1.
How to
Successfully Fund
Your Startup
#alternativefunding

2.
About Your Hosts
2
R. Branden Harper
Director
Sirk Roh
Chief Operating Officer

3.
Agenda
• Fundraising game plan
• Fundraising decision points – it’s about more than just the
money!
• Fundraising profile
• Funding paths
• Funding options at different stages of the development
process
• Equity vs debt considerations
• Preparing your company for investment capital

4.
Fundraising Game Plan
• How much money do you need to raise?
• What’s that money going to be used for?
• At what cost and with what terms and conditions?
• What type of capital is the best fit for your company,
and why?
• Where do you find the type of financing you need?
• Milestone financing

5.
Fundraising Decision Points
• Equity Valuation? What % is worth taking on investment?
• Control Are you the driver? Who makes key decisions?
• Value-add More than just money?
• Risk Tolerance Personal assets?
• Timeframe How long will raising funds take?
• Horizon Exit strategy? Build to exit? Build and hold?
• Culture Is there alignment?

6.
Your Company’s Fundraising Profile
Stage, Traction & Capital Requirement
What is the current company stage? Rate of growth?
How big is your addressable market? Higher/lower than $1B?
Ready for scale?
o Product-Market fit?
o Revenue / pricing model?
o What does your sales pipeline look like? How long are sales cycle?
o How much capital do you need to get to the next stage?
Team
Well-rounded and committed team able to handle increased
complexities? Need for key hires?

7.
Funding Paths Around Milestones

8.
Ideation ($0M)
Bootstrap / Self Credit Family & Friends

9.
Launch and Traction ($0-1M)
• Operating: customer and vendor terms
• Crowdfunding
• Incubators
• Revenue-based financing
• Angels

10.
Growth and Scale ($1-5M)
• Operating:
customer and
vendor terms
• Crowdfunding
• Revenue-based
financing
• Angels
+
• Strategic
investors
• Banks

11.
Breakout and Beyond ($5M+++)

12.
Equity / Debt Considerations
Bank / Debt
Revenue-Based
Finance
Venture
Capital
Guarantees &
Controls
Financial Covenants
Sometimes Personal
Guarantees
No Financial Covenants
No Personal Guarantees
Partner in the Business
(Board Seat, Voting
Rights)
Added Value Low / None Medium High
Dilution None / Low None High
Payment
Flexibility
Low:
Fixed Payments
Medium:
Variable Payments
High:
No Payments
Speed 4-8 months 4 weeks
Highly variable. Typical
3-6 months focused
effort

13.
Revenue-Based Financing
Up to $1M or 33% of annualized revenue run rate
› No set interest rate
› Matures in 5 years or when cumulative payments equal a set amount,
usually 1.5 – 2.5x principal
› Monthly payments are a fixed percent of revenue, 2-8% range
› Small cash upside participation
Example Loan
› Annual Revenues: $1M
› Principal: $200K
› Maturity: 5 years
› Payment: 5% of monthly revenue
› Repayment: 1.75x principal [$350K]
› Upside Participation: $50K at liquidity event
CumulativePayments
Principal
Loan Maturity
1.5x
to
2.5x
Principal

14.
Fundraising Prep
Know Your Numbers
• Historical/Projections
• Ability to defend your assumptions: growth, capital
requirements
• Pivots, capitalization, customers
Document Your Company
• One-page/Executive Summary/Deck/Product Demo
Activate Your Network
Legal + Accounting
Customer, Vendor, Partner References
Keep Momentum
• Follow up, set target dates to funding, sense of urgency

15.
Q&A and Thank You!
15
R. Brandon Harper
www.lightercapital.com
@lightercapital
Sirk Roh
www.earlygrowthfinancialservices.com
contact@earlygrowthfinancialservices.com
415.234.3437
@EarlyGrowthFS