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July, 2015
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Getting Investor Ready Mark MacLeod, Founder, SurePath Capital Partners Inc. @startupcfo July 28, 2015
SurePath Capital Partners Inc.
Introducing SurePath The premier strategic advisor to today’s emerging technology leaders
Funding, growing and exiting venture-backed startups since 1999
Raised over $100M in VC in the US,
Canada and Asia ◆
3 years as a VC (Real Ventures)
Worked corporate development and
exited many companies
◆ Airbnb
Blackberry Rackable Systems
Return Path & others
14 years as CFO for some of Canada’s leading technology
companies ◆
FreshBooks Shopify Tungle
& many others
SurePath Capital Partners Inc.
EXPERIEN
CE(
SurePath ExperienceWorking with leaders in the Canadian technology market
SurePath Capital Partners Inc.
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Getting Ready :
SurePath Capital Partners Inc.
4 phases
Plan
Prepare
Pitch
Party!
SurePath Capital Partners Inc.
1. Plan
BootstrapAngel
yes (seed) VC
Stop!
noReady?
no
yes Prep Roadshow
SurePath Capital Partners Inc.
Investor Readiness...
YOU KNOW:
How much?
Who from? (angel vs. VC)
Why? (what for? Milestones?)
YOU HAVE:
Docs: Exec Summary, Pitch Deck, Basic Financials
Deal team
Pipeline
SurePath Capital Partners Inc.
Angel vs. VC...
Opportunity Size < $20M $ 100M
Capital needs2 rounds
maxAs much as it takes
Finance Strategy
Get to Cashflow Positive
Invest in growth
Angel VCMicro / Seed VCs ???
SurePath Capital Partners Inc.
2. Prepare
Document Checklist:
Executive Summary
Pitch Deck
Financial Model
Bonus:
Roadmap
Competitive landscape
Team Bios & hiring plan
SurePath Capital Partners Inc.
Exec Summ
1 - 2 pages max
Sales document
One purpose -
get a meeting!
http://www.docstoc.com/docs/120015412/Executive-Summary
SurePath Capital Partners Inc.
Pitch Deck
Ten Buckets Model
10 - 15 slides
Sell, don’t explain
How I evaluate pitches...
Clear personalized problem statement
Evidence of domain expertise
Known target customer with $
Can touch and feel the product
Clear ask
http://www.startupcfo.ca/2011/04/the-vc-presentation-grader/
SurePath Capital Partners Inc.
Financials
Baseline:
Expense Plan (hires, customer acquisition, overhead)
Months’ runway
Better:
2 year model with key assumptions (monthly yr 1, quarterly yr 2)
Unit economics and drivers
Sensitivity Analysis
Examples: http://foresight.is/
SurePath Capital Partners Inc.
Final Preparations
Deal Team
Lawyer
Advisors / Mentors
Pipeline
Qualified list of investors that “fit”
Path to get intros
SurePath Capital Partners Inc.
3. Pitch!Tips
✓ Be prepared - all docs & deal team ready
✓ Roadshow - parallel, not serial
✓ Running start - build relationships *before* pitching
✓ Start early enough (3 - 6 months)
✓ Target the right investors
✓ At the right time
✓ Build trust
✓ All about traction… (The three “T”s)
SurePath Capital Partners Inc.
Pitch Do’s and Don’ts
DO!
✓ Talk about yourself - we invest in people!
✓ Summarize - make it easy & memorable
✓ Be different / yourself!
✓ Tell a story
✓ Impress
✓ Commit - full time effort!
SurePath Capital Partners Inc.
Pitch Do’s and Don’ts
DON’T!
★ Disagree with yourselves
★ Make me read
★ Read your own slides
★ Target everyone - 1% of a B users...
★ Be alone - no competition = no market
★ Avoid phone if possible
★ No agents / intermediaries
SurePath Capital Partners Inc.
The Three Ts of Funding
Round Team Tech Traction
Seed
A
B
Nothing closes rounds faster than traction
SurePath Capital Partners Inc.
Angel List
http://angel.co/
Great for finishing a round, not starting
Go there when
- you have a lead
- 2/3 of round committed
- traction (aka Social Proof)
SurePath Capital Partners Inc.
Evaluating Investors...What do I want from this relationship?
Have they walked the talk? What is their track record?
Do they have deep pockets? Will they support me for future funding?
Can they put together high quality investor syndicates?
Can they help in building my organization?
Can they improve my company’s profile and bring in high standards of governance?
Is the valuation fair for both sides?
And, ABOVE ALL: Is there mutual respect and can the VC be my sounding board?
SurePath Capital Partners Inc.
Common roadblocksNobody wants to lead
Roll your own term sheet
Convertible note
Pitching a note to investors that prefer equity
Secure the $, then optimize the deal
Investors are dragging their feet
Plan a catalyzing event (launch, key hire, event, etc)
Build traction
Concerns over milestones
Raise more or spend less
SurePath Capital Partners Inc.
Questions?
Web: http://www.surepathcapital.com/
Blog: http://www.startupcfo.ca/
Social: https://twitter.com/startupcfo
SurePath Capital Partners Inc.