MFIN2210 Chapter Notes - Chapter 2: Economic Model, Elevator Pitch, Microsoft Powerpoint
11 Jun 2018
School
Department
Course
Professor
Chapter 2: How to Raise Money
Do or Do Not, there is no try
Determine How much you are raising
· If $500,000 seed round- talk to angel investors; seed stage VC’s
· If $10,000,000 – Large VC funds
Financial Models will always be wrong
*Focus on the length of time you want to fund your company to get to the next meaningful
milestone
· Be careful not to ask for more than you need
· Never give a range of how much you want to raise; it makes you seem unsure. Always give a
specific number
Burn Rate- Monthly spend assuming no revenue growth
Fundraising Materials
· Short Description of your business
o Also known as an elevator pitch
· Executive Summary
o 1-3 page description of idea, product, team, and business
· Presentation
o 10-20 page PowerPoint giving overview of the business
· Business Plan
o Most are sent via email
o 30+ page document
· Private Placement Memorandum (PPM)
o A traditional business plan wrapped in legal disclaimers
o Generated only when Investment Bankers are involved and are fundraising from large entities
· Detailed Financial Model
o 100% of your financial predictions will be wrong
o You cant accurately predict revenue, but you can plan out your expenses
o 1.) Assumptions underlying the revenue forecast
o 2.) Burn Rate or monthly cash consumption of business
· The Demo
o VC’s love Demos
o Prototype, or alpha- more important than business plan. It actually shows your vision
· Due Diligence Materials
Finding the Right VC
· Ask your friends/ other entrepreneurs
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
If ,000 seed round- talk to angel investors; seed stage vc"s. *focus on the length of time you want to fund your company to get to the next meaningful milestone. Be careful not to ask for more than you need. Never give a range of how much you want to raise; it makes you seem unsure. Burn rate- monthly spend assuming no revenue growth. Short description of your business: also known as an elevator pitch. Executive summary: 1-3 page description of idea, product, team, and business. Presentation: 10-20 page powerpoint giving overview of the business. Business plan: most are sent via email, 30+ page document. Private placement memorandum (ppm: a traditional business plan wrapped in legal disclaimers, generated only when investment bankers are involved and are fundraising from large entities. Detailed financial model: 100% of your financial predictions will be wrong, you cant accurately predict revenue, but you can plan out your expenses, 1. )
