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Outlier Ventures Weekly Brief Issue #51 View Online
 
  contact@outlierventures.io
 

Today we have Ana from our investment team taking over to share a few insights into structuring an equity fundraising campaign. 

“There are no secrets to success. It is the result of preparation, hard work, and learning from failure.”

Building a startup is tough. We understand that. And the venture industry is not the most welcoming. This combined with the complexity and tribalism within Web 3.0 doesn’t make it easier. Seeing first time founders navigating investment in such nascent market, I realised that despite all thought leadership and ‘guides’ out there people need all the help they can get at first. This is why we launched our pre-seed accelerator Base Camp. We help on various moving blocks around building a successful Web 3.0 project and fundraising appears to be the single area where we get questions consistently from week 1 to 12. So this week we’re talking about fundraising process management.

Lawrence broke down the numbers last week - most of the startups in Web 3.0 are raising seed and Series A in equity as the token markets have been drying up. Equity fundraising doesn’t have to be a slow and daunting process. In fact you want to get back to building as soon as possible. I am a huge fan of simplicity as overcomplicating systems usually leads to nothing but lost time and anxiety. So I like to think of the fundraising campaign as yet another sales process. You are essentially trying to sell a stake in your company in lieu of capital rather than sell access to a product for cash. 20 portfolio companies and one accelerator cohort later, it became evident that sticking to the fundamentals it takes 3 leaps or 7 steps to complete a fundraise.

Preparation

  • Set up tools
  • Lead
  • Connected

Execution

  • First meeting done
  • Considers investment

Closing

  • Received terms
  • Signed terms
  • Received money and announced

With that being said, the process still takes time and effort, don’t let us fool you. Adding a structure to it, makes it a bit more bearable. We always recommend to begin with tools set up. Any CRM system of your choice and a bunch of spreadsheets. When you try to sell a product you always start off by dividing into stages so you can track every prospect. It is the same with investors. Make sure you track all of your interactions appropriately.

Timing is another big part of ‘Step Zero’. The more money a firm manages, the likelihood is they’ll be less available. Be aware of regular and ‘VC’ holidays including Christmas, the week before Thanksgiving, the Skiing Week in February (apparently a thing), peak summer months, time around huge conferences (unless attending) and any big local holidays. If you are trying to schedule meetings during conferences, start doing this a few weeks earlier as most investors will book themselves back-to-back early on. End of quarters are also not ideal as most investors will want to wait and see how you finish the quarter which may not be super favourable. Same goes if your business is strictly seasonal, focus on the tail end of strong seasons. Fundraising right before or right after big milestones is great timing.

We are always looking to help the best Web 3.0 companies cross the chasm and build a great business. Applications to our pre-seed accelerator Base Camp are closing in under a week! Make sure to get your company on our radar here. And please share with friends to make their life easier. We have a long form coming up on fundraising so watch the space!

Reading: ‘The Outsider’ by Albert Camus
Listening: ‘Santa’s Coming Down the Chimney’ by Confidence Man
Using: SummarizeBot

Signing out 
Ana-Maria Yanakieva

 

From The Stack

  • Ocean protocol is continuing to hire more developers. Apply today to build the future of data marketplaces - Link
     
  • Engima's latest blogpost shares details  on their upcoming secret nodes launch and token economics - Link
     
  • Howtogeek has released a post introducing Brave and a note on how it compares against Chrome - Link
     
  • Chainlink released further details on how they are building a presence in Asia -  Link
     
  • Aragon court is now live on the mainnet - Link
     
  • The latest post from Orbs explores how SNAP fraud can be prevented with a blockchain - Link
What The Team Is Reading
 
 
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