So you want to raise capital
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Startups require significant funding to build, and raising capital is challenging. Venture capitalists receive thousands of funding pitches each year but only invest in a small fraction. While it may seem that startups can be built cheaply or that a great idea alone will lead to success, the reality is that startups require substantial resources and perseverance to succeed. Building networks of advisors, investors, and communities can help entrepreneurs overcome challenges in funding their ventures.
So you want to raise capital
- 1. So you want capital for your startup or small business, eh? Aghhahahasucka..
- 3. Startups are really hard.
- 5. Startups are soul crushing.
- 6. Startups are life shortening.
- 9. fact: this is not reality.
- 10. funding myths about startups and small businesses 1. Startups cost nothing to build 2. Startups get funded on a napkin 3. A good idea wins every time
- 11. myth #1: startups are cheap to build
- 12. reality: lean or not, it costs money to build something significant. savings do run out.
- 13. stuff that cost MONEY as if you didnt know this Hiring amazing people and you need A level amazing people in startups (they like to be paid even if they believe in you) Infrastructure yes. Its cheaper than it was, but those EC2 bills still pull from your bank Marketing you can do a lot of social media for free in the beginning, but there is a bunch of noise to weed through today Funding yes. It cost money to make money, it takes your time and cost you money to meet with the right people that will fund your business.
- 14. fact: 4 out of 5 people who use the phrase its cheap to build a startup have never built a startup (and probably never will) the remainder are independently wealthy
- 15. how to pitch: 1. Know that you will be rejected 2. You will underestimate the number of times you will be rejected and how long it will take you to raise $. 3. Ask rejecters for feedback (Real feedback) 4. Ignore most of said feedback* 5. Seek mentors and allies (note: most important point of this entire presentation) * Knowing what to ignore is not easy
- 16. fact: A Venture Capitalist looks at 2000 deals a year.
- 17. fact: A Venture Capitalist looks at 2000 deals a year. A Venture Capitalist Reads the first two paragraphs of the executive summary and reviews the financials (Aka EBITDA)
- 18. Fact: A Venture Capitalist looks at 2000 deals a year. A Venture Capitalist Reads the first two paragraphs of the executive summary and reviews the financials (Aka EBITDA) The ones that fit - get set a side- the rest are thrown into a pile, never to be looked at again.
- 19. fact: A Venture Capitalist looks at 2000 deals a year. A Venture Capitalist Reads the first two paragraphs of the executive summary and reviews the financials (Aka EBITDA) The ones that fit - get set a side - the rest are thrown into a pile, never to be looked at again. 50 receive Due diligence: < 10 are invested in
- 20. fact: A Venture Capitalist looks at 2000 deals a year. A Venture Capitalist Reads the first two paragraphs of the executive summary and reviews the financials (Aka EBITDA) The ones that fit - get set a side - the rest are thrown into a pile, never to be looked at again. 50 receive Due diligence: < 10 are invested in Many quality dealsbut were not going to do them. Theyre just not Right for us
- 21. common VC rejections Were just not that into you we think you are too early for us we have too many deals in our pipeline we dont understand the market wed like to see some local investment youre raising too much youre raising too little if only you did a + b, wed be a better fit
- 22. conviction
- 23. more funding ideas Friends & Family: your network is stronger than you know. (We are doing this now) Hold a fundraiser: make it awesome. (We are combining this with F&F) Sell your stuff on eBay: Its a short term sacrifice. Make money in your free time: Mowing lawns? Delivering pizza? Hire a Grant Application specialist: they often work off of commission and there are small biz grants
- 24. myth #2: Startups are funded on a napkin
- 26. reality: Angels and VCs: 15-40+ Page Business Plan Regulation A: 35-60+ Page Business Plan Regulation D: 35-60+ Page Business Plan Crowdfunding: 4-40+ Page Business Plan
- 27. myth #3: A good idea wins every time
- 28. slightly closer to the truth A good idea, good execution, good timing, perseverance and relentless sickening work ethic will win.
- 29. reality: Startups and small business owners, run businesses (duh)
- 30. reality: Startups and small business owners, run businesses (duh) Funding is limited by network: Unlikely to connect with appropriate advisors and investors
- 31. reality: Startups and small business owners, run businesses (duh) Funding is limited by network: Unlikely to connect with appropriate advisors and investors Raising Funds: Uncertainty of time, outcome, and expense
- 32. fact: It takes 3 months to file or prepare for fund raising
- 33. fact: It takes 3 months to file or prepare for fund raising Fund raising can take 6 months to 2 years for ONE round
- 34. There is nothing Fair about being an entrepreneur
- 35. fact: YOU build the future. The best way to predict the future is to invent it. Alan Kay
- 37. Because without us crazy, delusional people who do this the world would be a boring, stagnant place.
- 38. Both brilliant and both contributed so much to science Tesla died broke Edison died rich
- 39. What of those with better ideas who lacked the resources and werent heard at all?
- 40. what we need to change 1. Encourage/educate more entrepreneurs and family & friends on how to invest in startups 2. Think Tanks (BCI TT coming soon). Work together (Globally). Create Communities (Crowdfunding!) 3. Create better entrepreneurial programs for Universities 4. Host more events: showcasing startups, providing education, and to find investors
- 41. Bridge Capital Investments We are here to help We are passionate entrepreneurs that know how to provide the foundation (a community, capital and business development tools) to build successful companies from the ground up Reach out to us: Kyle.Benson@bridgecapitalinvestments.com Ben.Minges@bridgecapitalinvestments.com