Equity and Funding — If, When and How
There are a million articles out there on how to pitch, how to put together a deck, reach out to investors, etc. This is not one of them. This is a quick read and a deck I present often that speaks to the options you have as a founder — not all fundraising is the same.
If you and your cofounders (if any) are serious about your startup, then you’ve at least discussed at some point whether or not you need to raise money.
A lot of founders dread fundraising. Unlike what you see in the movies, it’s usually a long and arduous process consisting of meetings, decks, due diligences, the poking and prodding and (usually) lots and lots rejections. Whether you look forward to this or not, it’s an inevitable part of many, but not all, startups. So buckle in and figure out if this is in your future and how to make it the best and most efficient experience you can.
Last year, I was invited to mentor a Founder Institute class on Equity and Funding. They’re the folks that, if you’ve ever considered having an advisor, put out the FAST template that you should be familiar with (more on that in another post).
I put together a deck with some help from FastCTO members and my friend Ben Hron over at McCarter and English for this class, but it’s really useful for anyone — whether you’ve done fund raising in the past, considering doing it in the future or have a deck that you’re not sure works.
The most important slide, in my opinion, is this:
Obvious things investors look for…
- A well-defined and provable problem
- That addresses a sufficiently large population
- That your company/product(s) can solve to some reasonable degree
- With a team that can prove that they can execute and grow the company
- And make money doing it
- In a reasonable amount of time (3–5 years)
- With an exit strategy that can make investors money
- Where only the funding you’re asking for stands in the way
If you can’t defend every bullet point on this list, you’re not ready to pitch or fundraise, regardless of how much money you’re asking for or how great of an idea you think you have.
But none of that really matters if you’re not planning to raise money or you don’t know what kind of money to raise so you should really at least skim through the deck and see what’s right for you.
Happy fundraising (or not)!
FastCTO is network of real CTOs. We work with early stage startups and mature companies to provide CTO services and help companies succeed. We also provide highly specific buy-side and sell-side due diligences and audits.
We are not a dev shop, an agency or a staffing company.
For more info, check out fastcto.com or email us at info@fastcto.com.
