1. Inside
Guide
to
VC
Funding
Peter
Jones
General
Partner
But
a
techie
really!
CompSci,
Cambridge;
UNIX/C
Programmer;
wrote
an
RDBMS
from
scratch!
(Why?);
Founder/CTO
of
Metrica;
CTO
of
SignalSoO;
Strategy
Director
of
AcQx;
plus
others
that
didn’t
work
so
well!

2. You
have
an
advantage
–
VCs
generally
like
techies!

3. Be
brutally
honest
with
yourself
–
is
this
really
a
big
opportunity?
Is
it
a
global
market?
Is
the
potenQal
market
size
measured
in
$1bns?
Is
it
growing
rapidly?
Inside
Track
VC
Blockbuster
Economics...
£90m
fund
with
goal
of
4x;
Return
of
£360m;
25
companies
–
85%
fail
or
low
return,
15%
succeed;
Bulk
of
return
from
4
companies
25%
on
exit,
so
need
£1.4bn
of
exits;
PotenQal
£360m
exit
per
company
=>
Market
must
be
big!

4. Be
brutally
honest
with
yourself
–
do
you
have
the
ambiQon
and
is
this
the
right
Qme
for
you
to
do
a
startup?
Is
your
goal
to
create
a
big
business
and
serious
personal
wealth?
You
can’t
create
a
lifestyle
business
with
VC
money
There
are
a
lot
easier
ways
to
make
a
£1m!
Even
with
the
best
product,
huge
market,
compelling
business
case,
it’s
a
massive
task...
...
But
can
be
incredibly
intellectually,
emoQonally
and
financially
rewarding.

5. Be
brutally
honest
with
yourself
–
stress
test
your
idea
really
hard
Can
you
express
the
core
of
the
proposiQon
simply
and
concisely?
Is
it
solving
a
real
problem
where
there
is
real
pain?
Is
it
a
must-­‐have
or
just
discreQonary
for
your
users?
Are
you
really
solving
the
problem
and
adding
value?

6. StaQsQcally
the
chances
of
raising
VC
money
are
low...
Inside
Track
Typical
Deal
Flow
Metrics
In
the
current
climate
it
is
probably
harder!
700
Plans/Decks
100+
MeeQngs
You
should
assume
that
it
will
probably
take
six
months
to
a
year
(or
longer)
10
Serious
4
Deals
But
you
can
improve
your
odds
by
working
smart
...

7. Improving
the
odds
–
start
building
the
team
The
best
thing
you
can
do
is
build
a
kick-­‐ass
team
around
you
Ideally
a
balance
of
skills
–
technical,
markeQng,
bizdev
Ideally
a
team
of
peers
–
with
equally
aligned
moQvaQons
Prior
success
(i.e.
Making
money
for
investors
or
yourself!)
in
a
startup
probably
gets
you
through
the
first
filter
in
one
go!
Inside
Track
Bet
on
the
horse
or
the
jockey?
Almost
all
VCs
would
choose
the
jockey
–
despite
Harvard
research!

8. Improving
the
odds
–
genng
the
first
meeQng
DON’T
PRESS
THIS!
(cat
>/dev/null)
SHOTGUN
IS
WEAPON
OF
LAST
RESORT
Inside
Track
-­‐
Meet
porqolio
companies
VCs
depend
on
their
networks
-­‐
Go
to
events
like
this
A
warm
introducQon
from
a
trusted
contact
will
probably
get
you
a
meeQng.
-­‐
Find
Angel
investors
“If
X
can’t
find
one
person
in
my
network
and
-­‐
Consider
an
advisor
convince
them
why
would
I
see
them...”

9. Improving
the
odds
–
qualify
the
VC
Always
ask,
“Am
I
wasWng
my
Wme?”
1. Do
they
have
any
money?!
2. Do
they
invest
in
my
stage
of
company?
3. Do
they
have
a
specific
interest
in
my
sector?
4. Have
they
invested
in
Source:
Ben
Holmes,
Index,
Slideshare.net
compeQQve
businesses?
5. Can
I
get
to
the
right
person?
Inside
Track
Roles
inside
a
typical
VC
–
who
you
have
to
convince
Associates
–
act
as
gatekeepers,
source
and
qualify
deals
Partners
–
champion
the
deal,
make
the
investment
case,
manage
the
investment
subsequently,
you
need
to
like
him/her
Investment
CommiZee/Partnership
–
formally
agree
the
investment

10. Improving
the
odds
–
developing
the
pitch/
deck
-­‐ You
don’t
need
a
200
page
business
plan
-­‐ A
slide
deck
plus
demo/
video
is
ideal
-­‐ Keep
it
simple
and
concise
-­‐ Goal
of
meeQng
#1
is
to
get
meeQng
#2
Source:
Dave
McClure
“How
to
pitch
a
VC”,
Slideshare.net

11. Secret
sauce
–
the
importance
of
technology
• Technology
is
one
of
the
key
vectors
of
disrupQve
innovaQon
• Today
comes
in
lots
of
shapes
and
sizes
– Scalability
of
a
social
media
or
web
service
– UX
of
a
mobile
app
– Deep
tech
of
a
semanQc
search
applicaQon
• Pproprietary
is
good!
– At
least
for
the
secret
sauce
– Standards,
open
source
for
everything
else
• VCs
like
technology
because
of
the
defensibility
from
compeQQon
it
brings
– Its
also
something
to
sell
if
things
don’t
go
too
well!

12. Making
progress
on
the
business
–
execuQon
is
everything!
“A
good
idea
is
just
a
mulQplier
on
the
value
of
good
execuQon”
-­‐ The
importance
of
numbers
-­‐ Define
key
metrics
(traffic,
retenQon,
conversion)
-­‐ Track
and
show
progress
Idea
ExecuWon
-­‐ The
importance
of
evidence
-­‐ Find
evidence
for
your
market
Poor
=
-­‐1
Poor
=
$0
size
OK
=
1
OK
=
$1m
-­‐ Find
evidence
of
customers
Good
=
5
Good
=
$10m
desire
to
buy
(ideally
sell
it!)
Great
=
10
Great
=
$100m
-­‐ Validity
of
business
model
-­‐ Develop
proof
points
-­‐ What
do
you
need
to
show
to
get
to
the
next
stage
-­‐ Tie
proof
points
to
funding
and
business
plan

13. So
am
I
wasQng
my
Qme?
-­‐ Recognising
a
“slow
no”
is
hard!
-­‐ Investors
are
always
“interested”
–
only
valuable
if
they
are
doing
work
-­‐ Don’t
waste
Qme
trying
to
persuade
someone
who
said
“no”
(instead
thank
them
–
see
#1
above)
-­‐ Don’t
take
it
personally!
-­‐ Don’t
drink
your
own
kool
aid!
Constantly
re-­‐assess
your
proposiWon
in
light
of
criWcism
You
can
get
there!
Good
teams
with
good
ideas
and
execuQon
will
get
funded