There are many good startup resources out there, and it can be confusing for founders to know which one to pay attention to. Well, here’s a good one for you! Y Combinator‘s Aaron Harris and Janelle Tam created a great resource for startups – a 70 page guide to raising Series A.
Main takeaways:
1. Fundraising should be a tightly run process. Start with a number (30!) of coffee meetings and narrow down. YC brings the best practices of running a a good fundraisng process.
2. Create FOMO and maximize leverage – competition from other investors can do that. The guide details how can founders use information to create leverage.
3. Fundraising is the CEO’s job and requires focus – but don’t get obsessed with it at the cost of taking your eye off the fundamentals. Very important to establish trust – don’t obfuscate the numbers and don’t invent fake deadlines.
4. Write an investment memo – it will help you articulate things in the way investors digest them. A good memo is an articulation of your overall pitch.
5. It can take months to complete the process. Plan to have at least six months of runway when you start, and start meeting with Series A investors shortly after raising seed. YC recommends starting when you have 12 months of runway.
Final point is on Funding Benchmarks, something I’ve written about in the past on VC Cafe. YC shares some interesting data points based on their follow on experience with core KPIs, valuation range and expected dilution. It can be pretty standard for SaaS and differ a lot in hard tech/moonshots.
For the full guide: https://www.ycombinator.com/resources/serial-vs-parallel-fundraising
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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