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Pitching at Seed Stage - Techcrunch Early Stage
Pitching at Seed Stage - Techcrunch Early Stage
Pitching at Seed Stage - Techcrunch Early Stage
• C/C++ & Distributed Computing • Raised one of the first micro-VC funds in
2007 (Fund II, $15M)
• CTO at Financial Services startup in 1989
• 220+ investments
• Acquired by Reuters in 1993
• 70+ exits, 3 IPOs
• “Traditional” VC in the Valley since 2000
• $4B+ in follow-ons, $15B+ in exits
• One of the original ”Super Angels”, investing
since 2004 • Investing out of $100M Fund VI (seed)
and $100M Plus II Fund (growth)
• Former Board Member of the NVCA
Prepare
Rehearse
Get Introduced
Track
Update
Win
You need to identify firms that are comfortable with the level of uncertainty of your
opportunity. Do your homework, and research your pitch targets.
The funding ecosystem is now way bigger than most realize – there were over 1,000
firms investing at seed stage at the end of 2019. And there are tons of Series A firms
writing seed checks these days.
Use sources like AngelList, Crunchbase. Talk to founders in your particular sector who
raised recently.
•Companies that can not raise a Series A will raise a bridge from existing investors
Seed Prime
$3M to •Some funds like have positioned themselves as goto leads for Seed Prime rounds
$5M
•One traditional VC, with micro VCs investing pro-rata and adding strategic angels
Series A •Syndicates of micro-VCs leading smaller series A rounds
$5M to •Family Offices, Strategics, Micro-VCs + Crowdfunding pools as alternative
$15M
•Another traditional VC (or two), with insiders coming in for pro-rata. Corporate VCs start showing up.
Series B •Same mix as Series A for alternatives plus the YC Continuity Fund and Strategics
$10M to •Family offices and growth investors coming into Series B rounds of top performing companies
$30M+
•Mix of traditional/growth VCs, PE firms, hedge funds – and the Softbank Vision Fund. In parallel, secondary transactions.
Growth •Alternative: direct co-investments from LPs, hedge/mutual funds, cash rich corporates
$20M to •SPVs (Special Purpose Vehicles) coming in all over the place
$100M+
7/22/20 Pitching at Seed Stage
Target: Qualify
Covid has changed the way VCs do business. Most don’t spend time with founders face to face –
a must in previous times.
As you pitch, ask questions like “when is the last time you made a brand new investment (at
seed stage)?” or “how has your investment process changed as a result of Covid?”.
Firms have to accept they will invest in founders they have not met (Uncork has made 4 of these
investments in the last 4 months). Some are still struggling with this.
During the first couple of months of the pandemic, most partnerships focused on portfolio
triage. Now it feels like a lot of firms are back at investing (with new processes), and we have
seen a robust level of activity at seed and follow-on stages. “Hot” deals can be done extremely
quickly (which is counterintuitive).
7/22/20 Pitching at Seed Stage
Target: Identify your lead(s)
There are two types of investors: those who lead, and those who follow.
The lead’s responsibility is to 1) negotiate and set the terms of the round, and 2) help you
assemble your funding syndicate.
Picking a reputable firm as lead investor will help you build a stronger syndicate, and will make
the closing process much faster as other investors will trust the lead’s process and due diligence.
In today’s market, you may almost fill up your round with “follow” commitments. But these are
useless until you get a lead. So focus on finding a lead first (typically larger firms), and then work
with them on filling up the round with other firms and angels.
Materials:
Pitch deck
Backup slides
Sell How?
Against Whom?
How Big?
Be in the groove, think and act as if you were pitching VCs in their offices
Prepare your list of target VC Partners, and ask who can effectively introduce you
Once your spreadsheet of intros is ready, initiate the initial batch of discussions
I don’t advise having more than 10/12 conversations at any point in time
Most seed stage VCs will read cold emails, just send a compelling narrative that gets us
to want to learn more (some will ask for a deck, others for a short intro call)
Key points to record are pushbacks, feedback, interesting ideas – and most importantly,
firm’s process and next steps
Momentum in fund raising is the most important, be prompt with follow-up emails and
meetings
As you become more comfortable with the pitch, you’ll get a feel for what works better
If no one bites, you may need to redo the pitch – or go back to the drawing board
(entirely)
It only takes one investor to give you the runway to clear the next round’s hurdles
It’s not easy, it’s not fun, but that’s the job
@jeff / @uncorkcap
jeff@uncorkcapital.com