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How to get funded in 15 days - the Data and Metrics Investors Need to See

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If you’ve ever tried to raise startup capital, you know what a time-suck it can be. Even for successful, seasoned entrepreneurs, it can take 6-9 months and hundreds of meetings to secure an investment.

Compressing the fundraising cycle can have a huge impact on a startup and its chances of success. This webinar will help you speed up your fundraising cycle by arming you with the information and data that startup investors want to see. We’ll also cover the best ways to present data to investors using the latest technology and communications.

Join Lighter Capital and Visible.VC to learn how Visible used their stakeholder engagement platform to help them secure funding in 15 days.

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How to get funded in 15 days - the Data and Metrics Investors Need to See

  1. 1. The Data and Metrics that Investors Need to See How to Get Funded in 15 Days
  2. 2. Please feel free to ask questions
  3. 3. • Fundraising can take a huge amount of time • Can be an enormous drain of resources • Represents immense opportunity cost • No guarantee of success The Fundraising Problem Most businesses need outside capital to scale. However:
  4. 4. • Legal documents • Financial data • Operational metrics and KPIs • The best ways to engage with various stakeholders The Fundraising Solution Visible.VC successfully secured growth capital from Lighter Capital in 15 days. To increase your odds of success, you need to know the information required by investor. This includes:
  5. 5. Meet the Presenters Allen Johnson Chief Investment Officer Lighter Capital Mike Preuss CEO Visible.VC
  6. 6. About Lighter Capital Founded in 2010, Lighter Capital has created a new fundraising path for early-stage tech companies. Lighter Capital has deployed over $100M across 400 rounds of financing. Lighter Capital Revenue Based Financing • Up to $2M of growth capital • No equity dilution • No board representation • No financial covenants • No personal guarantees
  7. 7. About Visible.vc Founded in 2014, Visible is a stakeholder engagement and data distribution platform.
  8. 8. Visible helps power investor and management reports for over 500 companies across the globe.
  9. 9. Amount of time expected to close a round? • Will vary by stage and funding size • Realistic benchmark is 6-9 months to close Success Rate • 1% of companies successfully raise VC funding1 Common reasons for No • Lack of scale / Total Available Market (TAM) • “How does this become a $100M business?” BENCHMARKING Securing Equity Financing 1) Harvard Business Review, Six Myths About Venture Capitalists
  10. 10. Key Takeaways: • The hurdle for growth & metrics have never been higher • Vast majority of investors don’t get excited if under 3x growth • Raising future rounds is challenging SaaS VC Funding, highest bar ever Source: Chris Janz – Point Nine Capital What does it take to raise capital, in SaaS, in 2018?
  11. 11. Amount of time expected to close a round? • Will vary by stage and funding size • Realistic benchmark is 3-6 months to close Success Rate • Varies by product, lender and corporate structure Common reasons for No • Poor/incomplete financial statements • Inability to produce required documents • Pathway to repayment is unclear or deemed risky BENCHMARKING Securing Debt Financing
  12. 12. Items VCs need to see • Legal Docs • Corporation documents • Cap Table Items VCs like to see • Team with a high pedigree • Business and Finance KPIs w/ traction • Lines not dots. Investors want to get to know you, see trend over time, etc. Items VCs want to see • Customer Acquisition Model • Hiring Plan • Insane Growth! WHAT INVESTORS NEED TO SEE Equity Financing
  13. 13. Items Lenders need to see • Historical financial statements (i.e. track record) • Revenue model – products, churn, concentration • Schedule of outstanding debt obligations • Corporate documents - formation, bylaws, etc. Items Lenders like to see • Revenue growth and pathway to profitability • Identified use of funds • Management team overview Items Lenders want to see • Projections – upside and downside scenarios • Transparency and consistency with story/numbers WHAT INVESTORS NEED TO SEE Debt Financing
  14. 14. • Personal guarantees • Restrictive financial covenants • True cost of warrant coverage Key factors to consider: Debt Financing Equity Financing • Equity dilution per round (~20-30%) • Company control – ownership %, board seats, etc. • Strategic advisor, benefits, networks
  15. 15. Visible.VC funded in 15 days • First phone call: October 12, 2017 • Submitted Application: October 13, 2017 • Due Diligence: October 16, 2017 • Sent to Credit Committee: October 17, 2017 • Terms offered: October 18, 2017 • Money Wired: October 27, 2017 CASE STUDY What Happened
  16. 16. Things were able to move very quickly because they: • Provided clean data • Proactively shared business metrics and reports • Detailed churn reports • Clean customer data directly from CRM • Quick turnaround of information requested • CEO was transparent about the business CASE STUDY How it Happened
  17. 17. It’s critical to have high-degree of transparency into your business • What information should you always know/track? • Reliable/crucial data sources • How this informs management decisions Understanding Your Business
  18. 18. • Clean & easily accessible financials. Don’t get locked into a platform, data your data with you. • True North KPIs. New MRR is a lagging indicator. E.g. Visible’s True North KPI = Product Qualified Trials. • ”CRM Data”. How much are they paying? How frequently? What is their contact info? How did we acquire them? Easy to pivot, report, filter, etc. What Data & KPIs should I track?
  19. 19. • What customer acquisitions channels are performing better than others? • What customer segments churn at a higher rate than others? • Are we growing fast enough to hit fundraising milestones? • What should we double down on? What should we hit pause on? Data  Informing Management Decisions
  20. 20. How to optimize your relationship with, and likelihood of success with, capital partners • Best channels / platform for communications? • Frequency, nature of communications? • Proactive vs reactive • Communicating with lenders vs VCs Communicating with Investors
  21. 21. How • Go where your stakeholders are (usually email!). The less friction the better. When: • $0 to $5,000,000 Revenue, send monthly reports • $5M+ Revenue send quarterly reports Where: • Be proactive. Investors who receive updates are 2x more likely to re-invest. Stakeholder Reporting: How, When and Where?
  22. 22. Company • Internal team members and management team Existing Stakeholders • Investors • Advisors • Lenders Potential investors, executives and lenders • ”Drip” them your sizzle metrics and Updates. Will create an engaged pipeline and help connects the dots. • Shortens the cycle considerably to raise capital and hire. Stakeholder Reporting: Who?
  23. 23. • Keep it concise, have specific asks. • Always use comparable metrics and rates. • Include Cash on Hand, Burn and Headcount. • Include your 3-5 true north KPIs. • Just do it! Get feedback and iterate. Format
  24. 24. • Transparency is key when building relationships with investors. • Demonstrate strong knowledge of business strategy, financials and key company metrics. • Understand both upside and downside scenarios. Allen Johnson Chief Investment Officer Lighter Capital RECOMMENDATIONS Advice to any companies seeking funding
  25. 25. • Fundraising is a process, treat it as such and make it a full-time job. • Have structured, clean and reliable data. It makes everything from strategic decisions to fundraising much easier. • Establish relationships with financiers (VCs, lenders, etc) and update them at a regular cadence. Remember lines, not dots. Mike Preuss CEO Visible.VC RECOMMENDATIONS Advice to any companies seeking funding
  26. 26. Questions? ?
  27. 27. Allen Johnson Chief Investment Officer Lighter Capital ajohnson@lightercapital.com Tom Malcolm Director of Strategic Partnerships Lighter Capital tmalcolm@lightercapital.com www.lightercapital.com @lightercapital Mike Preuss CEO Visible.VC mike@visible.vc @mikepreuss www.visible.vc @visiblevc