The document provides advice on seeking funding for startups. It recommends proving your concept first before seeking funding by building a prototype, getting customers, and collecting real-world data. This makes the startup more attractive to investors and helps secure funding at a higher valuation. Examples like GoPro, SmugMug, and Dropbox are given that show the importance of proving concepts without outside funding when possible before approaching investors.
2. Do you need the money?
S Funding important for scaling, intensive capital needs,
accelerating growth
S Funding much easier to get after proving concept
(valuation also higher)
S Not all startups need outside funding
S Advice: Go as long as you can without asking for money
8. PCH
S Located in Shenzhen, China
S Huge supply chain company
S Needed $200k USD to build circuit boards
S Banks, VCs, turned them down
S Founder Liam Casey asked factory to build it for him first
S Offered his passport as collateral
9. Do you need the money?
S Hustle, hustle, hustle
S Build prototype, demo, proof of concept before asking for
money
S If possible, find a way to acquire customers, get real
world data, then seek money
S If cash-flow is business supporting, may not need funding
ever
10. Looking for money
S Ideas are a “dime a dozen”
S Investors want to know your team can pull it off
S Management team covers all needed areas to succeed
S Technology / Development, Marketing/Sales/Business
S Prove the concept with real customers
S Go out there and get customers with your product
S “Pivots” are essential | Your original ideas rarely work
12. DropBox
S Total VC capital funding of 257.2 MM USD
S Valuation possibly > 1 Billion USD
S Annual revenue > 240 MM USD for 2011
S Very interesting method of getting initial funding
13. DropBox
S Founder Drew Houston originally use “Customer Development”
methodology by Steve Blank
S Customer Development process
S Talking to customers
S Using feedback to develop and refine product
S Then, Drew Houston had an animated video created of a
product that did not exist
S Shopped the video to investors as “alpha version” and got
funded
S … then built the product.
14. Summary
S Ideas are just ideas
S You need to execute and test the market, to know what’s
out there
S At least have working prototype to show people, get
feedback loop (Customer Discovery)
S Real data (proof) trumps all funding at that point is just
to scale a working model