Breaking the Catch-22 raising capital, before the product is built.

1. Bryan Starbuck
Bryan@WhiteHatEngineering.com
Raising Bootstrap capital
Breaking the catch-22 of needing a bit of
capital to get the product built, in order to
raise the rest of the seed round

2. 2
THE GOAL
Raise a TINY AMOUNT of the SEED ROUND,
in order to build the product.
Break the catch-22 of needing to #1 build the product,
in order to #2 raise the full seed round.

3. 3
Timeline
1) Goal is to raise $100k early to start engineers building
Month A to D Month 1 to 5 Month 1 to 5 post-launch
2) This coves the METHOD to raise the money to break this catch-22
3) Engineers start
4) Raise the next $100k, after product built but not yet
launched (1 or 2 months before launch)
5) We must grow revenue in the first 5 months after launch
6) We can finish raising the rest of the seed round after the first 5 months post-
launch are growing revenue

4. 4
Full Seed round
Eventually, a startup should raise a $800k to
$1.5m seed round.
But initially, it needs a tiny bit (~$100k) to build the product.
The product nearly launched is needed to raise more money

5. 5
Experienced Angel investors
Experienced angel investors want to invest here.
Month A to D Month 1 to 5 Month 1 to 5 post-launch
POST LAUNCH. ~5 months+ after launch. At $15k/mo in revenue.

6. 6
Strategy
It is CRITICAL…
to raise the initial ~$100k from a
special group of possible investors.

7. 7
Strategy
Target investors:
1) Friends and family
2) People who are EXPERTS or PASSIONATE
about this industry or solving this problem

8. 8
Great pitch decks
Creating a BRILLIANT pitch deck is required.
If you won’t reduce risk for investors by
giving DETAILs and ARTICULATING
very very clearly, then it isn’t worth them investing.

9. 9
Great projected financials
Creating a BRILLIANT projected financials
is ALSO critically required.
Without it, entrepreneurs are often overly optimistic and in dreamy mode.
With it, entrepreneurs have done their due diligence,
removing hidden assumptions, made detailed plans,
and REMOVED RISK for investors.

10. Building a QUEUE of
Leads to Investors

11. 11
Start the QUEUE
Start the QUEUE by CVS EXPORT
from your Linked-In contacts

12. 12
Expand the QUEUE
Then expand people who may
have other great related contacts

13. 13
Qualifying possible investors
To find people who could be qualified:
1) Need to have enough money to invest
2) Need to be experts in this area, or
PASSIONATE about solving this problem

14. Letters of Intent
from target buyers

15. 15
Getting Letters of intent
You must prove to investors that you
are taking risk out of hidden assumptions

16. 16
Getting Letters of intent
Show the investor
Letters of Intent
from real target buyers
The Target Buyer
They signed:
1) They want to buy.
2) They approve the price.
3) They approve that their company would pay.

17. 17
Video
Ask them for a quote on video
Great ending of the pitch.
Visceral way for investors to see target
buyer show that they will buy at those
prices

18. 18
Video
Capture on video:
“My company has this problem, and we
will pay to get it fixed.
We will be happy to pay $39 per user per
month, because it saves us from XYZ.
We would buy this for all 45 sales reps in
our sales division because of ABC”

19. WARNING

20. 20
WARNING
Even with all of this guidance,
I’ve seen first timers spend most of their time talking to
experienced angels who say “Come back post-revenue”.
We know ahead of time that they are a waste of time

21. THE END
Bryan@WhiteHatEngineering.com
@BryanStarbuck