Friday, August 30, 2024

The Capital Raising process for Venture Capital



Am excited to be going on the VC journey with referron - am starting to look for a factory to make more customers happy !! 

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 (Go to  www.referron.com.au to download and have a play - it’s free  )

  
Michael Ho focuses on 3 main milestones when describing the Capital Raising process for Venture Capital


1️⃣ Find something that works

2️⃣ Do it more often (and keep getting better)

3️⃣ Then keep finding more things that work 💪



1️⃣ Find something that works


Pre- Seed  funding - EXPERIMENTS

Find a problem worth solving  and  find a solution that’ll deliver value - not a solution that is just a vitamin - a solution that is a painkiller!!


→ this is your pre-seed use of funds


Seed funding - PROBLEM SOLUTION FIT 


You’re often left with a bunch of things that 'almost' work.


So you’re looking for a model with a set of features - that will solve that problem  that is repeatable and scalable  - that will make your customers happy! 


And now that you can prove happy customers...

you build a factory to find more happy customers


→ which is your seed use of funds



2️⃣ Do it more often (and keep getting better)


Series A - GO TO MARKET FIT


Now happy customers don't bring venture scale


So you’ll need to run different gtm experiments until you find a repeatable & scalable motion that works


→ and this will usually unlock your series A round - which will allow you to spend $10M to add $10M plus in net new (logo) revenues in less than 24 months

→ which is your series A use of funds

→ and the definition of early venture scale


Series B - SCALE MARKET FIT


Execute and stay on the venture scale path

→ which will usually unlock your series B



3️⃣ Then keep finding more things that work 💪


Series C, D E and F. - PRODUCT MARKET FIT 


You have de-risked and starting to  scale - making acquisitions to fit your customers needs 

→ which is your series B use of funds (part 2)

to get to $40M, then $80M and past $100M in revenues  to your Unicorn 🦄 


Onwards and upwards

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