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Bootstrapping and

fundraising 

John Girard 

3/26/2014 

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My background 

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Bootstrapping 101 

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trepreneur (n). Someone who steals supplies frome to bring to the office.  

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 Bootstrapped 

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Why bootstrap 

mall market 

ime to market is not a factor  

ontrol is important 

o experience fundraising 

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2x time 

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2x cost 

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  , ,1/2 

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Fundraising 101 

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Investors fund milestones, not runways.

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wch

uedovive

How much $ you can raise$0 A lo

$0

A lot

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Why fundraise 

ig markets with entrenched incumbents  

ime-to-market matters 

apital intensive business 

ou like roller coasters  

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 invest 

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Funding stages 

eed Seed Series-A Series-B Seri0k $100k-$2M  $500k-$10M   $2M-$20M+ $2M-

ers 

cardsanks

Friends/familyAngels 

Early VC

Early stage VCAngel funds 

Growth stage VCWealth managers 

GrowthPrivat

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 funding 

eed Seed Series-A Series-B Seri0k $100k-$2M  $500k-$10M   $2M-$20M+ $2M-

m 

a 

Bank  

Team  

Idea 

Market 

Proof-of-concept 

Paying customers 

Path to scale  

Proof of scale  Reliabl

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undraising 101 - Valuatio

re-money 

ost-money 

xample: ACME Corp. has a $3M pre-money

aluation and raises $2M from investors, making i5M post-money. Existing shareholders have 60f the business and the new investors have 40%

he business. 

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  -Preferences 

ight of first refusal

nti-dilution

iquidation preferences. Example: ACME raises from ABentures, who gets a 1x liquidation preference aftervesting $1M at a $3M pre-money valuation. What

appens if ACME sells for $2M? How about $20M? 

articipation. Example. ABC Ventures invests in ACME a the above, but now has a 1x participating liquidation

reference. What happens if ACME sells for $2M? Howbout 20M?

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  -Convertible Debt 

nterest-bearing note that has a medium length tend automatically converts to equity under set

ircumstances 

xample: ABC Ventures invests in ACME with a

1M convertible note bearing 8% interest thatonverts at a 10% discount to the first equity rounhat happens when ACME raises $4M at a $4M

re-money? 

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Fundraising toolbox 

xecutive summary 

resentation 

inancials / financial model

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Fundraising deck 

Title 

Problem 

Solution 

Early results 

Our unfair advantage 

Opportunity 

18-month plan 

Team 

Optional slides 

1.  Technology 

2.  Advisors / board 

3. 

Customer quotes4.  Key financial metri

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o raise or not to raise

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id investors till you decide to raise money, and then wh do, talk to them all in parallel, prioritized by expected

ue, and accept offers greedily. That's fundraising in onetence. Don't introduce complicated optimizations, and't let investors introduce complications either. 

draising is not what will make you successful. It's just aans to an end. Your primary goal should be to get it oveh and get back to what will make you successful—makigs and talking to users—and the path I've described wi

most startups be the surest way to that destination. 

good, take care of yourselves, and don't leave the path.

ul Graham (http://paulgraham.com/fr.html) 

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Questions?