Tommy Shaughnessy

Tommy Shaughnessy

20-03-2022

21:08

Tips to Founders Raising Capital Delphi has invested in over 100 projects and has seen thousands (maybe tens of thousands), so I thought it would be worth sharing some tips for founders raising capital A thread in my opinion ๐Ÿงต

/1 First off, don't send a pitch deck. Send an MVP or a Demo. People want something to see and experience. It beats a deck every single time. If you're not there yet and are sending a pitch deck, hopefully the following helps a bit

/2 Before you build a deck remember that slides should be a TLDR. Your audience is a fund/DAO run by those with port cos, new deals, obligations and limited time. Instead, save the thoughtful deep answers for ๐Ÿ“ž's and telegram. Brevity is the soul of wit ๐Ÿ”ฎ

/3 Stories Sell ๐Ÿ“– They are memorable and your listeners can visualize your dream as you walk them from today, to a realized future Great teams are great storytellers If you can't tell you an engaging story, it's unlikely you will be able to convince the masses

/4 On Comps ๐Ÿ—บ๏ธ A team should have a clear understanding of any comps if they exist and their plans Building in a vacuum comes off as ignorant if a founding team isn't aware a comp has a better strategy and is further ahead Click - everyone has mentally checked out

/5 On Investors ๐Ÿ’ฐ Founders should have a reason to want a fund/DAO involved. They should have a clear idea on what specific value the fund/dao will bring their project and community Founders you are interviewing funds too, it's a two way street. You are getting married ๐Ÿ’

/6 The salesly, "we are closing in 24 hours" has to be the dumbest move in the world. First, this gives no time for either side to build a thesis or conviction needed during bear markets Second, in reality the deal will take weeks to close. Give a realistic timeline โŒ›๏ธ

/7 Remember to be very selective on your investors. Passive capital is likely NGMI in my opinion as money is cheap. Chose DAO like focused funds where the owners and builders are one in the same.

/8 One last pet peeve on investors, never tell someone that a fund has committed or is leading if they haven't agreed to, and agreed to let this be known publicly. If you get caught in a lie, click - the fund/dao is now again mentally checked out.

/9 On Deal Terms โœ’๏ธ Don't surprise on the token valuation. If you're giving an equity valuation, tell them the percentage of tokens that equity entity is getting so the fund/dao can back into the real FDV "Surprise! You're investing at 2x the val" - no one wants this at closing

/10 Vesting should align everyone at the virtual (thanks COVID) table and be realistic so stakeholders know the founding team won't irish exit 12-18 months vesting for a game that will take 5-10 years to deliver on - makes zero sense to everyone other than cash grab fans.

/11 On Legal Docs Make sure you pick a law firm that's next gen/tech and can deliver on what's market for crypto. Ask your potential lead investors if they can help draft docs for you that your outside legal can then review (to ensure you are protected as founders too!)

/12 For example, @lex_node and @SH_Brennan do this everyday for @Delphi_Digital's port cos and potential port cos. Check out LexDAO's repo A law firm whose name is 4 dead partners may not be the most cutting edge.

/13 Last on deal terms, know your exit. We are all building toward a community owned world where incentives allow anyone to build out a project and be rewarded If you mention an IPO on the phone, funds/DAOs will think you're calling in from 2002. An IPO rarely makes sense

/14 On Allocations ๐Ÿ’ต Be very thoughtful on your token cap table Giving everyone an allo gives an allo to no one Don't expect a fund/dao to do the work with a $25-$50k check Make sure you are getting what you need from a DAO, fund or angel, and they have an actual stake

/15 Team allocations matter immensely. Make sure you have enough not just for your current team, but a plan and buckets to incentivize the next phase of killer talent you need. The %'s can scale down as the project grows in $ terms, but plan for it.

/16 On The Tech Stack ๐Ÿ‘ฉโ€๐Ÿ’ป Teams should have strong reasoning for why they are building on a certain L1 or L2 beyond "they can give us money" and "the buzz is real" Money is cheap and the buzz is short lived If you're unsure and investigating that's fine, but be honest

/17 A key item is that stakeholders want to know what you have done in the last week and quarter. The space moves too fast to wait to build until a funding round closes. What technical work have you completed, where are you with your deligence? Share it.

/18 On Tokenecon ๐Ÿช™ At the pre-seed/seed stage full token econ does not have to be fully fleshed out. The keys are the product, GTM, value prop, community and team. As long as a team didn't shotgun give away all of its tokens too early, optionality to optimize exists

/19 Housekeeping Tips ๐Ÿงน Tip 1) Never dismiss an analyst or associate at a DAO/Fund. In next-gen funds, these people are specialists in certain areas and their opinions are well respected internally.

/20 Tip 2) Always be professional The space is small and you may end up working together on something at a later date. I once heard of a founder laughing at us for passing on a round, and I will likely never back them in the future.

/21 Tip 3) Keep the pitch deck to 10-15 slides If you can't convince sophisticated investors in an abbreviated manner, you won't be able to sell the world. Point those interested to other more in depth materials, white-papers, podcasts to learn post call.

/22 Tip 4) A team should have a clear strategy for building, growing and incentivizing a viral community. This isn't one podcast or a medium post. It's a clear strategy built on a foundation that will be interesting to the masses and stakeholders.

/23 Tip 5) No one wants a 30 min pitch on a 30 minute call You can tell people the meaning of life, they may tune out after 10 mins Do a 5-10 minute pitch, then get everyone engaged. Answer questions. Get Into it. Be energetic, be passionate. If not why are you doing this?

/24 Tip 6) Leave your audience with materials learn more on their own time (another reason for no 24 hour closes) and in their own learning style Offer up a podcast or YouTube video you did, a white paper, tweet storms or medium posts.

/25 Closing In closing, people's attention spans are shot so founder's optimize for TLDRs, captivating passionate stories, no surprise deal terms and thoughtful interactions. Founders, you are also interviewing. It's a two way street. Pick and incentivize the right daos/funds


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