How to Successfully Finance Your Startup in Every Stage of Development

May 7, 2008 5 Comments by maya

This presentation, used in a recent New Media Entrepreneurship Workshop for Israeli Startup founders, covers:

  1. The pros and cons of different equity capital sources (financing by founders, friends and family, angels and Venture Capitals).
  2. How to create and deliver effective investment raising presentations.
  3. The big DOs and DON’Ts of investment raising presentations.

This presentation was featured in Slideshare and you can view it in full screen by clicking the view button below.

Here’s a list recommended resources for entrepreneurs looking to get deeper understanding of the subject:

  1. The Startup Company Bible For Entrepreneurs: The Complete Guide For Building Successful Companies And Raising Venture Capital
  2. Angel Investing: Matching Startup Funds with Startup Companies — A Guide for Entrepreneurs, Individual Investors, and Venture Capitalists
  3. The Entrepreneur’s Guide to Finance & Business: Wealth Creation Techniques for Growing a Business
  4. The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything
  5. The Four Steps to the Epiphany
  6. Deal Terms – The Finer Points of Venture Capital Deal Structures, Valuations, Term Sheets, Stock Options and Getting VC Deals Done (Inside the Minds)

5 Comments

  1. Maya
    10 years ago

    here are a few valuable comments I received from a founder of an incubator active in Israel:

    a) Slide 5 – concerning “Debt capital” – an important point to add is that in early stages, debt capital is simply almost impossible to get (unless you take a loan with your home as guarantee – not a very recommended course of action…).

    b) Slide 6 – private investors (angles, VCs, incubators) can sometimes be the source already at the “concept” and “prototype” stages.

    c) Slide 13 – another “con” for angle investment is that they are not always professional investors, and do not always understand enough about the company’s business and about what it means to grow a start-up… So the recommendation to the entrepreneur should be – “be careful who you choose as a partner”. This is always true, of course, but is even more important when it comes to angles…

    d) An important note – you are comparing VCs and Angles. You are forgetting the incubators, who are emerging as another type of financing source, which combines some features of angles and some of VCs, and is a category on its own. The main characteristic of this category – lower “entry threshold” than VCs (combined with more resources, and more “established” and “professional” way of working than angles. When looking more closely, you will find that in fact, this category includes a few sub-categories, the most important of them are: (1) Incubators that are in fact investment firms (“mini-VCs”); (2) Incubators that are backed by large VCs, and are the platform for those VCs to do pre-seed investments, which otherwise they would not do.

    e) All slides about presentation flow: I like them. I would add one note of caution to entrepreneurs, though: It is very rare (at least when I am the listener…) that a presentation goes uninterrupted all the way to the end, or even that the flow is as was originally planned by the presenters. There are many interruptions, questions, jumping back and forth in the presentation flow, etc. This is not a bad thing! In fact, it is very effective, and it is also good for the presenter to create a real and active dialogue with the listener. All I am saying is, that the presenter should be ready for it, and not panic…

  2. Hugo Schotman
    9 years ago

    Hi Maya,

    Thanks for sharing the presentation.

    Since there is no audio with the slideshare presentation, would you mind sharing with us how you introduced the Shpigler video during your presentation?
    http://www.5min.com/Video/How-to-Raise-Money-From-VCs-4661

  3. Maya
    9 years ago

    Note sure I got your question. I just used it as a humorous way to introduce how (NOT) to approach some of the issues related. Is that what you meant?

  4. Hugo Schotman
    9 years ago

    Yep, that puts it in perspective 😉

  5. Maya
    9 years ago

    Have a look at the 10 worst opening lines when pitching to investors according to Guy Kawasaki:

    “Many entrepreneurs ask me what is the best way to open a pitch to potential investors. I’ll answer that question at the end of this posting, but first let me tell you the ten worst opening lines that you can use:

    1.

    You say: “I’m bright and ambitious.” Investor thinks: “That’s a relief because I usually invest in stupid and lazy people.”
    2.

    You say: “I’m a blue sky thinker.” Investor thinks: “You have no business model, and you don’t know how to ship.”
    3.

    You say: “I don’t know much about your firm, but I thought I’d contact you anyway.” Investor thinks: “You’re a lazy idiot–why are you wasting my time?”
    4.

    You say: “I love to think of new ways to solve problems.” Investor thinks: “Is this a high-school science fair?”
    5.

    You say: “I have lots of great ideas, but I have trouble figuring out which one to try. Let me tell you about a couple.” Investor thinks: “I want to know which idea you’re going to kill yourself trying to make successful, not which ideas have crossed your idle mind.”
    6.

    You say: “I’ve always wanted to be an entrepreneur.” Investor thinks: “I’ve always wanted to be a professional golfer. So what if you always wanted to be an entrepreneur?”
    7.

    You say: “I’m sure you are aware of the growing need for security. Web 2.0, Open Source, whatever.” Investor thinks: “If you’re sure I’m aware, why are you telling me you’re sure I’m aware.”
    8.

    You say: “If you sign an NDA, I’ll tell you my idea.” Investor thinks: “You are clueless. How can you not know that venture capitalists don’t sign NDAs?”
    9.

    You say: “The last time I contacted you, I…” Investor thinks: “I’m going to fire my secretary for putting this clown on my calendar again.”
    10.

    You say: “My goal is to build a world-class company.” Investor thinks: “How about you ship and sell the first copy before we talk about world-class anything?”

    Now you know what not to say. Here’s what you should say:

    “This is what my company does…”

    It’s that simple. What you’re trying to do is get potential investors to fantasize about how your product or service will make a boatload of money. They can’t fantasize if they don’t know what you do. And they don’t want to be your friend, mother, or psychiatrist until they understand what you do, so cut the crap and explain what you do. ”

    source: http://www.sun.com/solutions/smb/guest.jsp?blog=pickupavc

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