164 lines
4.3 KiB
Org Mode
Executable file
164 lines
4.3 KiB
Org Mode
Executable file
#+title: Section 3| Lesson 18 - What is a VC / How to Raise Money
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#+HTML_HEAD: <link rel="stylesheet" type="text/css" href="../_share/media/css/business.css" />
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* Links
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#+attr_html: :class links
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- [[./../mba-main.org][TOC | Business]]
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- [[https://www.udemy.com/course/an-entire-mba-in-1-courseaward-winning-business-school-prof/learn/lecture/4282944#overview][S03:L18 - What is a VC / How to Raise Money / Get a Board of Advisors]]
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* Notes
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** Intro
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| year | who |
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|------+------------------|
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| 1-2 | angel investors |
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| 2-3 | equity investors |
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*** angel investors
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- people that fund early stage companies
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- about 100k in general
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*** banks
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- never use them
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- if you miss one payment they will seize everything
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- they are blood suckers
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*** equity investors
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- high worth individuals
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- venture capitalist firms
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- want equity
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*** "A" Round
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- first round of venture capital money
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- make sure to present correctly
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** Equity Investors / Venture Capitalists
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*** most important investment characteristic
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- NOT "good business model"
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- it is MANAGEMENT
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- business model is irrelevant
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- management team is the MOST important thing
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*** how to find out if the team is good
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- have they sold companies in the past
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- their employees like them
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- glassdoor.com and do a search
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- search linkedin if you can find someone who can vet these guys
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- past performance is VERY indicative of future performance
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- they want to back someone who made a company
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** How to Meet High Quality People
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*** how to get a board of advisors
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- go to linked in and do an advanced search
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- enter the keywords that are relevant
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- keyword of interest
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- your university
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- your current zip code
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- ask for help
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- send a short message
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"John hope all is well. I am also from Canada/ also went to NYU/ etc. Please let me know if you have time for a coffee in the next few weeks. thanks"
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*** in meeting
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- first half
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- get to know them
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- business is about relationships
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- talk about what you have in common
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- city
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- university
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- final part
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- thank you for your time
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- please let me know if I can ever call upon you as an advisor now and then
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- great, Ill call upon you every now and then thanks
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*** follow up
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- meet up every 3 to 6 months
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- remember something you talked about that was interesting to the person
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- follow up by sending them a message / email/ etc with something interesting on that topic
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- add value by sending messages
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- in months ahead every now and then
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- that help them out with their business
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- based on something you talked about
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** VC Capital Raising and Terms
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*** Who are the Investors / LPs?
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- high net worst investors
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- big endowments
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- pension funds
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*** What are the Terms? (2 and 20)
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- generally 2% annual fee, this pays for maintanence
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- 20% buyout when you sell
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*** How do you harvest and investment?
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- go public
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- get sold (to another company)
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*** returns
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- 5 by 5
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- 500% return within 500 years
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- because most investments go belly up
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- most companies declare bankruptcy in 5 years
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*** valuation
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- in five years, is this company going to be more or less relevant than it is today
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- long term vision
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- you actually prefer downturns so you can buy cheaper
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** Investment Stages
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*** initial | seed
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- angel investors
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- family
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*** venture capital
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- A Round
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- need to grow your business
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- hire more engineers
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- early stage vc firm
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- about a 1.5-2 years
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- B round
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- second stage vc firm
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- another 1.5-2 years
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- C round
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- final stage vc firm
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*** final | IPO - Initial Public Offering
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- revenue grown slows
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- still positive
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** How to Pitch to a VC
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*** prepare 3 pitches 30-5-30
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- 30 second pitch
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- most important
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- simple to understand
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- understanding in one sentence
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- if people understand it, you'll get your first meeting
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- 5 minute pitch
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- 30 minute pitch
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*** sell yourself
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- you are what they are actually buying
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*** discuss what is different about your product
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*** be ABLE to discuss competition and market
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- know the size of the TAM - Total Adjustable Market
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- if you don't, they'll assume you don't know what you are talking about
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*** have basic financials ready for discussion
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- a few annual revenue expense line items
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*** what are your partners, investors and advisors
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- talk about them
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*** show the product
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- most people dont
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- show it right away
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*** keep it simple
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- be passionate
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- speak from the heart
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