Delphi has invested in over 100 projects and has seen over thousands, maybe even tens of thousands. On March 21, Delphi Digital co-founder Tom Shaughnessy shared some tips for project founders raising funds on Twitter.
1. First of all, don’t send the PPT of the project’s external introduction, but should send the most simplified feasible product (MVP) or demo.
People like to be able to see and experience something, much better than pure PPT.
If you have not yet reached the MVP or Demo stage, but are sending your project introduction PPT to investors, I hope the following content will help.
2. Before you create a PPT, keep in mind that a PPT should be a TLDR (Summary of Points).
You are dealing with a fund/DAO that has a lot of new funds on hand, needs to complete transaction tasks, and has limited time. The project introduction should be succinct, and remember to be well-thought-out for phone calls and telegram communications. Simplicity is the soul of wisdom.
3. Selling stories
Stories are impressive, and your audience can visualize your dreams as you take them from today to a fulfilled future. Great teams are great storytellers, and if you can’t tell a compelling story, you can’t convince the masses.
Teams should have a clear understanding of competitors (if they exist) and their plans. If the founding team does not know that a competitor has a better strategy and is ahead of schedule, it is considered ignorant to build a project out of thin air.
5. About investors
Founders should have a reason to want a fund/DAO to get involved. They should have a clear understanding of what specific value the fund/DAO will bring to their project and community. Founders are also screening funds, and it goes both ways.
6. Saying “we’ll close in 24 hours” from sales has to be the dumbest move in the world.
First, it leaves neither side time to build the arguments or beliefs needed during a bear market.
Second, the deal actually took weeks to close.
Give a more realistic timetable.
7. Remember to be very picky about your investors.
In my opinion, passive capital is likely to be NGMI because financing is easy. Choose funds such as DAOs that focus on areas where owners and builders have mutual interests.
8. A final note on investors
Never tell someone that a fund has committed or is leading an investment until they have agreed to participate or have agreed to go public.
9. About transaction terms
Don’t be surprised by token valuations. If you’re doing equity valuations, tell them the percentage of tokens that equity entities can get so that the fund/DAO can go back to the real FDV.
“Surprise! Your investment is at 2x valuation” – no one wants to hear this near the end of the investment.
10. Token vesting (Vesting) should make everyone consistent and realistic, so that stakeholders know that the founding team will not quit.
A game that takes 5 to 10 years to complete has a Vesting time of 12 to 18 months – which doesn’t make sense to everyone but short-term speculators.
11. About legal documents
Make sure the law firm you choose is professional and can serve the crypto market.
Ask your potential lead investors if they can help you with the drafting of the documents, which your outside laws can then review (to make sure you’re protected as a founder too!)
12. Give an example
Delphi legal counsel @lex_node and @SH_Brennan do this every day.
For details, see LexDAO’s codebase
13. The last one about transaction terms, know your exit method.
We’re all building a community-owned world where incentives allow anyone to build a project and get rewarded.
If you mention the IPO on the call, the fund/DAO will think you’re calling from 2002. IPOs basically don’t work.
14. About distribution
Be thoughtful on your token distribution table. Who will be given a portion of Token and who will not be given.
Don’t expect the fund/DAO to do the job with a $25-50k check.
Make sure you get what you need from a DAO, fund or angel investor and they have an actual share.
15. Team assignment is very important
Make sure you not only have enough resources for your current team, but you also need to have a plan in place to incentivize the killer talent needed for the next phase.
The batch size can be scaled down as the project grows in dollar terms, but plan accordingly.
16. Technology stack
Aside from “they can give us money” and “the excitement is real”, teams should have good reasons why they are building on a certain L1 or L2.
The money came quickly, but the excitement was short-lived. If you’re not sure then investigate, that’s fine, but be honest.
17. A key point is that stakeholders want to know what you did last week and last quarter.
The crypto space is growing so fast that investors can’t wait until after a funding round to start building.
What technical work you have done, tell investors where your efforts are.
18. About Token Economics
In the pre-seed/seed stage, full token economics do not have to be fully done.
The key is the product, the GTM (go-to-market strategy), the value proposition, the community and the team.
As long as the team does not give up all tokens prematurely, there is an optimal choice.
19. Recommendation 1
Don’t ignore the analyst or partner of the DAO/fund.
In the Next Generation Fund, these people are experts in certain fields, and their opinions are respected internally.
20. Recommendation 2
Always be professional. The crypto industry is small and you may work together later on.
I once heard a founder laugh at us for dropping an investment round and I may never back them in the future.
21. Recommendation 3
Keep your project presentation PPT to 10-15 slides.
You can’t sell to the world if you can’t convince sophisticated investors in a simple way.
Point interested parties to other, more in-depth material, such as white papers, podcasts, to see what’s going on after the call.
22. Recommendation 4
A team should have a clear strategy for building, developing and motivating a community.
This isn’t just a podcast or a Medium article.
This is a clear strategy based on public and stakeholder interest.
23. Recommendation 5
No one wants to hear 30 minutes of publicity on a 30-minute call.
You can tell people the meaning of life and they might cut the phone in 10 minutes.
Give a 5-10 minute presentation and get everyone involved. Answer questions.
Have energy, have passion. If not, why are you doing this?
24. Recommendation 6
Let your audience learn more in their own time and in their own way of learning.
Provide podcasts or YouTube videos, white papers, tweets, or blog posts you’ve made.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/delphi-co-founder-what-are-the-considerations-for-web3-financing/
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