42629 lecture 11 pt 1

Innovation and Product Development

Starting your own companyJakob A. Bejbro [email protected]

Unless otherwise stated, this material is under a Creative Commons 3.0 Attribution–Share-Alike licence and can be freely modified, used and redistributed but only under the same licence and if including the following statement:

“Original material by Jakob A. Bejbro Andersen for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark”

mailto:[email protected]

2012Original material by Jakob A. Bejbro Andersen for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark

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Why start a company?

• A number of practical reasons:– De-couple personal and professional risk– Get investments– Avoid VATs (DK:MOMS)

• However, more importantly:– Starting a company means being your

own boss.– You get to change things and create

value for others.– The relation between effort and payoff

cannot be clearer.


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A case we all know

”Citrix buys Podio for social collaboration”

Cost: Rumoured to be a nine figure acquisition!!!

http://www.youtube.com/watch?v=nTs3iLy3q3Y

http://www.youtube.com/watch?v=nTs3iLy3q3Y


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Why start a company – some statistics

• Every year the danish governement puts out its ”Iværksætterindeks” (Entrepreneur index).

• The index shows that young companies create almost half of the new jobs (Indeks 2011).

• In short:

–You’ll be making a difference!


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Common misconceptions about starting up• ”As an entrepreneur you are left to your own devices”

– Wrong, there is a mass of different organisations out there looking to help entrepreneurs (Connect DK, Vaeksthus GC, Stardust DTU and many more)

• ”Denmark is a bad place to start up”– Nope, Denmark has on several occations been rated as

a top three country for entrepreneurs.

• ”My idea is inferior – why should I bet on it”– Not true; if you have done your homework (market

analysis etc.) you probably have a good starting point.


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Some important things to remember• Collatoral – as a single person company or as board member,

you can be held personally responsible and be asked to provide collatoral for

• Unemployment – In Denmark, you are not eligible for unemployment benifits if you own more than 10% of a company.

• Tax report submission – If you are self-employed,you will have to fill in an extended tax report.

• Wages – As an entrepreneur, you can expect to getpaid according to what is ledt from the company’s operations. !!!! !


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Choosing your company type• Depending on a number of different factors, you may

choose different types of companies. Personally owned company

I/S(Interessent-skab)

Aps(Anparts-selskab)

A/S(Aktieselskab)

Documentation on formation

None Contract between founders

Several documents

SeveralDocuments

Help from auditor/lawyer

No No Yes Yes

Formation capital None None DKK 80.000 DKK 500.000

Founders provide Collateral

Yes Yes Limited Limited

Board required No No Yes Yes

Reporting requirements

Personal tax report*

Personal tax report*

Extensive* Extensive*

British equivalent Sole trader Limited Liability Partnership (LLB)

Limited Company (LTD)

Public Limited Company (PLC)

* Added reporting requirements if company has employees

!!

!


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Personally owned company or I/S• If your turnover is less than DKK 50.000, you need to do

nothing.• You can set up a company in 15 minutes on www.virk.dk• You provide collateral if the company cannot pay

creditors(!). • In an I/S the ownership is shared between several persons.• The owners in an I/S provide collateral on a

solidary basis.

http://www.virk.dk/


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Aps or A/S• The share capital has to be provided before forming the

company– Aps: 80.000– A/S: 500.000

• This money is put on a bank account created for the company.

• Again, you can use www.virk.dk, but you need a number of additional documents.

• Creditors can only make claims for the share capital.• Requirement for annual report (DKK 20-30.000).• Preferred company type for early stage investors.

http://www.virk.dk/


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For each group:

Discuss which type of company would be interesting for your group and

idea.

you have 5 minutes!

Share conclusions with the class!

Exercise 1:


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Resources• At the website www.virk.dk, you can find a number of

relevant resources:– Info on different company types.– Overview of required documents.– Descriptions of what to do when you get employees.– ...

http://www.virk.dk/


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Other practicalities- Before setting up a company, you may want to:

- Find a place to sit (Createch incubator?).- Buy the domain name for your company.- Set up e-mail

- ”[email protected]” does not look pro- Setup a phone system.- Get business cards.


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42629 lecture 11 pt 1

Education