1 Cambridge Judge Business School Raising financial capital Simon Stockley Senior Teaching Faculty in Entrepreneurship
2 Objectives: Planning your funding strategy key questions Appropriate funding sources Cash burn rate - the Valley of Death Valuing new ventures Structuring equity investments Sources of equity Venture Capital Debt finance
3 The bootstrapper s mantra. Never buy new what can be bought second-hand Never buy what can be rented Never rent what can be borrowed Never borrow what can be begged Never beg what can be salvaged
4 The difference between species Venture Capitalist Corporate Banker Both are dangerous, but at least VCs are predictable
5 Planning your funding strategy - ten key questions: i. How much do you need? ii. iii. iv. When do you need it? How long will it take to raise the money? How long will it last? v. What will it be used for? vi. vii. viii. ix. What type of money do you need? From whom will you raise it? How expensive is the money? How and when do you plan to repay it? x. Is the business actually fundable?
6 Additional factors to consider when raising money 1. The type of business you are starting affects the type of financial capital you can access 2. What stage of development your business is at and how soon you are likely to generate sales revenue affects 3. The perceived risks determine the returns expected by financiers 4. Your attitude towards sharing ownership and control 5. Your bargaining power relative to the providers of capital If you cannot convince an investor that they will get six to ten times their money back after 5 years they are VERY unlikely to invest
7 Debt vs. Equity Key Features: Equity Debt Dilution of ownership Cost of money Time taken to raise money Cost associated with raising money Available to lifestyle businesses Disadvantage for founders Advantage for founders Paid back if business fails Smart money Requires regular repayments Can be raised pre-revenue Security taken over assets Directors guarantees required Increases fixed costs and BEP
8 Who assumes the risk? Equity invested by business angels Risk Risk Angel Founders Perform due diligence Require warranties from founders Require founders to invest their own money Funds released in stages based on the achievement of agreed milestones Money borrowed from a bank Only lend to established businesses with sales revenue Take security (a legal right to sell) against the assets of the business Insist on personal guarantees from the Directors of the business Sometimes use the Enterprise Finance Guarantee Scheme (EFGS)
9 Perceived risk must be balanced by returns Risks - (MMIST) Management will the team fall apart, can they execute? Market - is there a growing market, will customers buy? Industry - will competitors kill you, do you have a protectable advantage? Supply chain - will suppliers and distributors deal with you and on what terms? Technology - does it work, can you make it work, how much will this cost? Risk Risk Risk Prerevenue start up Start up with growing revenues Established business with growing revenues Retur n 45-60% IRR + Return 30-45% IRR Return 20-30% IRR
10 Risk and cost of equity capital + Seed 1 st Round 2 nd Round Growth capital 60% IRR % IRR 30-40% IRR 20-30% IRR Cash flow Valley of death Promised land Time _ RISK
12 Health Warning Do not try to finance your business with debt until you have reliable cash flow from sales
13 Early Stage Funding Options Initial Ideas Feasibility Prototyping Commercialisation Own savings, earned income, friends & family, Grants (TSB, EU, Regional), Accelerators Start-up loan scheme Equity crowd funds, Seed funds (SEIS) Business Angels Until you have a workable business model your options are extremely limited especially without secure IP Venture Capital Bank Loans Real Sales!
14 Financing the journey to the promised land + Break even point (Avg. 36 months) Promised land Bank balances $ 0 Cash break even point (Avg. 60 months) Time _ Valley of death Amount of external finance required
15 Different Firms, Different Profiles Technology firm Large investment required Late break-even Huge upside (Microsoft) Bank balance Time Consulting firm Low investment required Early break-even Modest upside
16 A guaranteed method for putting off investors! We have a virtually risk free investment opportunity offering HUGE returns..! + ve Bank balance 0 - ve We are going to build the next Facebook, all we need is 100,000! Valley of death (risk) Promised land (return) Time What you re actually communicating: We are un-investable because we haven t got a clue what we re doing!
17 A typical lean start up cash flow profile Customer creation and growth can consume a huge amount of cash + ve Bank balance 0 Break even Time - ve Customer discovery Customer validation Customer creation Growing the business
18 Filling the Valley of Death + ve Founders funds Bank balance 0 - ve Grant Equity crowd funding Valley of death Angel syndicate Promised land Time
19 Your relative bargaining power when raising money from equity investors Your relative bargaining power High Med/High Medium Low 100,000 for a 20% equity stake Pre-money valuation = 400,000 Assuming you sell the business for 4.0m in five years time: Selling 20% leaves 3.2m Selling 30% leaves 2.8m Selling 50% leaves 2.0m 100,000 for a 30% equity stake Pre-money valuation = 233,330 7 months cost you 1.2m! 100,000 for a 50% equity stake Pre-money valuation = 100,000 Zero 12 months 9 months 6 months 3 months Out of cash Cash reserves in bank
20 How long does it take to raise money? Venture capital 12 to 18 months Angel equity 6 to 9 months Crowd funding 3 to 6 months Bank debt 2 months Off Balance Sheet finance 1 month It always takes longer than you anticipate!!
21 Cambridge Judge Business School Valuation Simon Stockley Senior Teaching Faculty in Entrepreneurship
22 The VC valuation method Most Angels and VCs wish to exit after 5 years (the target year) The internal rate of return required (discount rate) will depend on the level of perceived risk. Let s call it 45% The multiple (M) of the investment required by the investor is simply calculated as follows: the target year M = (1 + internal rate of return) Thus M = ( ) 5 = 6.41
23 The capital return (CR) is simply the multiple (M) times the original investment (I). Lets call I 1.1m giving us: CR = 6.41 x 1.1 = 7.05m The percentage ownership (PO) expected by the investor will be: PO = Capital Return Market Valuation (in target year) X 100% Our task is now to estimate a market value (MV) in year 5 (the target year). The most common way of doing this is to use the *price to earnings ratio (PE) for comparative firms. Thus: Market value = PE x projected earnings in target year (NPBIT) *Note: PE ratio = share price/earnings per share (EPS = NPBIT/number of shares)
24 Let s assume that the PE ratio for similar quoted firms is 26 and that projected NPBIT in year 5 is 1m The unadjusted Market Value in year 5 is thus 26 x 1.0m = 26.0m The required percentage ownership is, therefore: X 100% = 27.1% In practice, however, the PE of quoted companies may be subject to a discount by the investor. This can easily amount to 30% but is a matter for negotiation.thus: PE (adjusted) = PE (PE x discount rate) So PE (adjusted) = 26 (26 x 0.30) = 18.20
25 Thus, if a discount rate of 30% is applied the percentage ownership required rises: X 100% = 38.7% Therefore, it is in your interests to persuade the investor that: 1. The risks (managerial, market, industry and technological) are low so that the required annual rate of return (which reflects financial risk) can be reduced 2. That earnings in the target year are realistic so as to avoid too heavy a discount 3. That the PE ratio is indeed comparable.
26 What does your business have that justifies your pre-money valuation? Rapid traction and (better still) real sales Investors understand that success is 1% inspiration and 99% effort Investors respect passionate, focussed and hard working teams that deliver tangible results quickly... 80% Action 20% Analysis (unlike Business School) Your past and present achievements (e.g. tangible business results) count for more than wishful thinking. The value of your business is what someone is prepared to pay!
27 Building Enterprise Value Enterprise valuation ( ) Business with a patent Value adding activities Grant funding obtained Patent Founding team recruited Proof of concept Prototype (MVP) Strategic alliances & partnerships Proof of market Beta test Early customer traction Seed funding obtained Adoption by reference customer First round investment Sales growth Lifestyle business 0 Time 1. In the absence of defensible IP a business idea has no value 2. Understand precisely what adds value from the POV of an investor 3. Spend your time working on these things!
28 The investment lifecycle of a start-up Angel Angel + Equity crowd fund Angel + Equity crowd fund + Venture Capital Founders? Seed 1 st Round 2 nd Round Exit..? Time
29 Cambridge Judge Business School Structuring equity investments Simon Stockley Senior Teaching Faculty in Entrepreneurship
30 Structuring the deal: The business was founded in 2005 with shares split between Liz (7000) and Simon (3000) At this point we do not know the value of these shares After 18 months an investor, Bob, offers to invest 18,000 in return for a 45% equity stake in the business. Stage 1. The first step is to calculate the pre-money valuation (its value before the investment is made): Pre-Money Value = (Amount of investment/equity stake) amount of investment So: Nosh Ltd. ( 18,000 / 0.45) - 18,000 = 22,000 The share price (or value) of an unquoted company is only known at the time the deal is done
31 Stage 2. We now need to calculate the value of each share which is simply: Pre-money valuation/number of shares. So, 22,000/10000 = 2.20 Note: The share price (or value) of an unquoted company is only known at the time the deal is done You need to understand that equity investments are negotiated in percentages (e.g. 45% for 18,000) but structured using shares. When a business raises money by selling equity it issues new shares to the investor. The investor does not take a proportion of the shares that already exist (e.g. 45% of 10,000 shares) Stage 3. Calculate the number of new shares to be issued. The deal share price is 2.20 and 18,000 is being invested. The number of new shares will, therefore be: 18,000/ 2.20 = 8182 The total number of shares is now 10, = 18182
32 Post-money = 40,000 Pre-money = 22,000 Liz Simon Bob Liz Simon 30% 45% 38% 70% 17% In summary: 1.Calculate the pre-money valuation 2. Calculate the deal share price by dividing the premoney valuation by the number of shares 3. Determine the number of new shares to be issued by dividing the investment amount by the deal share price.
33 Second round investment In early 2009 Liz, Simon and Bob agreed to sell 30% of the equity in Nosh to Johnston Press for 165,000 Structuring the deal: Stage 1. Calculate the pre-money valuation (its value before the investment is made): Pre-Money Value = (Amount of investment/equity stake) amount of investment So: ( 165,000 / 0.30) - 165,000 = 385,000 Stage 2. Calculate the deal share price Pre-Money Value /number of shares = 385,000/18182 Deal share price is therefore 21.17
34 Stage 3. Calculate the number of new shares to be issued Investment amount/deal share price = 165,000/21.17 Number of shares issued to Johnston Press = % 27% 30% 45% 38% 12% 70% 17% 31% Liz Simon Liz Simon Bob Liz Simon Bob Johnston Press 22,000 40, ,000 Bob is happy because his 18,000 is now worth 170,500 even though his ownership share has been diluted from 45% to 31%
35 A Bad Second round investment Down Round In early 2009 Liz, Simon and Bob agreed to sell 30% of the equity in Nosh to Johnston Press for 15,000. They are not happy about this but they have no choice, without the investment the business will become insolvent. Structuring the deal: Stage 1. Calculate the pre-money valuation (its value before the investment is made): Pre-Money Value = (Amount of investment/equity stake) amount of investment So: ( 15,000 / 0.30) - 15,000 = 35,000 Stage 2. Calculate the deal share price Pre-Money Value /number of shares = 35,000/18182 Deal share price is therefore 1.92 (Down from 2.20)
36 Stage 3. Calculate the number of new shares to be issued Investment amount/deal share price = 15,000/1.92 Number of shares issued to Johnston Press = 7792 Bob has protected himself with a full-ratchet anti-dilution clause...! He will be fully compensated for his loss by the re-allocation of shares from Liz and Simon Stage 1: Calculate the financial loss to Bob 8182 x ( ) = 2250
37 Stage 2: Calculate the number of shares required to compensate him 2250 / 1.92 = 1169 Stage 3: Calculate the number of shares reallocated from Liz and Simon Liz = 1169 x 0.7 = 818 Simon = 1169 x 0.3 = 351 Stage 4: Calculate the new ownership percentages Liz = % Simon = % Bob ( ) = % Johnston Press % The value of Bob s original investment ( 18,000) has been maintained...
38 Cambridge Judge Business School Early stage equity finance Simon Stockley Senior Teaching Faculty in Entrepreneurship
39 Sources of Equity Finance Your personal wealth (savings, equity in house) and that of business partners Family Crowd funding < 1m Business Angels < 1m (some syndicates may do more) Venture capital > 2m Corporate partners
40 Crowd funding The democratisation of capital? New platforms are launching with increasing frequency Crowd funding transactions in the UK are currently growing at over 100% per annum! Much of this is due to: The inability (or reluctance) of commercial banks to lend to small businesses since the financial crisis of 2008 Low rates of interest available to savers Regulatory reform by the UK Government Tax incentives (such as SEIS) which reduce risks for investors The relatively low barriers to entry associated with launching a crowd funding platform
41 Types of crowd funding Four broad categories: 1. Equity Money is invested in then business in return for an ownership stake (e.g. Seedrs, Crowdcube, Syndicate Room) 2. Debt Money is lent to the business (e.g. Funding circle) 3. Reward Money is given in return for non monetary rewards such as the goods or services to be produced by the business (e.g. Kickstarter) 4. Donation Money is given to support good causes (e.g. Justgiving, Spacehive) Crowd funding helps to validate your ideas and gain exposure for your business
42 Equity crowd funding platforms Average success rate is approximately 20% Transaction sizes have grown significantly in 2014 Valuation On most platforms you decide the valuation! All-or-nothing vs. keep what you get? Nominee structure? Fees usually in the range of 5% to 7.5% of sum raised Due diligence Basic legal checks but not into the idea or tech!
43 Raising money on equity crowdfunding platforms 1. Research - Study successful campaigns and the many online guides 2. Plan your campaign carefully 3. Set a realistic valuation It increases the odds of success 4. Build awareness use your personal and professional networks, social media and promote through your website (no spam though)! 5. Build momentum by pump-priming the campaign 6. Make a professional video pitch 7. Proactively manage your campaign Campaigns are quickly becoming FAR more professional..!
44 Business Angels Business Angels ( Angels ) are high net worth individuals who invest their own money into early stage new ventures. Often (but not always) experienced entrepreneurs Often (but not always) provide smart money by providing advice and making introductions to suppliers, distributors and customers k is usual investment but some super angels and angel syndicates may invest far larger amounts ( 1m +) They use their contacts and angel networks to find investment opportunities Increasingly using angel led crowd funding platforms such as Syndicate Room There are approximately 8,000 active angels in the UK To be considered by angels, your investment should (must) be eligible for the Seed Enterprise Investment Scheme (SEIS)
45 Seed Enterprise Investment Scheme (SEIS) For companies Maximum total SEIS investment 150,000 Must be under two years old Fewer than 25 employees Gross assets of under 200,000 Be in an approved sector UK registered with UK operations Funds must be used within 3 years For investors Max investment 100,000 50% income tax relief Returns are free of CGT Losses written down against tax Can have ordinary shares only Scheme closes 5 th April 2017 To avoid delays in closing your funding round, apply for your SEIS certificate well in advance
46 Returns to angel investors They understand that a high percentage of new ventures fail or underperform Even with experience and due diligence it is very difficult to pick winners To manage this risk they build a portfolio of investments (8 to 10) They are unlikely to invest unless the upside potential is 6 to 10x their money back Overall, returns average 2.2x (an IRR of 22.4% after 4 years) This compares very favourably to later stage venture capital funds! 1 Super star (10 to 15x) A typical angel portfolio Acceptable returns (3 to 4x) Get money back (1x) Total loss! The big question Will this investment give me at least 6 times my money back inside 5 years?
47 Business Angel resources Angel networks and service providers News and information about angel investing A useful introduction to angel investing k/member/directory HMRC site on SEIS Enterprise investment scheme association
48 Cambridge Judge Business School Venture capital Simon Stockley Senior Teaching Faculty in Entrepreneurship
49 So...you want to raise venture capital? My name is Rupert Although I am cultivated I am utterly ruthless You are not my customer You are not my friend I do not care about you or your hirelings If you fail me I WILL ruin you Now...how may I help you?
50 Venture Capitalists are Intermediaries Investors (limited partners) Companies e.g. Investment banks, pension funds, wealthy individuals, family offices VC Fund VC Firm (General partners) e.g. Amazon.com, e-bay, Ceres Power
51 VCs think in milestones and dream of EXITS Nobody makes real money until the exit!
52 The Venture Capital Cycle Investors in fund: Pension funds Investment funds Wealthy individuals Return distributed as cash or shares Fund 50m 10 years 500m VC firm raises, invests and manages fund VC firm keeps 20% of any return over 100% (Carried Interest) + charges a 2% management fee
53 Venture Capital - Some basics Equity is invested in rounds (seed, 1 st Round, 2 nd Round, etc.) Each round is released in tranches based on the achievement of milestones Be prepared for founder share vesting clauses! Some terms will alarm you They always require a board seat Deal structures vary widely, you need to take professional advice
54 VC Share Rights The convertible, redeemable, preferred ordinary share... They get their money back first and foremost under all circumstances...! Example: A VC invests 2.0m in return for a 50% stake in your company. After 5 years the business is sold for 4.0m, what is the return to the investor?
55 If the company is sold for 4 million VC receives its 2 million back (like a loan) 2 million remains VC receives its 50% share of remaining 2 million (= 1 million ) = 3 million for VC = 1 million shared out by other shareholders VC receives 75% of the proceeds
56 And if the company is sold for 10 million VC receives its 2 million back (like a loan) 8 million remains VC receives its 50% share of remaining 8 million (= 4 million) = 6 million for VC = 4 million shared out by other shareholders VC receives 60% of the proceeds
57 But..beware of the Liquidity Preference Company is sold for 4.0m and there is a 2x liquidity preference in the term sheet VC receives its 2 x 2 million back (like a loan) = 4m zero remains = 4 million for VC = zero for the other shareholders VC receives 100% of the proceeds
58 And if the company is sold for 10 million VC receives its 2 x 2 million back (like a loan) = 4m 6 million remains VC receives its 50% share of remaining 6 million (= 3 million) = 7 million for VC = 3 million shared out by other shareholders VC receives 70% of the proceeds
59 VC decision making Plans submitted After quick scan After few hours study 3.1 minutes After full investigation After price negotiations % Remaining
60 What VCs say they look for. The team - Especially positive if they have worked together before Clean IP portfolio - Especially in early stage tech firms Sector - Investors back what they know (so check out their portfolio). Traction in large, growing markets Financial indicators - Gross margin is a favourite Entry valuation - A black art Exit route - Can I get out? When? How? Valuation? Due diligence - any skeletons?
61 Top deal killers Poor quality management - leave positions vacant rather than recruit the wrong people Insufficient market size the best plans address huge opportunities Insufficient critical mass to the technology - VCs will not back a one-shot wonder Problems with intellectual property portfolio But.It depends heavily on the individual investor
62 Cambridge Judge Business School Debt finance Simon Stockley Senior Teaching Faculty in Entrepreneurship
63 Those aged 18+ living in England and looking for finance to start a business Average loan size is around 2,500, but the final amount will be determined by the business plan. There is no definite limit It is a personal loan, which means if 4 or 5 people from the same company apply for a loan, all are eligible for an individual loan up to invest in their business Paid back within 5 years at a fixed-rate of interest (currently 6%). Capital repayment holidays are available, but interest must be covered monthly throughout Start-up loans are accessible to anyone who had a business in its initial phase (up to 1 year from founding)
64 Corporate bankers When it matters most they are likely to let you down They are allergic to risk Trust is an alien concept Everything is negotiable Beware of personal guarantees They hate surprises Communication is the key!
65 CAMPARI : The Banker s Maxim Character - respectable & trustworthy? Ability - track record, team, potential Margin - % above base rate Purpose - expansion, rescue or buying toys Amount - is this realistic, too much or too little? Repayment - can you pay the interest and repay the principal Insurance - if required, is there security?
66 Enterprise Finance Guarantee (EFG) scheme The government will underwrite 75% of the loan An additional 2% is chargeable on the loan and paid to the Department of Business, Innovation and Skills Loans range in size from 1,000 to 1m The term of the loan can be from three months to 10 years EFG applies to: New term loans Refinancing an existing loan Converting an overdraft into a fixed term loan Guaranteeing an overdraft Guaranteeing invoice financing Lending decisions are made by the bank who will only turn to the EFG if the usual security criteria cannot be met by the business Lenders will still usually require a personal guarantee! This personal guarantee cannot include your principal private residence
67 Invoice Discounting Your customers will not be aware that you are using an invoice discounter... Your customer Invoice discounter Day 60: Customer pays you Day 1: You invoice customer Day 1: Customer and invoice details sent to discounter Day 2: discounter pays you 80% of the invoice value Your business Goods sold to customer on 60 days credit Day 60+: You repay the discounter the 80%, plus interest. Interest rate: 1.5% to 3% above base Credit management fee: up to 0.5% of invoice value
68 Factoring Day 60: Customer pays factor Your customer Factor Day 1: Invoice sent to customer by factor Day 1: Customer and invoice details sent to factor Goods sold to customer on 60 days credit Day 2: Factor pays you 80% of the invoice value Your business Day 60+: Factor pays you the remainder of the invoice, less charges. Interest rate: 1.5% to 3% above base Credit management fee: up to 2.5% of invoice value
20 IP Finance Toolkit 5. Funding Available for IP-Rich Businesses Introduction As the Banking on IP? report notes; SMEs first port of call for finance is often a bank. Figures quoted in the report show
Page 1 The Young Entrepreneur's guide to starting a business (Part 5) Richard Belsey & Fergal McLoughlin May 2013 A whistle stop tour of alternative funding options for start-ups As part of our Young Entrepreneur
Case # 5-0006 Updated January 12, 2005 Note on Private Equity Deal Structures Introduction Term Sheets are brief preliminary documents designed to facilitate and provide a framework for negotiations between
Early Stage Funding Dragon Law This book is for sale at http://leanpub.com/earlystagefunding This version was published on 2015-12-09 This is a Leanpub book. Leanpub empowers authors and publishers with
Agenda Lab to Market Raising Finance Session 1 David Gill @ Institute for Manufacturing 21 st June 2012 1. The Funding Map: understanding where you fit 2. Business Plans 3. Banks: General Overview 4. Operational
University of Minnesota Start-up Guide Office for Technology Commercialization (OTC) - Venture Center A guide for faculty, staff, and entrepreneurs interested in starting a new business based on University
VENTURE CAPITAL 101 I. WHAT IS VENTURE CAPITAL? Venture capital is money provided by an outside investor to finance a new, growing, or troubled business. The venture capitalist provides the funding knowing
Venture Debt Overview Introduction When utilized appropriately, venture debt can reduce dilution, extend a company s runway or accelerate its growth with limited cost to the business If utilized poorly
Financing your business Dr. T. R. Heidrick Poole Professor in Technology Management Faculty of Engineering/School of Business U of A Risk Capital ct. d Earns returns through participation in the future
A little book about funding your way from zero to A Dear startup What is a startup? This is a very quick D-I-Y guide of how to attract funding to your startup from zero to A. We ve collected some of our
GUIDE FOR INVESTORS The investment market is evolving. Get involved. I What is InvestingZone? InvestingZone is a web-based platform for buying shares in early stage, unlisted companies often known as equity
Insufficient Cash On Hand A Frequent Reason For Needing A Business Loan 2 Cash flow is cash into or out of a business When cash inflows exceed cash outflows, it is generally indicative of good financial
Guide to Sources of Financing for Companies By John A. Leonard Director, Fairfield and Woods, P.C. Below is a short guide to sources of financing for companies. Twenty-two sources of financing are listed,
Fundraising for Entrepreneurs Taylor Davidson taylordavidson.com I m Taylor VC Entrepreneur Previous professional experience includes: strategy consultant, startup CFO and business development, private
Demistifying TERM SHEETS since 2002 Components of Term sheet NOTA LEGAL PROMISE TO INVEST- intent to invest subject to fulfillment of conditions and due diligence Economics Valuation instrument Dividend
Von Allmen Center for Entrepreneurship FUNDING OPPORTUNITIES Von Allmen Center for Entrepreneurship Services Clients Faculty, clinicians & staff Students Community entrepreneurs Business Planning Assess
Knowing Your Options & How to Access Them Funding Choices in Edinburgh & Scotland Type of Finance Investment Grants Loans Type of Finance Invoice Financing Owners Capital Cash From Profits Asset Finance
BPEP Workshop Financing your Company (part 2) Corporate Structure and Managing Debt October 21, 2013 Scott D. Elliott Partner, Ropes & Gray firstname.lastname@example.org 415-315-6379 Ryan A. Murr Partner,
Finance for Business Growth A Presentation by Clive Lewis, Head of Enterprise, Institute of Chartered Accountants in England & Wales (ICAEW) Finance for Growth Businesses Presentation will cover: Do you
Managing Cash Flow & Accessing Finance A Presentation by Clive Lewis, Head of Enterprise, Institute of Chartered Accountants in England & Wales (ICAEW) Managing Cash Flow & Accessing Finance Presentation
How much is your pre-revenue company worth? RIC Centre Presentation Summary Andrew Maxwell April 14 2011 Introduction 2 Investors and entrepreneurs often ask me to shed some light on how to value prerevenue
Cap Tables Explained Introduction Capitalization tables ( cap tables ) are used to record and track ownership in a company. If you are a sole proprietor, then it is not necessary to use a cap table you
Angel Investing 101 February 26, 2015 Agenda Capital Sources For Entrepreneurs Who are Angel Investors? Why Angels join groups What is an Angel deal? Portfolio strategy for Angels Keys to success Acknowledgment
An Introduction to Technology Commercialization and Venture Capital 04.25.08 Shahin Farshchi, Ph.D. Associate 1 Talking Points I. Roadmap from the lab to the marketplace II. Who VCs are and how VC works
RELEVANT TO ACCA QUALIFICATION PAPER F9 Studying Paper F9? Performance objectives 15 and 16 are relevant to this exam Business finance Section E of the Paper F9, Financial Management syllabus deals with
Financing the Business Practical Entrepreneurship Training Part 4 Kieran Moynihan ( email@example.com ) Entrepreneur-in-residence, Cork Institute of Technology, Cork, Ireland October, 2013 Financing
Crowdfunding & Alternative Finance Kieran Garvey 22.7.15 Overview Background What is driving the Rise of Future Finance? Crowdfunding and AltFin models Market size and potential Creating a successful crowdfunding
Steve Plaskitt Corporate Finance Partner 07881 511 853 firstname.lastname@example.org Funding your Business October 2014 Contents Overview Finding the right structure Sourcing the right funding Internal
16.15 > 17.30 Workshop 4 Private and public financing for the acquisition of SMEs Moderator : Maurice Olivier CEO, BlueOcean Ventures Switzerland 16.15 > 17.30 Workshop 4 Private and public financing for
A B Glossary of Finance & Startup Terms Accounts payable - a record of all short-term (less than 12 months) invoices, bills and other liabilities yet to be paid. Examples of accounts payable include invoices
GUIDE Entrepreneurs A guide to investment jargon What does this guide cover? Angel investors, venture capital funds, accountants, lawyers and fundraisers use jargon. To anyone raising funds for the first
Web Brief New Peer-to-Peer Crowd Funding Business BFS Ref.: PF/394/045 Investment required: up to 400,000 (EIS pending) Summary Our client is a new start company, and will enter the rapidly expanding UK
Financing Entrepreneurial Ventures Part 1 Financial Plan & Statements Barbara Peitsch Program Director, Univ. of Michigan Peter Scott Professor of Entrepreneurship/Consultant August 2015 Economic Empowerment
+ Financial Planning Presented by Emma's Garden Financial Planning A comprehensive financial plan helps you to forecast and set your financial goals and milestones. Your financial forecasts are an essential
Funding Options In a commercial a few years ago, baseball legend and philosopher Yogi Berra said they give you cash, which is just as good as money. In typical Yogi fashion, there is some wisdom behind
Employee and Business Angel Shareholdings Avoiding Income Tax Issues Employee and Business Angel Shareholdings Introduction Private companies, particularly those in a start-up or early stage development
GLOSSARY OF TERMS -A- Accredited Investor The SEC designation for an individual or entity meeting any of the following criteria: Any director, executive officer, or general partner of the issuer of the
Measures to support access to finance for SMEs Contents Funding for Lending... 2 The National Loan Guarantee Scheme (NLGS)... 2 Enterprise Finance Guarantee (EFG)... 3 Business Finance Partnership (BFP)...
B R I E F I N G N O T E FINANCING A BUSINESS CHOOSING THE RIGHT OPTION Background A small number of businesses are in the fortunate position of operating in a cash surplus with money in the bank. For the
Part 10. Small Business Finance and IPOs In the last section, we looked at how large corporations raised money. In this section, we will examine some of the financing issues facing small and start-up businesses.
Understanding Valuation: A Venture Investor s Perspective A. Dana Callow, Jr. Managing General Partner, Boston Millennia Partners Michael Larsen, Senior Associate, Life Sciences Introduction You have met
VENTURE STAGE FINANCING A common form of raising early-stage working capital is through the sale of securities to venture capital firms or to angel investors. Venture capital firms are generally investment
Creating a Financing Strategy for Your Business "It is not the critic who counts...credit belongs to the person who is in the arena, whose face is marred by dust and sweat and blood...whose place shall
Financial Challenges and Pains faced by SMEs. The funding options available to them at different stages of their development. A Funding Whitepaper from SWBA. www.swba.co.uk 01225 580103 01932 244810 Table
Prof. Dr. Institutefor Strategy and Business Economics Chapter 10: Getting Financing or Funding Table of Contents I. The Importance of Getting Financing or Funding II. III. Sources of Equity Funding Sources
Access to Finance Guide: 1. Bank Finance Options Overdrafts An overdraft is a flexible way for you to manage short-term borrowing requirements. Business overdrafts are traditionally easy to arrange and
Investing in community shares Investing in community shares Introduction Give, lend or invest? Have you been invited to buy shares in a community enterprise? Then you are not alone. You are one of thousands
THE FUTURE OF CROWDFUNDING CROWDFUNDING - THE FUTURE? Presented by KPMG Welcome to the first of our roundtable reports from Tech City News. Our monthly roundtables cover topical issues that affect London
Introduction The capital gains tax (CGT) legislation favours business assets by providing a number of tax reliefs. The one with the widest scope is entrepreneurs relief, which results in certain disposals
Funding Alternatives in the Current Economic Environment RISE 2010 Alan Bickerstaff Technology and Emerging Companies Group Andrews Kurth LLP 111 Congress Avenue, Suite 1700 Austin, Texas 78701 (512) 320-9229
Venture Capital a primer And some lessons learned for entrepreneurs Martin De Prycker November 2015 Contents I. VCs and how they work Qbic Fund Sources of Capital Fund structure What does a fund offer?
Sources of Financing for Innovative SMEs: Public Sector Funds, Banks, Business Angels and Seed Funds, Venture Capitalists, Luigi Amati CEO META Group THIRD WIPO-INSME INTERNATIONAL TRAINING PROGRAM: FINANCING
AGENDA, Friday 24 October 2008 Financing Technology Ventures FINANCING Technology Ventures Agenda Capital: for what? The Sources: Origin of Capital Types related to Business Development Investors: types
Prof. Dr. Institutefor Strategy and Business Economics Chapter 10: Getting or Financing Table of Contents I. The Importance of Getting Financing or II. III. IV. Sources of Equity Sources of Debt Financing
EPISODE 1 VENTURES SUMMARY OF TERMS FOR SALE OF SERIES SEED SHARES Company [Company] Founders [Founder 1], [Founder 2], & [Founder 3] Investors Structure of Financing Conditions to Close Estimated Closing
A DV I C E B O O K L E T how to finance the business HOW TO FINANCE THE BUSINESS Getting enough of the right funding is one of the more difficult tasks that you will face as a new entrepreneur. Typically,
YOU GOT THE TERM SHEET NOW WHAT? The purpose of this guide is to give entrepreneurs a high level overview of the angel and venture capital fundraising process. It is our hope that this overview will help
Online Accounting Software FUNDING OPTIONS GUIDE Why you need to think about funding Every business needs money. Starting a business presents new challenges, many of which will require some financial outlay.
Overview The Entrepreneurship & Innovation Asia Programme is conducted by Nanyang Technopreneurship Center, the dedicated center offering Entrepreneurship Education to NTU students. The programme consists
A Pi Primer in Entrepreneurship Prof. Dr. Ulrich Kaiser Chairof Entrepreneurship Universität Zürich Fall 2012 Content 2008 Prentice Hall Seite 2 A Pi Primer in Entrepreneurship Part III Movingfroman Ideato
Wirtschaftsforum Kalaidos Fachhochschule Cash is King A (one) VC insight on cash management Diego A. Braguglia, PhD VI Partners DBA_1 Wirtschaftsforum Kalaidos Fachhochschule 2008: 212 VC funds with $25bn
KEY GUIDE Setting up a new business The business idea You have a business idea, but can you turn it into a viable enterprise? Is there a market for the goods you will produce or the services you will supply?
Community and Renewable Energy Scheme Project Development Toolkit Balance Sheet Equity Investment Community Bond Issues Community Vehicle Crowd Funding Debentures a form of bond Debt Debt Service Cover
Introduction Trading in shares has become an integral part of people s lives. However, the complex world of shares, bonds and mutual funds can be intimidating for many who still do not know what they are,
9-804-042 REV: MAY 13, 2009 WILLIAM A. SAHLMAN The Basic Venture Capital Formula Valuation Assuming No Dilution Consider the situation of a venture capitalist who is contemplating a $3.5 million investment
POLYTECH VENTURES - How to be prepared to negotiate with an Investor V E N T U R E C A P I TA L I N T R O D U C T I O N Why? If you launch your project, there is a high likelihood that you will need an
BUSINESS INVESTMENT RELIEF Private company investing for non-domiciled ordinary UK residents May 2014 Rockpool is an independent firm dedicated to creating tax-efficient investment opportunities for individuals.
Introduction This section covers the main tax issues that arise when buying or selling a business owned by a sole trader, a partnership or a company. The tax consequences differ, depending on whether the
the valuation of high-tech companies course outline introduction valuation of a company Introduction Concepts Methods example: valuation of a biotech company introduction the right choice CCF VC bank business
Successful Accounting/Financing for Small Business Financing Overview Department of Economics Finance, and Decision Sciences University of North Carolina at Pembroke email@example.com 910-987-2311
Royalties, The better way of both investing in and financing of companies and projects Prepared for UCSD Jacobs School of Engineering s von Liebig Entrepreneurism Center Aligning the interests of those
Debt is good (sometimes) How to tell when borrowing is a smart way to grow February 2011 By Chris Kondo RoseRyan Consultant You ve got a hot deal on the horizon and need to ramp up production. Or you need
Guidelines Business Plan and Innovation CTI Jurors evaluate business plans and provide feedback entrepreneurs in 9 areas and VCs in 4 areas Objectives Elements of evaluation Relevant for ranking 1 Jurors
INTEREST FREE NON REPAYABLE BUSINESS FUNDING Charles Brooks Comprehensive BusinessManagement Ltd www.cbmgroup.co.uk 1 INTRODUCTION If you ve ever been involved in a start up venture you can probably remember
GLOSSARY 2000 Ewing Marion Kauffman Foundation. Used with permission. All rights reserved. www.kauffman.org and www.angelcapitalassociation.org. A Accredited Investor An individual who meets one or more
Anatomy of an Investor Term Sheet By Andrew S. Whitman, Managing Partner 2x Consumer Products Growth Partners Before you receive a term sheet from an investor, you should consider that traditional investors
Venture Capital Term Sheets 101: Understanding Critical Terms of Your Early Stage Venture Deal Presented by Mitchell C. Shelowitz Shelowitz & Associates PLLC Tel: 646-839-4621 Cell: 917-669-8427 Email:
Seed Enterprise Investment Scheme The Enterprise Investment Scheme (EIS) has been in place for a number of years and provides tax relief for individuals prepared to invest in new and growing companies.
Secondary research into the availability of business finance NESTA The National Endowment for Science, Technology and the Arts (NESTA) is an independent body with a mission to make the UK more innovative.