Banking on the Wrongs - A Guide to the Anti-Millennial Funding Craze

10 Myths of Raising Money
Banking on the Wrongs
A Guide to the Anti-Mil ennial Funding Craze
Tony Greenberg, CEO:
RampRate and DeepStrat
tony@ramprate.com
(c) 2011 RampRateTM
Slide 1

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Myth 1: Investors Buy Ideas
Your business wil change 7 times before it's successful
Investors invest in the ability to swerve
* Not ideas, enterpreneurs
With an "s" - plural
* Not you, a team
Tip: Be creative, the investor wants you OUT
(c) 2011 RampRateTM
Slide 2

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Myth 2: A Business Plan is Worthless
Business fundamentals wil never be replaced with a sexy deck
* Your dream is a delusion to investors until proven otherwise
Tip: Start with the vision of success, and work backwards
(c) 2011 RampRateTM
Slide 3

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Myth 3: Board / Advisors Are Just Names
Advisors are your sponsors, henchmen, and guardian angels
* Key resource from founding to funding to exit
* Incentives should be tied 50% to time 50% to milestones
Tip: 1 finance,1 marketing,1 vertical, 1 tech 1 attorney
(c) 2011 RampRateTM
Slide 4

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Myth 4: Market Size is Critical
Market size is bush league
* What real y matters is addressable market
2 types of addressability:
* New widget: create / expand market
* Improved widget: steal market share
Tip: Obtain research and do your math
(c) 2011 RampRateTM
Slide 5

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Myth 5: If I Could Just Raise This Angel...
Financing accompanies, but does not equal success
* Banks lend money to businesses that can repay debt
* Angels invest where they KNOW they wil get a return
* Venture finances upfront cost, e.g. software and hardware build
* Stupid money is out there, but you can't run with it
Tip: Aim for a successful business, not just funding
(c) 2011 RampRateTM
Slide 6

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Myth 6: The Odds of Success Are Good
Expect to fail
* Overconfidence is why you're here - it's the defining
cognitive bias of entrepreneurs
* But there are 100 people building what your dream is
* Of those, 10 have better relationships / team, more exits
Tip: More perspiration than inspiration
(c) 2011 RampRateTM
Slide 7

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Myth 7: Top Failure is Undercapitalization
Capital wil not compensate for lack of revenue / margin
Conversely, lack of capital spurs ingenuity
*EUREKA moments often come when you run out of money
Tip: If you aren't getting traction, shift fast
(c) 2011 RampRateTM
Slide 8

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Myth 8: Smarter People Succeed Easier
Being smart is more than IQ
* Listen, surround yourself with smart people, and organize them
into teams of innovation.
The world is laced with dumb mil ionaires
Tip: Learn your strengths and just use them
(c) 2011 RampRateTM
Slide 9

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Myth 9: Time for Measuring Is Better Spent Doing
That which can't be measured can't be improved.
* Lack of milestones and metrics is a key red flag for investors
* Result: cram downs, mistrust, and being replaced by businesspeople
Tip: Over-communicate, under-promise and over-deliver
* And don't forget to fil in Phase 2
(c) 2011 RampRateTM
Slide 10

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