What to expect when raising money for early stage ventures

1. Early Stage Ventures
Alberto Sfolcini
Financing New Ventures 2013, UCSF

2. year 2013
Lack of VCs who invest in early
stages of companies
VCs prefer to invest later when things have
been de-risked, they want to see proof of
concept

3. proof of concept
Capital Efficiency
Value Creation
Virtual Companies

4. Capital Efficiency
Every dollar you are spending need to be
useful in terms of advancing you to proof of
concept
minimize the Burn Rate

5. Value Creation
How much value are you creating out of
the money you are burning
How you will be able to reach the
value inflection point
Ex. Create a "beta" is your value inflection point

6. Virtual Companies
Do things virtually, globally, minimize costs
work from home, join incubator or an
accelerator
Outsource, no payrolls
do not incorporate until there is some sort of
proof of concept

7. $$$
how much money do I actually need to
reach a value inflection point?
can I work at nights and on weekends ?
can I use consultants ?

8. raising Money
VCs
Angels
Incubators and Accelerators
Crowdfunding

9. VCs
80% of world's VCs lives around Silicon Valley
they are not really investing in
early stage ventures

10. Angels
around 250.000 angels in the USA
they are not professional investment firms,
but they invest in early stage ventures

11. Incubators or Accelerators
They offer help in terms of mentoring,
workshops and facility for early stage of
ventures, sometimes they also invest

12. Crowdfunding
New way to raise money on the internet
usually small amount of money

13. conclusion
traditional venture capital may not be the
place to go these days because they are
not really investing in early stage ventures
looking for angeles and use crowdfunding for
money that can help you to reach a
milestone
get as close as possible to proof of concept
before talking with VCs

14. one more thing...
building a prototype can be much more
expensive than writing a beta software
this is why venture capital money likes Tech!

15. /end