Raising money 101James Routledge

🐔@jd_routledge

You don’t have to raise money

🐔@jd_routledge

*Reported on TechCrunch

*

To Raise

Not to Raise

Just because raising capital sounds sexy and cool, please don’t misinterpret or underestimate the ramifications it has. Nor should you forget the blood, sweat and tears required to build a huge company and then sell it for a big return. By expecting to raise money easily, you’re inadvertently expecting building a company to be easy. Give raising money the respect it deserves, as you do your business. 

🐔@jd_routledge

Individuals

Institutions

🐔@jd_routledge

Individuals• Invest personal cash• Typically investing 1-10% of

entire wealth in startups.

1) Small cheques in loads (hands off, spread bet)

2) Bigger cheques in few (hands on)

• They make money via Tax incentives in the UK (SEIS/EIS). They only make money on exits.

🐔@jd_routledge

Institutions• Have a big pot of money

from (10m-1bn)• They have investors too• Have certain investment

strategy/thesis.• They do a certain number of

deals per year, with a certain amount for follow on.

• They make money by taking management fees (2%) and carry (commission on profit) (20%)

🐔@jd_routledge

Funding timeline jargonIdeation stageAccelerators, Friends, Family, Angels, Bootstrapping £10k - £50k

Pre-seedAngels, Micro-VC, Syndicates£100k - £300k

Seed stageMicroVC, VC, Angels, Syndicates£250k - £1m

🐔@jd_routledge

Seed+/Prime-seed/Mango seed/BridgeExisting investors, Crowfunding, Angels, VCs£500k - £1.5m

Series A VCs, Family Office£1m-£5m 🐔

@jd_routledge

“Please sir, may I have some more?”

Quiet confidence

Conclusion(s)• Raising money is not the only option.• Really think if you want to go on that

path – think ahead.• Don’t get caught up in the hype and

startup jargon.• The focus isn’t on raising money, it’s

on building a good and growing company. Then raising money will be easy. 🐔

@jd_routledge