - Questions you should ask potential investors - What NOT to ask investors Co=Creation=Capital: Entrepreneurs + Money + Management = Co=Creation=Capital - because startups need all the help they can get! EGFS is an outsourced financial services firm that provides accounting, CFO, tax, and valuation services and support to companies at all stages of the development process.

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Ask the VC!
#AskTheVC
Sean Foote
Managing Director
Co=Creation=Capital
Gadiel Morantes
Partner
EGFS

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3. • Who is the buyer and who is the seller?
• Picking a VC
• The VC mindset – how do these weirdos’ brains
work?
• What do VCs look for?
• The VC process – why does it take so long?
• What makes for a great VC meeting?
• Lots of other questions you have…
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What do you want to talk about?
www.CoCreationCapital.com

4. Buyers and Sellers
• A deal is a fundamental disagreement
about value
– Buyers think things are worth less, and
tend to minimize price
– Sellers think things are worth more, and
tend to maximize price
• But, Venture investing is not a zero
sum game
– A long-term relationship, like a marriage
• Pick investors that suit you, know
your space, invest at your stage, etc.
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5. The VC mindset
• VCs are rational
• VC is not “risk capital”
– The idea is to minimize risk and
maximize outcomes of
investments
• VCs particularly care about
your company if it:
– Generates economic value
– Provides good cocktail party
conversation
– Allows them to raise another fund
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6. VCs *need* homeruns
• VCs *need* homeruns
– To return 18% annual net to our investors, we need
30% annual gross return
– 30% gross return is 5x in 5 years for the entire portfolio
• Out of 10 companies
– Half go bankrupt (5 * 0x)
– 4 break even (4 * 1x)
– 1 remainder must be 46x in 5 years
• If it takes 3 years longer, must be over 100x!
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7. What do VCs look for?
• Typical answer: a laundry list of business school type issues:
– Great teams, defensible technology, market traction, large and
growing markets, growth and revenues, limited competition,
blah, blah, blah
• Each investor seems to have a hot button, which changes
over time
• Each company has a hierarchy of risks from largest to
smallest
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8. VC funding is hard…
• Currently, many momentum investors
• And many angel investors
– 20,000+ angel investments in 2014
– 1,200 VC investments
• Implication: VC funding is still wicked hard, so…
– Try to get VCs in seed rounds
– Vet angels on their ability to do follow-on
– Get to break even without VC investment
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9. The VC Process
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10. A great meeting is both an interview
and a first date
• Personal: Be yourself, be
engaging
– How you answer matters as
much as what you answer
• Prep: Be prepared
• Positioning: You are an
equal, not a buyer or a
seller
– Follow the lead
– Ask questions
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11. What you need to provide
• What pain we solve
• How we solve it
• Why we are the right team to solve it
• What we’ve done (so far) and will do (with
your help)
• Why we win vs competitors
• The amount of revenue/profit/scale
winning creates for our mutual benefit
11www.CoCreationCapital.com

12. Thank You and Q&A
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Gadiel Morantes
415-234-3437
contact@earlygrowthfinancialservices.com
www.earlygrowthfinancialservices.com
Follow us @EarlyGrowthFS
Sean Foote
650-255-4134
sean@cocreationcap.com
www.cocreationcapital.com