This is a short beginners' guide to learn about startup fundraising particularly Seed and Series A round. CONTENT: Introduction Startup Funding 101: What is funding and why do you need it? Types of funding When to raise and how much to raise Understanding exit Key players in fundraising What matters to founders? Understanding dilution How to determine the valuation Understanding controlling terms How do VCs work? Seed and Series A Funding: Are you ready for funding? Preparation How to raise: processes, tips & tricks Recommended Reading Q&A

1. Startup Fundraising.How to raise Seed and Series A funding!
Rakesh Soni
CEO & Co-founder of LoginRadius

2. Introduction
Funding 101
• Fundraising meaning & why you need it?
• Types of funding?
• When to raise, How much to raise?
• Understanding exit
• Key players in fundraising?
• What matters to founders?
• Understanding dilution
• How to determine Valuation?
• Understanding controlling terms
• How VC’s work?
Seed and Series A Funding
• Are you funding ready?
• Preparation
• How to raise – Process, Tips, Tricks
Recommended Readings
Q&A
Content.

3. Introduction
Learning about the Speaker and his entrepreneurial background

4. About me.
• Engineering – IIT Dhanbad
• MS – University of Alberta (Canada)
• 4 Years work experience
• CEO/Co-founder, LoginRadius
• HQ in Vancouver, Canada

5. Other Offices:
San Francisco (USA), Toronto (Canada), London (UK) & Jaipur (India)
HQ - Vancouver, Canada
Founded in 2013
Industry Leader
Our Investors

6. Media & Publication
We also work with a wide variety of industries:
Travel & Hospitalities Public Sector Music & Entertainment Consumer Brands & Services
The Proven Partner for Your Success
Trusted by over 3,000 companies

7. Startup Funding 101
We’re gonna learn basics of Startup funding

8. Funding meaning & why you need it?
Your company gets money in return for
the equity i.e. you sell piece of your
company to investors.
Why you need it?
 To create a new business
 To sustain your business
 To grow your business bigger and
faster
 To sell some of your shares
(secondary funding)

9. Funding Types.
Primary Funding Secondary Funding
Investors buy a piece of your company from your
company i.e. they get equity for the money the
invested
Investors buy a piece of your company from you
i.e. you sell some of your shares to investors. You
get the money, not the company
• Most of the funding news are Primary Funding
• Various stages of funding
• Pre-seed
• Seed
• Series A
• Series B
• Etc.
• Most of the companies do not announce this
• There is no specific stage
• This is more like a mini-liquidation event i.e. exit

10. Is it for you?
When to raise?
How much to raise?
• Are you venture-type of business?
• Are you willing to partner with someone?
• Do you want to chase a big vision?
• Are you willing to increase the risk?
• Always be raising?
• Have at least 6-month runway
• Are you ready as a company?
• Are you all prepared?
• Balance between your dilution vs control
• Seed: 20% - 30% dilution
• Series A: 25% dilution
• Series B: 15% dilution

11. Understanding Exit.
When you sell your whole company to
some other firm. It’s also called
“liquidation event”.
 Everyone sells their shares
 Everyone gets their return i.e.
investors, founders, and
employees
 You may also go for an IPO but it is
very rare

12. Key Players.
• Investors
• Friends, Family & Fools
• Angel Investors
• Venture Capitalists
• Strategic Investors
• Existing board
• Founders
• Your executive team
• Lawyers
• Advisors/mentors
You, as a CEO, are the leader of all of them

13. What matters to the Founders?
DilutionControlFuture of Your Company
• That the reason you’re raising
• Is this right partner?
• Is this round amount?
• Will it help chase the dream?
• Board seats
• Can they replace you?
• Do not give control in Pre-seed,
Seed, and Series A.
• You must stay at driver’s seat!
• Try to own as much as possible
• Hard negotiate on all terms
including financial terms
• Dilution is not bad but
remember – it’s better to have a
small piece of bigger pie and
bigger piece of small pie.

14. Understanding Dilution.
$10M Company
$100M Company
Own: 75%
Worth: $7.5M
Own: 25%
Worth: $25M

15. How to determine the valuation.
There is not formula!
It’s all about your sales skills and story telling skills
Some tips:
• B2B SaaS Companies, valuation = 5 – 15 times their revenue
• B2C companies, valuation depends upon revenue per user, market size, etc.
• Reverse calculate the valuation i.e.
Valuation = Money you want to raise / % of equity you want to give away
• Make sure you negotiate very hard.

16. Key Terms.
Controlling Terms
• Board Seats
• Voting rights
• Vesting of your stocks
• Termination conditions
• Liquidation rights
• Etc.
Financing Terms
• Valuation
• Preferred shares
• Warrants
• Etc.

17. How VCs work?
Limited Partners
General Partners
Associates
Operations Team
They put the money in the Fund
They manage the money and
make investment decisions
They assistants to General Partners
They help portfolio companies, post
investment
VC Fund
8 – 10 years
fund life

18. Seed & Series A Funding
Readiness, Preparation, How-tos, Tips, Tricks

19. Understanding Funding Stages?
Pre-seed Seed Series A
 Money invested on an idea
 No team except founders
 MVP or no product
 $50K - $250K
 Friends, Family & Fools
 Have a prototype
 Some customers
 Trending upward metrics
 Small team
 Need money to build full product
 $250K - $2M
 Angels and seed VCs
 Fully functional product
 Already have customers or users
 Revenue or large user base
 Have leadership team who can
handle large money to grow
 $3M- $10M
 Early growth VCs

20. Are you ready to raise?
Pre-seed Seed Series A
 Idea
 Have co-founder(s)
 Have savings
 Have Family, friends and fools
who may invest
 Everything needed for pre-seed +
 Prototype product
 Have early adopter
 Have some metrics
 Understand market
 Clarity on vision & future
 Have a small team
 Need money to prove product-
market fit
 Everything needed for Seed +
 Leadership team
 Anchor customers or significant
user base
 Product-market fit
 Need money to grow faster
 Revenue or clarity on revenue
generation
 Clear market differentiation

21. Process.
Preparation
• The most difficult part is “preparation”
• It takes 6-months to typically raise a round
• Seed and Series A process is same
• Series A stages are more complicated, requires extensive work
• Work involved in each stage may vary depending upon the VC
Early
Diligence
Pitching
Term
Sheet
ClosedMeetings
Due
Diligence

22. Preparation.
Preparing Yourself
• It is very time consuming
• You need to work full-time fundraising
• You may not close the round
• Closing may take longer than 6-months
• Can business run without you?
• Fundraising is extremely stressful
Pitch Deck
• Build your story
• Practice
• Beautiful design
Preparing Diligence Items
• Data Room: All metrics
• Financial model
• Product demo
• Team is ready to talk to VCs

23. Booking Meetings.
Build the List
• Identify target investors – Angels, VCs
• Do research, identify General Partners
• Follow them on Social Media, read their
articles, understand how they make
investment decisions
• Get warm introductions through
your professional networks
• Meet them in events
• Reach out to them – emails,
cold calls, Twitter, Linkedin
Booking in-person Meetings
• Pitch your business and vision
• Build relationship
• Excite them
• Qualify, unqualify
• Book follow up meetings
During the Meetings
5-7 meetings a week for 6 weeks = 42 – 56 investor meetings.

24. Term Sheet.
What it is?
• Informal proposal to invest in your
startup
• Includes key terms
• Few days to 2 weeks to negotiate and
sign
• Ensure you line up VCs in a way
to that you get maximum no. of
term sheets within a week or
two
• This will help you boost your
valuation and negotiate easily
• Immediately consult with your
Board, Lawyer, and Advisors
What to do?
• Once everything is negotiated,
Investors and Founders will sign
term sheet with closing the deal
in 30 – 45 days
• You enter into formal due
diligence
Signing Term Sheet
Get at least two term sheets, so you can pick the best one and
negotiate easily.

25. Due Diligence.
What it is?
• Investors will verify everything you said
before the term sheet signing
• Finance
• Legal
• Technology
• Team
• Market
• Customers
• You should be well prepared
with all the material
• Ensure you do not fake anything
to get the term sheet
• Be transparent and helpful
• Keep pushing to the closing
deadline
What to do?
• Run the legal paperwork in
parallel
• Get a really good lawyer
• Make sure you read and
understand all the legal terms
Legal
Try to close the deal in 30 days and do not drag it beyond 45 days.

26. Closing.
What it is?
• All papers signed by all the involved
parties
• Money is in your company’s bank
account
• Once all the paperwork is ready
and the diligence is done. It
takes 3-4 days to get everyone
sign and wire transfer the
money
How long does it take?
• Celebration dinners with
investors
• Party with your teams
• Take a few days break!
Party time!
Until you have money in the bank account, nothing is guaranteed i.e.
you may lose the deal even at the closing stage!

27. Recommended Books
I highly recommend to reach them before you kick of your
funding campaign

28. Books.
This book covers
everything you need to
know about VCs and how
VC deals happen.
This books covers the
methodology of pitching
and how to carrying on
meetings to win. Not a
sales or psychology book
but pretty close.

29. Thank you.
Feel free to reach out if you have any questions, need advise!
Twitter: @OyeSoni
Linkedin: linkedin.com/rakeshsonii