The Art of Startup Fundraising: Pitching Investors, Negotiating the Deal, and Everything Else Entrepreneurs Need to Know (Hardcover)

Foreword by Barbara Corcoran xiii

Acknowledgments xvii

1 Everything Started with Onevest 1

2 Raising Capital for Your Startup 5

Speeding Up the Machine 5

It’s Not as Easy as Reading an Article on Tech Crunch 6

The 18- to 24-Month Plan 7

Milestones 8

Breaking Even 9

Expectations of Investors 9

Outperform the Competition 11

Marketing 12

Storytelling 13

Leveraging Help 15

Divide and Conquer 16

The Rollercoaster of Emotions 17

Learn to Love Rejection 18

Connect the Dots 19

The Pros and Cons of Raising Capital 21

Don’t Underestimate the Need for Capital 22

3 Setting Yourself Up for Success 25

Investors Don’t Want to Invest 25

The Core of Your Business 26

Experienced and Talented Management 27

Organize Your Corporate Structure with a Legal Team 28

Helpful Advisors 29

Building Momentum 31

Team Alignment 31

Show Your Competitive Advantage 32

Know Your Terms 33

Vision 34

Attracting Investors Requires Patience 35

4 Crafting the Pitch 37

The Business Plan Problem 37

Get the Message Straight and Your Team behind It 38

The Elevator Pitch 40

The Pitch Deck 41

Awesome, Effective Pitch Deck Design 43

The One Pager 45

5 The Due Diligence Package 47

The Interview and the Visit 61

Find Balance 62

6 Sources of Capital 65

Bootstrapping 65

Credit Cards 67

Business Loans 68

Friends and Family 69

Crowd funding 71

Angel Investors and Super Angels 74

Angel Groups 76

Family Offices 77

Venture Capital 78

Venture Debt 80

7 Understanding the VC Game 81

Defining Roles in a VC Firm 81

The Process of Getting Funded by a VC 83

How VCs Monetize 84

VC Involvement in Your Company 85

Understanding the Value a VC Brings 85

Cutting through the VC Noise 86

Differences between Venture Capital and Private Equity 86

8 Investment Rounds Explained 89

Friends and Family 89

Micro Seed Round 92

Seed Round 95

Series A Round 97

Series B, C, D Investment Rounds 99

Initial Public Offering (IPO) 100

Research Is Critical 102

9 Deciding Investment Amounts and Prospects 103

Needed, Realistic, and Ideal Investment Levels 103

Your Valuation versus Market Valuation: The Asking Price 105

Persuading Investors with a Financial Forecast 106

Identifying Prospective Investors 108

Six Ways to Contact Investors 109

Creating a Buzz around Your Startup 111

10 PR: Creating a Storm and Building Momentum 113

The Rainmaker Code 113

Journalist Outreach 114

Self-Distributed Press Releases 116

More Buzz-Building Tactics for Smart Startups 119

11 What to Look For in an Investor 123

Why Selecting the Right Investors Is So Critical 123

Three Factors You Should Be Looking For in Investors 124

Three Factors to Avoid in Investors 126

Six Key Questions to Ask Potential Investors 128

Speed Is a Two-Way Street 128

Arming Yourself with Answers 129

12 Term Sheets and Terms 131

Term Sheets 101 131

Terms within Term Sheets That You Need to Know 140

Term Sheet Tactics 143

Smart Term Sheet Strategies 144

If Things Don’t Go Forward 145

13 Closing the Deal 147

The Importance of Urgency 147

Creating a Completion Schedule 148

Managing Expectations 149

Updating Your Investors 151

Closing the Deal Is Not the End of the Deal 152

14 Avoiding Common Fundraising Mistakes 153

Failing to Connect 153

Clarity and Doing What You Say 155

Self-Sabotage in the Deal-Making Process 158

15 Understanding the JOBS Act 161

The Game Changer 161

The JOBS Act 162

Implications for Startups and Raising Money Online 173

Implications for Individual Investors 174

16 Recommended Tools for Fundraising 177

Using the Right Tools 177

Organization 178

Research 181

Social Media 182

Outsourcing 183

Sales and Administration 184

Finding Your Investors 185

17 Red Flags 187

Key Red Flags for Startups 187

Glossary 193

About the Author 197

Index 199