Fundraising tips from Silicon Valley and a few other thoughts for entrepreneurs

1. LESSONS FROM SILICON VALLEY
ARIEL POLER @ariel

2. Ariel’s Background
 Founder: IPRO, Topica, & Textmarks.
 Board Member: Kana, LinkExchange, Freedom Financial, Odeo,
StumbleUpon, Scan, Strava, Returnly.
 Investor: AdMob, Flixster, Slideshare, BrightRoll, Instructables,
VivaReal, Optimizely, Thumbtack, Viki, Pantheon,
ApartmentList, Mashery, Kongregate, LendingHome, NexTag,
Thync and many more…
 Personal: MIT (math), Stanford (mba), San Francisco (home).

3. Silicon Valley is Another Planet
It is not the US. It is not California. It does not include
Sacramento or Los Angeles.
Most of us are from “out of town”.
Company formation, financing, growth and sale have been
“systematized”. E.g., Series Seed Docs, SAFE.
Tons of talent and resources – but even more demand for it -
so you have to fight and pay up for it (salaries, rents, lawyers,
traffic…)
Kitesurf with Larry Page. Have a coffee next to Mark
Zuckerberg. Watch a concert with Jack Dorsey. It is difficult to
absorb during a short visit…

4. Tips for Pitching
Who you pitch to is the most important thing
Don’t confuse product pitches (or sales pitches) with
company pitches
Key points often overlooked
Customer acquisition strategy
Unit economics
It is not about checking boxes. It is about getting the
investor excited

5. "You are too early” and other excuses
Most investors do deals when they get excited by them. But
they don't like to say “I am not excited", so instead they use an
easy excuses, such as:
- You are too early
- The deal is too small
- I want to see more customers/revenues/technology
Be careful about trying to solve address their excuses, because
once you do they are likely to find others. Instead, figure out
how to get them excited.
Investors like to keep their options open.

6. On "average", It takes 6 Months...
But averages are often meaningless
"Hot deals" are done in a few weeks, sometimes a few
days
Many deals never get done.
And somehow the average is 6 months...
The best thing you can do to increase the odds of a
successful financing is to move your business forward. Be
careful about spending tons of time fundraising.

7. International Companies have better
chances of fundraising elsewhere
• Silicon Valley is the only region with too many good deals.
Investors elsewhere HAVE TO invest outside their region,
but we don't. So the bar is much higher...
• So non Silicon Valley companies might be better of
fundraising in places such as London, New York or Boston.

8. Seed Valuations & Terms
• Most seed deals are convertibles with a cap, many are priced with
simple Series Seed terms. SAFE.
• On average most seed deals are valued in the $4MM-$8MM range.
Some have stratospheric valuations ($12-$18MM). Particularly YC
companies.
• Amounts raised vary from $250K to $2.5MM. Most are around
$1MM.
• Increasingly common to have no lead, no board, and a rolling close.
Although many still have a lead.
• Angel investors, seed funds, AngelList and accelerators all “play
together”.
• Deals are often done in a matter of days or weeks.
• A & B remain similar, but larger amounts of $
• New thing: large late stage deals, e.g., Snapchat, Uber

9. Tidbits for Entrepreneurs

10. You can’t follow all the advise
that you get
Silicon Valley is very diverse and there are many
philosophies and approaches that co-exist here
You must find the approach that works for you
Advise should help you gain insights and to experiment
It is the same for competitive athletes…

11. Don’t believe what you Read
Most success stories are made with 20/20 revisionist
hindsight
It often takes time, e.g. StumbleUpon and Twitter were
not overnight successes as some people think…
20/20 Hindsight gives great strategic vision. Realistically,
successes are built incrementally.
Anecdotes

12. Speed is overrated!
What good is going fast in the wrong direction?
The better you understand where you need to go, the
faster you can move
But, never stand still!
If you have money you will spend it… Get it when you
know how to use it

13. Risk is your friend
Make big bold bets. All of the most successful
entrepreneurs do!
Use time to diversify: focusing on one thing at a time
But it is OK to experiment with different things for a
while until you decide what you want to focus on. But
just for a while…

14. Hire Slow & Fire Fast
The moment you start thinking someone might not be
working out, he/she most likely isn’t
But letting someone go is difficult and painful for everyone,
so…, take your time hiring.
Same goes for co-founders, service providers, and others.
Talent Over Experience
References!!! Or better yet, a trial period.

15. Help me Help You
We have a very supportive culture in Silicon Valley.
Relationships rather than transactions.
Do your homework
The right people to talk to
The topics you want to discuss
Be Specific
Add value

16. How I choose
my entrepreneurs?
Did I have fun during the meeting?
Do I want to have him over for dinner?
Is the opportunity & market large & worthwhile?
Will the project have a meaningful impact?
Can I help?

17. LESSONS FROM SILICON VALLEY
ARIEL POLER @ariel