Exit Velocity, in partnership with Austrade's San Francisco Landing Pad, recently hosted the first US Fundraising virtual Bootcamp for 18 Australian Startups and Scaleups. The multi-day event was targeted specifically at Australian startups wanting to raise in the US in 2021.
The Exit Velocity Team will be running more of these Bootcamps in the coming months. If you'd like to apply, or find out how we can run a Bootcamp for your organization, please contact us.
If you're a startup looking to raise funds in the US - please get in touch. We'd be happy to meet with you to see if you're ready and how we can help.
"I love the way bootstrapping your busines is called running a "lifestyle" business (not!). Is this a lifestyle anyone would actually choose?!!"
Company Introductions and Pitches
Each startup was asked to pitch their business to the group. This gave them a chance to introduce themselves and for the Austrade and Exit Velocity teams to assess their current positioning so they could compare it to their demo day pitch.
Investment Stages and Types
In this part of the Bootcamp, we focused on understanding the following investment stages including detailed information on priced versus unpriced rounds:
Angel Investment/Family Offices
Revenue Based Financing
The first 20 mins on day 1 gave us insight to pivot from our USA expectations.
Dispelling the Myths
Every Australian Startup (actually it's any country) has certain pre-conceived ideas about what the US market will mean to them. But every startup knows the US is a massive market, and it's the home of startup culture. So understandably they want to be here. This session covered:
Understanding the US market
Are you really ready to raise and do you know the commitment required?
What's the landscape for investment in my sector?
Success rates and funnel math
Getting 1,500 investor leads
Planning an investment campaign over 4-6 months
"Would Super Angels be a good 'pathway' to fundraising in the US? In terms of getting started and then hopefully tapping into their networks etc for the bigger/more formal fund raising round?"
Positioning for a Capital Raising
So how do you position your startup for raising funds in the US? For many startups there's a lot of work to do. Here are a few of the topics we took our Bootcamp attendees through:
Do you want to, and are you are ready to raise in the US?
How to get your pitch materials together
How to find your investor with targeted outreach and understand their deal history to ensure sector and stage fit
Come prepared with later questions (how can you support our business as well as providing cash)
Know your ask and be clear with what you are looking for/need
Hold your ground on things that matter to your business
Pitching to US Investors
So now you're ready to pitch, congratulations! In this session we covered the following:
How a VC will assess your pitch?
The First Meeting - what to expect
The Second and Third meetings - what's next?
The does and don’t of pitch meetings
Setting a price and valuation
Maintaining FOMO with the investment community
Closing the Round
Running an Effective Campaign
Just as you would set out your latest sales or marketing campaign, you must do the same for your investment campaign. In this session we took Startups through the steps they need to complete in order to set up and run a successful fund raising campaign in the US:
High level campaign structure
How to prospect
Identifying your investor personas
What you should say in an email
Outreach tools and processes
What about hiring employees in terms of employment agreements / benefits / expectations of US employees being hired by Aussie businesses?
Day 3 was capped off with an exclusive fireside chat with some of Silicon Valleys biggest names in the startup and VC world. This reinforced everything the teams had been learning over the previous sessions and gave them first-hand experience of what it will be like to raise capital in this highly competitive market.
Questions and Feedback from the Founders
If these are the types of questions you're wanting to know the answers to, then please contact us. The Exit Velocity is very experienced in working with startups looking to raise capital in the US.
Can you claim a Series A funding use of funds for a Blitzscale if you already have surety around GTM and trials ?
You mentioned debt vs venture debt when discussing funding of hardware production/inventory. How do investors view venture debt?
How do VC's value startups for funding rounds? Usually a multiple of revenue?
Does traction in the US market from a revenue perspective drive a higher valuation and ARR multiple as you have traction in a larger addressable market?
Would also like to know if US Traction helps if you are raising A round to build out that growth rather than in Australia
Do prospective investors want to see the cap table in a pitch presentation?
How do you get an introduction to VCs when you don't have contacts in this space?
In an A round, if founding team want to dilute a small amount and take anything off the table is this typically unacceptable or a no no?
Is there a rough guide to how many US customers or dollar value of sales we should aim to have before approaching VCs in the US?
Are there any key factors VCs will use to discount valuations?