Pot of Gold

0:00 So a lot of people have written blog posts on how to create the perfect fundraising deck. The right 10 slide deck, the right 20 slide deck. And I like boiling things down to the ridiculously simple. I actually think there are only two things you need to do successfully to raise money. So I'm going to go to the board. This is your company. You're down here. Time, value.

0:29 The first thing you have to do is demonstrate that there is an opportunity for a big pot of gold.

0:37 There's a lot of money in investing in this.

0:39 The second thing you need to do is show that you have a low risk path to getting there.

0:50 Sounds silly, sounds simple, but if the investor believes there's a low risk path to a big pot of gold,

0:56 they're going to write you a check.

0:58 So now the hard part.

0:59 So how do you do this successfully?

1:02 So most entrepreneurs are really comfortable talking about the problem that they are solving.

1:08 And they will go on and on and on about it.

1:10 They're also really comfortable talking about their particular solution.

1:16 However, the investor isn't buying the problem or the solution.

1:20 The investor is buying this, which is the future.

1:24 that's what they're buying so here's how I recommend that you do things you spend no more

1:33 than 20% of your time setting the foundation for what the problem is you spend no more than 20% of

1:41 your time on the solution and your traction because what you should spend 60% of your time

1:48 on is the future the very thing that you're selling I can't tell you how

1:53 many decks I see where they talk about the problem the solution and there might

1:58 be one slide that has next year's revenue it's not effective you got to

2:03 spend your time here so when I say spend your time on the future what do I mean

2:07 and what I mean is you have to give confidence in that low-risk path to the

2:12 big pot of gold so it might look something like this for Acme company

2:17 today we are raising $2 million to get us to the next 18 months and get us to the point where we're

2:24 going to have $3 million in annual revenue. It's a very well-defined step towards that future.

2:31 You're going to detail your sales funnel. You're going to detail product development, etc.

2:36 Notice I talked about revenue and time frame. 18 months, $3 million of revenue. I didn't talk

2:43 about how I'm going to spend the money necessarily. It's more important that you achieve those

2:47 milestones. You're then going to talk about what the next step is. And the next step is, well,

2:50 our Series A might be that we're going to raise $5 million and that's going to get us to $10

2:55 million in revenue. And it's a little vague. It's not as clearly defined. And you may even mention

3:01 what the next steps might look like, but it gets cloudy and fuzzy because you don't know.

3:07 It's still very early. But what you've done is you've given the investor confidence by spending

3:12 a bunch of time on the mechanics of how you're going to traverse this low-risk path to getting

3:16 to the big pot of gold.

3:18 And at the end of the day, if they believe there's a low-risk path to a big pot of gold,

3:23 they're going to write you a check.

3:26 I hope that's helpful.