Today’s Lunch-N-Learn at ATDC was John Yates giving his Top 10 Points for Raising Money From VCs: How To Do It Right From a Seasoned Veteran
John is one of the most experienced startup lawyers in Atlanta and he shared his views on what VCs were looking for in Series A rounds. He based the presentation on the 10 ‘Investor Scorecard’ criteria he uses with his clients to assess their readiness to raise funds.
Here’s a summary of John’s tips:
1. Market Size
Select a large and growing market and master it – conduct your market research on competitors, market size and customer profile.
2. Protectable Product / Service
Build a protectable product/service – articulate bariers to entry and remember patent protection under the America Invents Act.
3. Management Experience
Locate a seasoned entrepreneurial friend – and make him/her a member of your management team, investor or Advisory Board
4. Investor Quality
Find a small group of impactful angel investors to support the initial funding – avoid large numbers.
5. Cap Table
Don’t mess up the cap table – avoid investor terms or valuations that may preclude future financings
6. Ability to Pivot
Be prepared to pivot/morph the company’s business model – and display a willingness to do so, if needed
7. VC Targets
Carefully select VC targets and learn as much as you can about them and their key metrics before meeting – note the differences in funds in Silicon Valley, Boston, NYC, Atlanta/SE
8. Financial Experience
Master the financial numbers – and practice answering the tough financial questions
9. Sales Forecast
Prepare a believable sales forecast and be able to defend it
10. Presentation Style
Practice your investor presentation with colleagues, advisors and friendly VCs in advance