1.

Fundraising Strategy Template

This spreadsheet is a tool that will assist you in formulating a fundraising strategy for your Company.

Instructions
1 The light yellow colored areas are for the user to input information into the spreadsheet.

2 If a detailed explanation of a term exits the term is marked with two asterisks (**) and when clicked will link to the explanation

Where necessary, comments are provided to assist in the completion of cells where the requested information is not straightforward. Look
3 out for the small red tabs in the top right portion of a cell. In addition the cells with comments are highlighted in GREEN for quick reference
and easy access.

To view comments, Mouse over cells with red triangles in the upper right hand corner or select the comments command under the view
4
menu.

5 If you have any difficulty in completing the template, please contact your Venture Catalyst.
 2. Fundraising Strategy Template to be Completed

General Information
Company name
Value proposition **

Product/service status (prototype/alpha/beta/commercial) ** Size of available market ($M) **

Months to first revenues

Projections 2008 2009 2010 2011 2012 2013

Revenue ($K)
Operating cash flow ($K) **

Source
Friends &
Personal Angel Grants VC Bank Other
Family
Targeted source of capital ($K)

Attitudes and expectations Yes if

Are senior managers and founders willing to… No way Will consider necessary No problem
consult with investors to augment/change senior management, to include the CEO?
collaborate with investors in determining the strategic direction of the company?
consult with investors to raise additional capital?
ultimately cede control of the business to investors?
negotiate with investors to value the company?
provide liquidity opportunities for investors?
subject their existing equity ownership to repurchase and vesting?

Experience
Team In place
Startup Operating Industry
CEO L-Limited
CTO M-Moderate
COO S-Significant
CFO
VP Sales
VP Marketing
VP Engineering

Exit opportunity
Available exit options (Sale, IPO, Redemption) **
Potential acquirers
Years to exit
Exit enterprise value ($M)
Expected investor returns (current financing)

Follow on capital required to reach exit ($K)

Round after current financing 1 2 3 4 5 6 7
Months after closing (current financing)
Funding amount
Key milestone to be achieved
Expected investor returns

Timing/Plan B
Start of fundraising
Expected close
Cash in bank
Monthly cash burn

Plan B?
Triggers for Plan B
o be Completed

Amount
Targeted funding round ($K)

Milestones to achieve

Months of operations funded

Access
Targeted investors

Firm/Group Rationale Prosp. champion Source of referral

Risk management
Top five objections to invest Mitigating actions

Cost
Desired Pre-money valuation
Last Post-money valuation
Expected "step-up" for next fundraising

Comparable transactions
Company Date Valuation Comments
[1]
[2]
[3]
[4]
[5]
 3. Detailed Explanations

Term Details
This is the total of all benefits which a vendor promises to a customer in return for an associated payment (or other value-transfer) from the
Value Proposition1
customer. Essentially this can be stated as what the customer gets for what the customer pays.
In software development, a prototype is a simple working model of a product or information system. It is usually built for demonstration purposes
or as part of the development process. In hardware
Prototype Product2
design, a prototype is a "hand-built" model that represents a manufactured, yet easily replicable, product in sufficient detail for designers to visualize
and test the design.

Alpha Product3 These are both early versions of a software product that may not contain all of the features that are planned for the final version. Typically, software
goes through two stages of testing before it is considered finished. The first stage, called alpha testing, is often performed only by users within the
Beta Product3 organization developing the software. The second stage, called beta testing , generally involves a limited number of external users.

Commercial Product A product that is ready to be sold to the customer.

Operating cash flow is the cash that a company generates through the running its business. It is a measure of a business's profits and may be a better
Operating Cash Flow4 indicator than earnings because a company can show positive net earnings (on the income statement) and still not be able to pay its debts. It is cash
flow that pays the bills! One method for calculating operating cash flow is OCF = EBIT + Depreciation - Taxes

Potential market - those in the total population who have interest in acquiring the product.
Available market - those in the potential market who have enough money to buy the product.
Market Definitions5 Qualified available market - those in the available market who legally are permitted to buy the product.
Target market - the segment of the qualified available market that the firm has decided to serve (the served market).
Penetrated market - those in the target market who have purchased the product.
Sell your company to another company or personal buyer. Usually involves both a transfer of ownership and a transfer of operational control. When a
Sale6
company is sold, the role of the previous owners is usually negotiated along with the terms of the sale.
Initial Pubilc Offering - this is the first sale of stock by a private company to the public. While the IPO transfers ownership of the company, the
IPO6
management team in place before the IPO will typically still be in charge of the company post-IPO.
If you've raised $ from institutional investors lately, chances are good that you did so by issuing "Redeemable Preferred Shares". The "redeemable"
Redemption7 element means that your investors can redeem their shares for cash down the road. Redemption rights are very rarely exercised, but they can have
such a harsh effect on your balance sheet.
 A pre-money valuation is a term used in private equity or venture capital that refers to the valuation of a company or asset prior to an investment
or financing.
External investors, such as venture capitalists and angel investors will use a pre-money valuation to determine how much equity to demand in return
for their cash injection to an entrepreneur and his or her startup company. For example, if an investor makes a $10 million investment into a company
in return for 20% of the company's equity, the implied post-money valuation is $50 million. To calculate the pre-money valuation, the amount of the
Pre-money valuation8,9
investment is subtracted from the post-money valuation. In this case, the implied pre-money valuation is $40 million.
There are several ways to determine valuation for your startup. Know
that with most of these methods may be difficult to base on objective facts. At the end of the day you may need to rely on the fairness of your
investor to propose a valuation that is consistent with other known "comps" and also consistent with other relative valuations in his/her existing
portfolio.

Post-money valuation10
A post-money valuation is a term used in private equity or venture capital which refers to the valuation of a company or asset immediately after an
investment or financing. If an investor makes a $100 million investment in a company in return for 20% of the company's equity, the implied post-
money valuation is $500 million.
The time to think about your next round is right after you close financing. From the moment you start burning your capital you need to plan for the
next round. So, how do you
visualize your next round?

1. Determine your runway: How many months of cash do you have? Based on this plus the length of time it takes to raise a round, when do you
need to start pitching to potential investors? This will give you a time horizon for your visualization. If you need to be pitching investors 12 months
Expected "step-up" for next from now, this will be the planning horizon for the milestones you need to achieve to be investor-ready.
fundraising11
2. Prepare the pitch: Actually complete your investor deck as if you were raising that round today. Describe the story as if it were real today.

3. Go back in time: The last step is to work back from that future visualization and figure out the strategies and tactics you need to employ today to
make that picture of tomorrow a reality.
 References
1 http://en.wikipedia.org/wiki/Value_proposition
2 http://searchcio-midmarket.techtarget.com/sDefinition/0,,sid183_gci1000947,00.html
3 http://www.webopedia.com/TERM/a/alpha_version.htm
4 http://www.investopedia.com/terms/o/operatingcashflow.asp
5 http://www.netmba.com/marketing/market/definition/
6 http://www.inc.com/resources/startup/articles/20060301/tfaley.html
7 http://startupcfo.ca/
8 http://en.wikipedia.org/wiki/Pre-money_valuation
9 http://www.startupventuretoolbox.com/Valuation%20Advisor.htm
10 http://en.wikipedia.org/wiki/Post-money_valuation
11 http://startupcfo.ca/2008/04/visualize-your-next-financing-round.html