【NY Startup Lesson】Entrepreneurship Course 6: Fundraising, Valuation, and Pitching

This year, i2i has partnered with American accelerator EntreCamp to launch the 2024 IP2 Scale Out Program in New York. This initiative aims to help promising Taiwanese startups participate in a six-week, all-English expert course.

Instructor

Terry Hsiao

Course 6: Fundraising, Valuation, and Pitching

Summary

In this final session of the EntreCamp online course, our lecturers, Terry and Tina, guided the class through a comprehensive discussion on the critical topics of fundraising and pitching for startups.

The session began with a detailed exploration of the dos and don’ts of fundraising. Following this, the lecturers provided an in-depth explanation of commonly used investment methods, such as convertible notes and SAFEs.

Additionally, they discussed various approaches startups can use to calculate a reasonable valuation. In the latter part of the course, practical pitching tips were covered, with Tina sharing the strategies she employed to navigate the fundraising process.

Course Outline

Startup Fundraising

• Lifestyle businesses primarily focus on generating profit. In contrast, scalable startups emphasize achieving high growth rates and expanding market share more.

• There’s no need to approach VCs if you’re not aiming to become a unicorn.

• Know the VCs you’re approaching. They have specific investment terms and strategies.

• Before starting fundraising, prioritize building your Unique Value Proposition (UVP).

• Maintain a “clean cap table.”

• One of the investment methods is through convertible notes or SAFEs.

• When determining how much funding to raise, base your estimate on the question: “How much money do you need to achieve your goals?”

Valuation

• There are various methods companies can use to calculate their valuation, as explained below.

• Replacement Method: This method considers how much money it would take for someone to replace your business.

• Market Multiple Method: This is a commonly used approach. However, it’s crucial to use the correct multiplier that fits your industry.

• Discounted Cashflow Method: this method is suitable for companies with predictable cash flows.

Pitching Skills

• Allow Time for Q&A.

• Focus on Content Over Creativity.

• Always start with your Cs.

• Continuously Improve Your Pitch Deck.

• Avoid Discussing Exit Strategies.