Third Party Event Fundraising Process: Fill & Download for Free

Over my first five years as a VC I wrote a handbook designed to help entrepreneurs raise capital. The book is called The Fundraising Rules, Mark Peter Davis - Amazon.com. I cover these two questions (what is VC? and how to raise from them?) in the book. Here are some bits on each question:1) How does venture capital work?Venture Capital is private capital that is invested in high-growth companies in exchange for equity. Private capital includes the capital of high-net-worth individuals and institutional investors such as pensions, endowments and other highly capitalized organizations. Broadly speaking, the term venture capital includes angel investors, but casually, the phrase venture capital is only applied to institutions that are primarily investing the capital of a third party.VCs generally make investments with the objective of generating significant returns that will be realized when the company’s stock is liquidated through an exit, such as an acquisition of the company or an initial public offering. There are some exceptions to this, however, as 1) venture groups within corporations often invest with the objective of generating both returns and creating strategic value for their parent company, and 2) socially responsible venture firms seek to bundle returns with social benefit.Venture capital funds are managed by one or more individuals who invest on behalf of the investors mentioned above. The investors that provide capital to venture capital funds are called Limited Partners and the day-to-day managers of the capital are called General Partners. These General Partners identify and select investment opportunities, negotiate the deal terms, often join the boards of directors of their portfolio companies and assist portfolio companies through development.Every time VCs make an investment, they believe the company they are backing will generate a healthy return. In reality, that’s not the case.Even the most successful early-stage investors experience failure rates in their portfolios, which are probably surprising to people not familiar with the business. A rule of thumb for top-performing investors is that one third of their investments will “go to zero,” one third will return the invested capital and one third will provide a five to tenfold return. Furthermore, in the early-stage model, the few companies that return 10 times or more on invested capital provide the vast majority of the fund’s total return to its investors (who are called limited partners).This reality has implications for entrepreneurs who are raising an early round of venture capital. First, you need to convince investors that your company can generate a big return, since VCs need to make every investment with the belief that it will do so. Second, you should expect the market valuation for your company to be lower than initial intuition tells you. Since two-thirds of the companies which receive venture investments generate mediocre returns for early stage investors, investors likely perceive the riskiness of your venture to be higher than you will.2) How do you raise capital?There's a lot to this question. It takes me a few hundred pages to address most of it in The Fundraising Rules. Here are some key insights:1) Prepare your fundraising materials:The Three Key Fundraising DocumentsThere are a number of materials that you may need to provide to an investor during the course of the fundraising process. Three of these documents, however, are ones that nearly every investor will want to see, as they each play a critical role in the process of engaging the investor.Executive SummaryThe executive summary provides a very concise overview of your company, only including enough information to get the meeting. This document will not likely be used again with a particular investor once he or she is engaged.PowerPoint PresentationThe PowerPoint presentation is a document you will use in numerous meetings with a given investor to describe your business in enough depth to get the investor interested in learning more. This document alone will not provide the investor with enough information to make a decision to invest, but it should provide an overview of the key facets of your business that will motivate him or her to dive deeper.Note that some folks elect to use their presentation as an executive summary as well. In my opinion, it’s better to have a separate Word document to get the first meeting.The Operational Financial ModelAfter you have piqued the interest of venture capitalists, they will request a variety of diligence materials. One universal diligence item that will be included in that list is your financial model, an Excel document that quantitatively illustrates how you anticipate the business evolving. This model should provide investors with more than your financial projections – it should also illustrate how your operations evolve (e.g., when you plan to hire people and when you plan to spend money on marketing) enabling investors to understand the mechanics of the business. In sum, this document will explain how you plan to build the company.2) How to get the meeting:Why an Executive SummaryYour first submission to a VC should be an executive summary, not a complete business plan. A complete business plan attempts to tell a VC everything there is to know about your company. At this stage in the process there are too many other plans being submitted; VCs do not have time to learn everything about every company.In this early part of the review process, VCs are not trying to decide whether or not they will invest in a company; VCs are just trying to figure out if there is a possibility that they will invest, given the high-level characteristics of the business. Since there are a lot of these submissions to review, they need to quickly decide if they want to learn more or pass.As a result, entrepreneurs should aim to work within this process by submitting a clear and concise executive summary (as described previously in the Preparing Your Materials chapter). The purpose of an executive summary is to get the first meeting. Don't try to rush the process. Focus constantly on getting to the next level.Submitting Your Executive SummaryThe first step in the meeting process is submitting your executive summary. There are lots of ways to submit your executive summary: cold channels (e.g., cold email or cold LinkedIn introduction), through introducing yourself to a VC at a networking event or through a third party introduction (e.g., a lawyer or mutual contact). While the VC is likely to read your executive summary and respond in any scenario, the plan can be at a disadvantage if it comes from a less familiar source.When a VC receives an executive summary from a trusted source (e.g., someone who has sent good deals to them before), they expect the idea to have gone through another filter before it was sent to them; they expect the idea to be better. These will therefore receive more attention.With this in mind, savvy entrepreneurs generally try to have their business plans submitted through a mutual contact. Knowing that savvy entrepreneurs understand this bias makes VCs even more predisposed to favor submissions from familiar sources, since the entrepreneurs who are also good at networking (which is a determinant of success for companies that require partners or business customers) will find a way to network their way to a VC. Finding a way to submit through a mutual contact has become the VC's first way of assessing management.Submitting your plan is the first step in the fundraising process and therefore it is also your first impression. It's important to understand that VCs appreciate an entrepreneur's ability to create a warm introduction – you should try to do this if you can. However, if you really don't have a viable way for making that happen, don't hesitate to get your business plan in through a cold channel. A first impression does not trump a good idea.There's a lot more on this topic, but I hope that helps.

Under current Winner-Take-All and First-Past-The-Post rules, the latter situation - replacement of a party - is far more likely.Neither is all that likely, however.America has had six party systems[1], so five major realignments, and I personally believe we’re currently in the middle of a sixth, given the large constituency swaps we’ve seen in the last few years.The first two realignments each saw a collapse of a major party: first the Federalists, and then the Whigs. The third saw a minor collapse of Republican hegemony birthing the Progressive Party, and the fourth the Progressives’ own collapse, nearly 100 years ago now.Since then, we have had two (well, okay, one and a half) realignments without major-party collapses. Why? It’s because of changes that happened in the Fourth Party System.Primary elections relieved the pressure from both internal dissent and external competition.The victors of the fourth realignment consolidated their fundraising apparatuses and tightened state election laws to make third-party challenges less viable.Primaries also made the victors more efficient at ideologically co-opting and integrating new movements before they had the chance to coalesce into actual parties.It was these changes that brought down the Progressives by making them more susceptible to WTA and FPTP. They simply didn’t have the party infrastructure to compete.Over the Fifth and Sixth Party Systems, the two major parties perfected these processes, and settled into a stable dynamic of “wedge politics”: a constant battle to find single issues that voters feel strongly about, and use them to peel voters off from their opponents’ base of support.The result has been that all realignments since have happened collapselessly. In each, constituency swaps have played out slowly over the course of decades, in a repeating cycle:Party A discovers an unusually effective wedge position. They play it to their advantage, and win an election.Due to its success, the wedge position becomes normalized as part of the Party A platform. This upsets a bloc of voters elsewhere in the coalition.Party B seizes on the opportunity, using the opposite position of the original wedge to attract disaffected voters from Party A. Rinse, wash, repeat.At this point, the two major parties have normalized enough former wedge positions that it’s really hard to find new wedges without committing some major apostasy. These normalized issues keep most voters loyal to their party, even if they’d prefer an alternative. New wedges mainly arise from developments in “facts on the ground”: a war happens, spiking off an immigration crisis, or a new technology upends an old industry, etc.What this means is that the wedges in most cycles aren’t significant enough (rarely more than 5%) to destabilize an entire coalition within the span of one or two elections. The parties don’t collapse, they churn. What’s more, while you’d think that a really big event might be able to destabilize a party, it turns out that the stronger a wedge is, the more likely it is to be offset by the counter-defections from Step 3.In this way, the parties don’t have to collapse for a realignment to occur anymore.Observing how institutionalized this whole process has become in America (what people often decry as “politics as usual”), the only real way for a third party to break through would be to change the election rules to make them more viable. Short of that, it’s exceedingly unlikely that any development could destabilize either party.Footnotes[1] Political parties in the United States - Wikipedia

Blockchain technology is, beyond question, one of the hottest topics among entrepreneurs worldwide. While it was initially outlined for cryptocurrencies, it has quickly evolved into something of greater significance. Employed in several areas and industries, blockchain tech is successfully opening doors for small, medium, and large businesses.Secure and Efficient Storage of DataIt's no secret that entrepreneurs need to have easy access to their data anytime and anywhere. Therefore, most of the times, they use cloud platforms. As awesome as this is, it still makes startups depend on a third-party, which is a solid concern when we're talking about highly-confidential data. Well, blockchains manage to make the cloud storage decentralized - meaning that no one can delete or manipulate data. Hallelujah, right? This increases the data security and efficiency, as well as cuts down reliance on third parties.Entirely Automated Legal AgreementsEntrepreneurs are certainly familiar with agreements and contracts being delayed due to signatures, approvals, or dependence on lawyers. Frustrating, right? Luckily, several blockchain applications are now successfully replacing or augmenting lawyers, thus allowing startups to manage the legal agreement process entirely automatically. These smart contracts get entrepreneurs rid of the annoying delays, facilitating businesses with well-established terms and clients engage faster and easier.Fundraising EfficientlyStartups are always doing things at a fast pace. And the fundraising process is renowned to be one of the key frictions points in building a company; yet, it tends to become very time, resource, effort, and money consuming. The traditional fundraising journey of venture capitalists can take precious months of traveling, emailing, meetings, events, and so on before you get tangible results. This slows down the high speed required to be established in the market.With blockchain self-verifying systems, this entire process is accelerated by letting venture companies send funds right after they've made the investment decision. It's just a matter of minutes and helps reduce the friction amount in the fundraising funnel as well as speed up all the related actions.No More Time-consuming Background ChecksBefore getting into a new business relationship, entrepreneurs have to check the other party's background in order to verify trust. This also applies to market investors. We're again talking about a lengthy process that requires a bunch of time, numerous contacts, and substantial efforts.Blockchain technology can be used in the process of identity authentication. Verifying previous work positions, job responsibilities, birth certificates, and other mundane (but critical) things makes the entire check easier, saving startups a considerable amount of time.Enhanced Capital AccessFinancing their project by raising capital is a huge step for entrepreneurs worldwide. However, in many parts of the Globe, this mechanism is not as easy as entrepreneurs wish. Hidden costs of traditional loans, limited access to modern tools, and certain restrictions are just some of the issues in this scenario.Here is where blockchains can help by giving startup owners the chance of accessing funds not only from their countries but also from different parts of the world. Bitcoin and other digital currencies don't depend on location; hence no hidden exchange amounts are involved. Basically, when transferring cryptocurrencies, no restrictions and international fees are applied. This creates an equal funding opportunity for most entrepreneurs.Improved Supply Chain VerificationWhen it comes to a startup's supply chain, owners often know the vendor they are buying from, but not the vendor's suppliers. This can be a problem when the product fails and the entrepreneurs can't identify the exact culprit.By easy, quick scanning and spotting the point where the issue occurred, blockchain technology helps businesses be aware of aspects such as ethical (or unethical) sourcing, avoid counterfeit items, or make sure that the products and services delivered to customers are meeting all the promises, requirements, and expectations. This is great for all organizations, especially those that are not well-established in the market yet and must build a trustworthy relationship with their customers. Understanding these factors is vital for preventing a negative impact, exposing uncertainties, and empowering businesses.Breaking the Entry BarrierAnother awesome way how blockchain technology helps entrepreneurs and businesses is by creating online marketplaces where transactions are transparent and there's no monopoly control over data access and price. Therefore, competition in the market is increased and the barrier for businesses' entry significantly lowered down. The greatest thing about it is that it leads to the emergence of more novel products and services.Blockchain technology enjoys an ongoing evolution. More and more entrepreneurs start learning about it and familiarize themselves with the way it can help their businesses. Undoubtedly, this innovative technology is allowing both startups and big organizations grow, easing their way to success.You can hire freelance blockchain developers at sites like Giggrabbers, Upwork, and Toptal.