10 August 2020
Masterclass on Fund Raising for Founders
Scott Krivokopich shares his views on how a startup can become investment ready.
1982 Ventures was invited to deliver a Masterclass for the F10 (a Zurich and Singapore based fintech incubator and accelerator) “Prototype to Product” batch. Scott Krivokopich (Managing Partner at 1982 Ventures) shared his views on how a startup can become investment ready. Scott delivered tips on creating a strong groundwork to enable a successful relationship between an investor and a startup.
Scott stated, “To often there is an asymmetry between the perspective of a VC and a startup that can lead to disappointment down the line.” He continued, “Enabling a strong understanding between the two parties from the beginning is key in driving a strong working relationship.”
The Masterclass included insights on the common methods of VC valuation and how to craft fair equity term sheets and convertible notes. He concluded, “Understanding how VCs operate when making an investment allow startups to achieve their KPIs and demonstrate their product viability.”
1982 Ventures invests in seed stage startups and aims to work with founders at the earliest stages in order to ensure their companies are setup for success.
12 CONSIDERATIONS FOR STRONG FOUNDERS
1. Keep in mind that the terms you sign today will set precedence for terms in the future.
2. Use one of the proven legal templates, don’t let a non-VC lawyer write your documents.
3. Be extra careful when dealing with angel investors who have worked in private equity or other areas of finance.
4. Be wary of Seed and Angel investors touting “governance”, create an advisory board before creating your startup’s board of directors.
5. Adding board members is much easier than removing them, be careful about whom you add.
6. Realize every investor has their own thoughts and hang-ups about certain clauses or rights. Try to identify these early.
7. The deal is not “done” until the money is in the bank. Be sure there is a specific funding window in your term sheet.
8. Don’t accept milestone-based disbursements.
9. Don’t be afraid to discuss every point on the term sheet.
10. Be careful when setting pricing and valuation of rounds without a lead, overvaluing a funding round can kill a startup.
11. A flat round is often a down round and is dilutive.
12. Keep your cap table clean: Be careful about stacking notes. Take your ESOP pool seriously. Use a founder’s agreement with vesting.
F10 is a Zurich and Singapore based fintech incubator and accelerator which supports and guides startups in transforming their ideas into successful companies while stimulating worldwide collaboration with international finance organisations.