1. Introduction – Goals For This Class Who should raise venture capital? Who should raise venture capital? What should you know about the process? What should you know about the process? Where to raise equity capital? Where to raise equity capital? When to raise capital? When to raise capital? How to go about raising capital? How to go about raising capital? Why do you need venture capital? Why do you need venture capital?

2. Common Misconceptions It’s too early to raise venture capital It’s too early to raise venture capital The VCs will steal my idea The VCs will steal my idea I will get ripped off financially I will get ripped off financially Only Angel investors do seed capital Only Angel investors do seed capital Bootstrap is the safest way to keep control Bootstrap is the safest way to keep control

3. What VCs Look For? Great People… Great People… With a Great Idea… With a Great Idea… Going after a Potentially Large Market Going after a Potentially Large Market Focus Commitment Credible Operating Plan First Principles: Then: __________________________ __________

4. Great People Plan and execute Plan and execute Adapt to change and remain committed Adapt to change and remain committed Lead by example Lead by example Surround themselves with “A” Players and Domain Experts Surround themselves with “A” Players and Domain Experts Have a track record of success Have a track record of success

5. Who Should Raise Venture Capital? Entrepreneurs who want to build a large, successful business Entrepreneurs who want to build a large, successful business Entrepreneurs looking to maximize their probability for success Entrepreneurs looking to maximize their probability for success Entrepreneurs looking for more than money Entrepreneurs looking for more than money Entrepreneurs who are planning for a large exit Entrepreneurs who are planning for a large exit

6. When to Approach a VC? When you’ve done enough work to convince yourself of the opportunity... before you’ve made mistakes that devalue your team or corrupt your capital structure When you’ve done enough work to convince yourself of the opportunity... before you’ve made mistakes that devalue your team or corrupt your capital structure Get the Basics Get the Basics Clear articulation of the problem and market opportunity Clear articulation of the problem and market opportunity Easily understood value proposition Easily understood value proposition Informed opinion of market evolution/risks Informed opinion of market evolution/risks Clear articulation of a credible plan Clear articulation of a credible plan Sufficient customer validation Sufficient customer validation

7. Who Ya Gonna Call? Do Your Homework! Do Your Homework! Determine who invests in seed/early stage Determine who invests in seed/early stage Determine who invests in your type of business Determine who invests in your type of business Know something about the players and the portfolio Know something about the players and the portfolio Reputation and style Reputation and style Know what to expect Know what to expect Typical terms Typical terms Process Process Develop and execute a strategy Develop and execute a strategy Targets, timing, approach Targets, timing, approach

8. A Foot In The Door... And Beyond Get an introduction Get an introduction Respected entrepreneur Respected entrepreneur Limited partner Limited partner Be selective Be selective It’s all about the people It’s all about the people 60 second personal pitch 60 second personal pitch Where have you been? Where have you been? What did you accomplish? What did you accomplish? Why should I listen to your opinion? Why should I listen to your opinion?

9. Ask For The Order Get specific feedback Get specific feedback Understand next steps Understand next steps Efficient “no” better than a prolonged “maybe” Efficient “no” better than a prolonged “maybe”

10. Checklist  Have you gained buy-in from your family?  Is the team committed, flexible and each expert in his/her position?  Do you have the right expectations?  Have you validated the idea with several potential customers?  Do you have an informed opinion of the opportunity, the players, and how the market might evolve? √ √ √ √ √ √

11. Checklist (cont.) Checklist (cont.)  Do you have a tight, believable presentation?  Do you have a believable operating plan?  Have you done your homework on the VC and obtained an introduction?  Have you done a shakedown cruise? √ √ √ √ √