Fundraising tips for Endeavor entrepreneurs

1. Do’s & Don’ts of Silicon Valley Fundraising
Ariel Poler @ariel

2. Ariel’s Background
 Founder: IPRO (94), Topica (98) & TextMarks (06).
 Board Member: Kana, LinkExchange, Freedom Financial, Odeo,
StumbleUpon, Scan, Strava, Returnly.
 Investor: AdMob, Flixster, Slideshare, BrightRoll, Instructables,
VivaReal, Optimizely, Thumbtack, Viki, Vivareal, Kueski,
Change.org, Kongregate, LendingHome, NexTag, Thync,
Cornershop and 100 more…
 Current focus: Human Augmentation.
 Personal: From Venezuela. BS at MIT (math), MBA at Stanford.
Lives in San Francisco. Addicted to kitesurfing.

3. You can’t follow
all the advice that you get
 Silicon Valley is very diverse and there are many
philosophies and approaches that co-exist here
 Context is key
 You must find the approach that works for you
 Customize learnings to your situation

4. Who you pitch to is more
important than how you pitch
 It is all about investor fit
 Think about dating… Who cares about the restaurant
choice if there is no chemistry

5. Don’t focus on the checkboxes.
Investors want to be excited.
 The first iPhone was terribly for phone calls
 The Tesla Model X has silly doors
 Freedom Financial was a service business...

6. Sell your company,
not your product
 Do you have a compelling marketing plan?
 Do you understand your unit economics?
 How will you use your funds?
 Show plenty of runway. 18-24 month is ideal.

7. Don’t try to solve investors “excuses”
Most investors do deals when they get excited. But they
don't like to say “I am not excited", so instead they use an
easy excuses, such as:
- You are too early
- The deal is too small
- I want to see more customers/revenues/technology
Be careful about trying to “solve” their excuses, because
once you do, they are likely to find others. Instead, figure
out how to get them excited. Or, better yet, focus on the
business.
Investors like to keep their options open.

8. Control the timing
of your financings
 Once you have one term sheet, even a crappy one, you
have leverage
 Three weeks or three months? Same outcome. Give
investors a deadline! I’ve seen deals done in a week
 If you don’t have a term sheet, try to create some other
forcing function
 Avoid a permanent state of fundraising. Focus on the
business and fundraise when you are ready

9. Buy Yourself Time
 Always have plenty of runway – do round extensions if
necessary (and viable)
 If you can’t raise more money, cut your burn. The
earlier you do it, the less painful it will be

10. Know how to ask for help
 We have a very supportive culture in Silicon Valley.
 We focus on relationships rather than transactions.
 But, to get help, you must do your homework
 Determine the right people to talk to
 The appropriate topics you want to discuss
 Help us help you…
 Be Specific
 Add value

11. Don’t believe everything you read
in blogs and books
 Most success stories are made with 20/20 revisionist
hindsight
 It often takes time, e.g. StumbleUpon and Twitter were
not overnight successes as some people think…
 Hindsight gives great strategic vision. In most cases,
successes are built incrementally and with a lot of luck.

12. Silicon Valley Investors Like to
Uber to their Board Meetings
 If you are not based in Silicon Valley, consider
fundraising in New York, Boston, London, etc.
 Not much difference between Sacramento and Sao
Paulo
 Once you are here, it doesn’t matter where you came
from
 Moving to Silicon Valley is not always a good move

13. Leverage Your
Board of Directors
 Diverse composition
 You get what you put in
 Forest from the trees. Continuity…
 It is never too early to have a great board

14. Focus on direction & execution
over speed
 Speed is overrated!
 What good is going fast in the wrong direction?
 The better you understand where you need to go, the
faster you can move
 Move fast to determine the right direction! Then get
your execution right and step on it…
 But, never stand still!

15. Take Risks.
But One at at time!
 Make big bold bets. All of the most successful
entrepreneurs do!
 Diversify over time: focusing on one thing at a time.
Don’t “hedge your bets”.
 But, it is OK to experiment with different things for a
while until you decide what you want to focus on. Just
for a while…

16. Bonus: How I choose
my entrepreneurs?
 Did I have fun during the meeting?
 Do I want to have dinner with the entrepreneurs?
 Will the project have a meaningful impact?
 Is the business opportunity large enough?
 Can I help?

17. Hire Slow & Fire Fast
 The moment you start thinking someone might not be
working out, they aren’t
 But letting someone go is difficult and painful for everyone,
so don’t cut corners when hiring.
 Same goes for co-founders, service providers, and others.
 Prioritize talent Over experience
 Do thorough references!!! Or better yet, a trial period.

18. Do’s & Don’ts of Silicon Valley Fundraising
Ariel Poler @ariel