aboutFUNDING

Sharing from Yoyo

2015.1 @ SSX

Why Funding?

• Share Risk

• Get More Cash/Fuel/Bullet

• Get Market Feedback (from Investors)

• Build Alliance/Partnership

• Prepare for IPO

How much you need?

• More fund, safer but dilute more of your share!

• More fund, more difficult to grow EPS!

• More fund, less control power of the TEAM!

• Burn-rate of 1.5~2 years, in WORST case!

• Enough for you to make at least ONE PIVOT!

• So, it’s absolutely NOT AS MUCH AS YOU CAN GET… but sometimes you don’t have choice but to get all!

Where to Get Funding?

• F&F (Family, Friends, Fools…)

• Angel (Personal, Angel Fund…)

• VC- Investment VC- Corporate VC- Government Fund (Matching Fund)

• Corporate

When to start Funding?

• At least 6 MONTHs BEFORE

you burn out all CASH… and midnight oil…

• Before your business kick-off

• In fact, if you are running a business,

EVERYDAY can be funding day!

About VC

• Q : Which industry are they preferred?

• Q : Which stage are they preferred?

• Q : Which model (D/F) are they preferred?

• Q : Which relative case do they invest?

• Q : How much do they use to invest?

• Q : How long the decision process?Init. contact DD IC Board Pay-inNormal cycle can be 2-6 months

AO

• Identify GUARD in VCG – GatekeeperU – UserA – AdvisorR – RecommenderD – Decision Maker

• AO – GU, partner…

• VP – AR, brother/sister…

• GM/President – D, parents…

BP/Pitch (1)

• Say again and again and again and again …

• Modify “each time”… - You will learn “something” from each presentation/interaction- Your BP/Pitch has to be tailor-made for different audience- The most important, you have to “speak the language your audience can understand”

BP/Pitch (2)

• 3 formats- Elevator Pitch : few words in 1 mins- Brief BP : for initial contact with VCs- Completed BP : for DD

• If possible, ask VC to provide you their format, then prepare it for them… AO will be appreciated your effort and you can also learn how do they evaluate your plan

How to find VC?

• Start-Up Competition/Contest Event

• Club (TVC) / Incubator / Accelerator

• Personal Connection / Matchmaker

• Café shop?? Well, well, wait…

• VC is a small POOL in Taiwan, so once you can get one, you can even get ALL!

How to find Mr. RIGHT (VC)?

• Date at least 2 times with AO!

• Go their office to meet VP or GM at the 3rd

time… you are going to meet their parents, so be prepared! Your AO is your best partner to help you…

• If you are lucky to be introduced to VP/GM/Chairman directly at the first time and he/she likes your idea, BINGO!

Others you need to know…

• Hit rate of VC dating is around 10%... So don’t worry that 90% VCs rejected you at last!

• Like dating, if you are hunger for “getting marriage”, you might scare away them… in the other hand, if you are FREE to go anyway, and you are real valuable, they will pursue you!

• Find not only Mr. RIGHT, you have to identify “lead investor” ASAP!

Who’s Lead Investor?

• Lead Investor is the one who :- invests the most part or biggest part- the first one to offer you the “term sheet”- others are willing to follow- helps to coordinate the funding process- offers the investment agreement

About D/F company design

• Domestic companyPros : government matching fund, better to IPO in Taiwan stock market, easier to set up, less accounting/legal fee…Cons : less technical share (free share)

• Foreign companyPros : bigger technical share (free share), flexible term sheet, flexible stock option…Cons : higher acc./legal fee, no gov matching fund, most domestic VCs are not preferred

About Term Sheet

• Valuation/Free Share/Share price

• Board Seats

• Options

• Funding amount

• D-day of pay-in

About Technical Share in TW

事項/

交易發起設立 現金增資(溢價發行)

資本公積轉增資配股

面額調整10元

每股價格

2 10 2 10

項次股東姓名

認購股數

認購金額

認購股數

認購金額

增資後持股數

持股比例

增資股數

增資後持股數

持股比例

增資後持股數

持股比例

1現金投資人

N/A 4,000 40,000 4,000 80%12,800 16,800 80% 3,360 80%

2團隊現金投資

1,000 2,000 0 0 1,000 20% 3,200 4,200 20% 840 20%

The LAST

• Remember, it’s a 6 MONTHS’ MARATHON, not 100M RACING!

• There are UPs and DOWNs during the period, be prepared with your strong heart, cool brain and clear mind!

• BAD thing is NOT BAD, GOOD thing is NOT GOOD, everything is POSSIBLE!

• It’s NOT OVER until the FAT LADY SINGS!.

• Need matchmaker? Come to me.

Angel + Agent = Angent

• Silicon Valley’s Trend : Super Angel/Institutionalized Angel

• Agent : Create Value for Super Star- They know what your value is- They know how to present your value- They know where to deal your value- The most important, they take care everything to let you focus on your value

• SSX Angent

More about Angent

• Be Funding Agent (CFO)

• Be HR Agent (CHRO)

• Be Strategic Partner Agent (CSO)

• Be Angel*

• Quit after A-round is done, or after official CFO is hired…

• Return in Angel Investment or Free Share

Q & A(ngent)