Brendan Baker, an MBA student at Oxford, created a phenomenal infographic (pdf) of our $1MM angel raise for AppMakr. Here's how to read it and what it means. Additionally, below is a 7 minute interview I did with Brendan going over the top points gleaned from the infographic.
Brendan followed our raise from before I even moved from DC to SF last summer. I made a few trips to SF as I began the raise process, and then moved to SF fulltime in July 2010. The raise was wrapped up by October 2010 (here's the party we had to celebrate!). The core of the raise happened over a 14 week period.
How to read the infographic:
- Chronologically, left to right, with dates at the top, starting in June and ending in October
- A beginning dot is an intro, then the resulting line is how long the intro took to play out
- Large circles are successful funds raiseed
- Brendan separated the intros into 3 groups, on the right-hand side: Timewasters, Old School and New School intros
- Timing is important: I tried to do the raise over the summer. Bad idea. Focus on spring, with fall being second-best. Avoid summer and holidays.
- Nail your message: We iterated on our message during the raise (not ideal). Watch the video for more details.
You can also view the slideshare with the full presentation.
Here are my top tips if you're fundraising (in prioritized descending order):
- Know your lingo and how to read a term sheet. The best book on this is called Venture Deals by Brad Feld. It has great tips on how (and how not) to pitch VCs.
- Know what size round you need, and why. Be able to justify that amount clearly and firmly. Understand the difference between a seed round (typically angels) and an A round (typically VCs), and how the audiences you're pitching to are different and have different motivations. An angel invests in the potential. A VC invests in the traction.
- If you're raising a seed round, optimize your AngelList profile. Here are some tips on how to do that.
- This is the best blog I've ever read about how Fab turned the fundraising process on its head using big data: "How Fab Raised $40 million with a lot of data and not much pain" Try to emulate that if you can (even at a smaller scale)
- Plan on 6 to 9 months to do your raise. If your startup is hot, you can do it under three months. Cash is oxygen. Make sure you have enough oxygen in tank when you're scuba diving (as Ben Narasin once told me).
- Go through an accelerator like YC if you can. At least apply. If they reject you, iterate and apply in the next round. That's valuable feedback.
- Use your personal network to get intros to angels and VCs. I'm happy to make intros; here's how I do it.
- Never give up. A startup doesn't die until the founders give up -- even if it's running on fumes. You will find a way if you want to badly enough.
- Here are some other tips I wrote a few years ago.
Here's the video interview between me and Brendan with my top tips: