Pensare Series B Fundraising

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Pensare Series B Fundraising

• Doug Donzelli doug_at_pensare.com
• President CEOfor now www.pensare.com

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Agenda

• Startup Observations
• Situation Analysis
• Measures
• Alternatives
• Epilogue

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Startup ObservationsThe startup life

• is odd
• Colleague founds a 1b market cap company,
  declares himself an apostle, ousted the next day
• Employee brings five foot sword to company party
  and reveals spiritual link to Renaissance era
• is dramatic
• MegaCorp declares Company1 to be on hit-list
  and advises prospective investors to avoid
  certain losses
• Lose largest customer and must decide between
  layoff 8 days before or immediately after
  Christmas break

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Startup ObservationsThe startup life

• is illogical
• First company receives three acquisition offers,
  none is within 35 of any other
• Company purchased for 7X revenue, five weeks
  before running out of cash
• is rewarding
• Run a company at 26, run product development at
  fastest growing company (Fortune 94 95),
  create a dozen millionaires, have fun

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Situation Analysis

• Chairman, CEO, President of 35 employee team
• 300K cash burn 3 months available cash
• Recent return from 2 month hiatus
• 30 firms approached, 17 uneducated declines, 4
  educated declines, 9 interested firms, no
  offers on table
• Venture perception high stake opportunity, low
  probability of success, validated management
  team

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Measures

• Shareholder ROI
• Higher valuation is better, but not too high
• Watch for strings attached
• Syndicate Diversity
• Dispersed board power versus board manageability
• Series C Fund Size
• Deep pockets for Series C
• IPO Credibility
• Track record of success

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Measures

• Round Timeliness Likelihood
• Probability of close declines over time
• Fundraising is boring and damaging to Company
• CEO Acceptability
• Want 1-2 get out of jail cards
• Strategic Value
• Important connections to key customers partners

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Alternatives
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One Walk

• Likely return calculation
• If likely return lt 3m, walk
• If likely return 3m-5m, consider
• Disadvantages
• Limit future alternatives
• 35 jobs in jeopardy

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Two Insider Round

• Current investors kick in
• Advantage Shareholder ROI, Timeliness
• Disadvantages
• Most everything else
• Series C

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Three Bridge Wait it Out

• Current investors kick in bridge capital
• Continue to work current prospects
• Advantages
• Safe short-term play
• Expect money to come eventually
• Disadvantages timeliness close probability

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Four Bluff current prospects

• Current prospects
• GE Capital
• Kleiner Perkins
• Battery Ventures
• East West Capital
• Bluff -gt bridge -gt inside -gt walk
• Bluff weakest prospect and leverage stronger
  players
• If it works, great. If not...

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Alternatives
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Epilogue