Professional Documents
Culture Documents
OF START-UP
FINANCING
How the Hell can you
raise money in
Singapore?
Tanguy Lesselin
Agenda
Introduction
How much do you need
Types of investors
Investment criteria
Investor pitching
Investor hook tactics
Valuation and terms
INTRODUCTION
Money is hard
to find when
you need it,
easy to find
when you dont
#
companie
s
Idea
Initial team
Prototype
Product-market fit
Traction
Proven business model (*)
Revenue scale ($1m, $5m, $20m)
Valuati
on
Think of financing as
several steps
01.2013
06.2014
01.2016
Seed
Series A
Series B
Pre money
valuation
1.5m
5.0m
15.0m
Investment
0.5m
2.5m
5.0m
Post money
2.0m
7.5m
20.0m
New investor %
25%
25%
25%
Remaining for
founders
75%
Prototype
Founding
team
56%
Product-market
fit
Early
customers
42%
Scale up
2m revenue
1000
customers
Etc.
HOW MUCH
MONEY DO YOU
NEED?
$20k
$50k
$100k
6
months
$60k
$120k
$300k
$600k
12
months
$120k
$240k
$600k
$1200k
18
months
$180k
$360k
$900k
$1800k
24
$240k
$480k
$1200k
Salaries
are almost
all
of it$2400k
months
INVESTOR
CATEGORIES
Investment
Valuation
Private
Equity
15.0m+
50m+
Venture Capital
(Series A,B,C)
2.0m 15.0m
4.0 50m
Business Angels /
Seed (Series AA)
100k 1.0m
500k 4.0m
3F
30k 0.5m
200k 2m
Incubators
10-30k
100 - 300k
Grants
50 - 500
N/A
You / Bootstrapping
Over 12 months
Founder 1
10 000
120 000
Founder 2
5 000
60 000
Founder 3
5 000
60 000
Founder 4
5 000
60 000
25 000
300 000
TOTAL
Grants
25k 500k
Take them if easy to take
Make sure you dont add constraints
to your plan: IP vs speed to market
US VCs dont value IP before the
company has reached a stage where
it good to be able to defend
Incubators
10k 50k for 10-20% of equity
(indicative)
Mentorship / networking / accelerator
over short or long time frame
Works for idea / prototyping / ProductMarket fit
Booster for investor pitching
Great for first time entrepreneurs
Business Angels
100k 1.0m
Seek industry experts and smart
money with investor connections for
future rounds
Seek deep pocketed so you dont
need too many of them and they can
bridge if needed
May pitch BA associations (?)
Series AA
Typically 500k
A few funds in Singapore
Convertible debt or priced
Venture Capital
2.0 15m
Series A still limited in Singapore
Look also outside of Singapore
Government funding
Crowd funding: Kickstarter (US)
Start-up competitions, demos, prizes
Incubators: JFDI,
Online networks: AngelList
Multi-stage funds / investors
VC INVESTMENT
CRITERIA
Main criteria
Idea
Team
Product
Traction
Big and
Bold
Misconceptions on market
size
Online travel agency is not USD XXX
billion, it is only the size of
commissions and fees (addressable
market)
Also do a bottom-up analysis to
triangulate
A winning team
A+ people
Complementary
skills
Proven working
relationship
Ability to recruit
other top people
Ability to reach product-market
fit fast
Fact-based, ego put aside decisionmaking
Criteria ranking?
Dont rate
average in all
criteria, be
exceptional in
INVESTOR
PITCHING
First meeting
Pitching presentation (10 slides)
Product demo
Pitching presentation
1. Elevator pitch
2. Problem
3. Solution (demo)
4. Market size
5. Business Model
6. Unfair advantage
7. Competition
8. Marketing & Sales
9. Team
10.Finance and milestones
10 slides
20 minutes
30 point font
INVESTOR HOOK
TACTICS
DREAM
Business Angels
Fund when you can make them
dream
before product development,
before launch,
before pivot implementation
Business Angels
Predefine everything
Valuation
Shareholder Agreement
Process and Timing
Seed / VC stages
Get PR before starting funding
Sexy and committed Advisory Board
Key people pool (20% pre money for
instance)
Future team hires
Some key milestones fully achieved
No mess to clean up (leaving cofounder, )
Create a competition
You want investors to feel the
pressure
Competition enables better
valuation, easier terms, and faster
closing
Fundraiser or not?
No for Angel / Seed stage
Potentially yes for Series A
Probably yes for later rounds
(Technology oriented investment banks)
Why?
-
VALUATION AND
TERMS
Valuation?
There is no good model (DCF, P/E,
P/S)
Comparable (check thefunded.com
and other fund raising from
comparable start-ups)
You have to be a compelling
investment opportunity
100
10
Pre-money
valuation
40
20
0
if
if
Comparable:
IPO, trade
Terms?
You
VC
You
VC
You
VC
Preferred dividends
Take equity-like risks if you want to own equitylike benefits
Ratchet
do not come back on agreed upon valuation
References
Financing Map Singapore:
http://sgentrepreneurs.com/wp-content/uploads/2009/03/megs-2
0090219.
png
Milestones based business plan (example): http://db.tt/fi4le3Rc
Capitalization Table (to simulate fund raising): http://db.tt/fi4le3Rc
Mint investor presentation:
http://www.slideshare.net/hnshah/mintcom-prelaunch-pitch-deck
How to pitch a VC:http
://www.slideshare.net/dmc500hats/how-to-pitch-a-vc-aka-startupviagra-how-to-give-a-vc-a-hardon
Guy Kawasaki:http
://www.slideshare.net/huer1278ft/the-art-of-the-start-37633
The VC perspective:http
://www.slideshare.net/benholmes/venture-capital-an-entrepreneur
smanual
Tanguy Lesselin
t.lesselin@cartouche.sg
+65 91 000 667