funding for innovative startups - part 2 of 5

SESSION TWO: MILESTONE FUNDING & FUNDING NEED

Benno Groosman MScBA – www.groosman.info – Athens, February 24 –

MASTERCLASS FUNDING FOR INNOVATIVE STARTUPSBenno Groosman MScBA – www.groosman.info – Athens, February 16 – Orange Grove

MASTERCLASS SCHEDULE

Session 1: Introduction to funding language + business planning;

Session 2: Determining funding need + milestone-based funding;

Session 3: Building your financial investment plan;

Session 4: Investor readiness;Session 5: Advanced funding and wrap-up.

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FUNDING MASTERCLASS

IN THIS PRESENTATION

Do you need investor funding?Value-adding activitiesMilestone-based funding Your funding need and match with stagesWhat’s next?

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FUNDING MASTERCLASS

DO YOU NEED INVESTOR FUNDING?

First, get money from:Selling your test product;Make customers pay in advance (or sell MVP);Use government subsidies and grants;Consultancy (but don’t loose your focus!); (Ask to) pay your suppliers later.

... TO BE ABLE TO MAKE A BETTER DEAL.www.groosman.info

FUNDING MASTERCLASS

VALUE-ADDING ACTIVITIES

Investors don’t like to pay for marketing, big office space and high salaries. They want to build the business by investing in prototypes, production, sales, patents, strategic positions etc.

Use all funding to increase the valuation of your venture.

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VALUE-ADDING ACTIVITIES/RESULTSWork on prototype (R&D)Direct customer acquisitionSuccessful patent applicationsStrategic partnerships Improve product/market fitClear go-to-market strategy Improve your team… and more

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FUNDING MASTERCLASS

VALUE-ADDING ACTIVITIES/RESULTS

Not: beautiful logo, business cards and websiteNot: a great CRM system without customersNot: adding more and more features to productNot: visiting events or exhibitions without a clear goal and result

Not: Facebook likes or blog readers you didn’t monetize

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FUNDING MASTERCLASS

VALUE-ADDING ACTIVITIES/RESULTS

What should YOU do to add value to your startup? www.groosman.i

nfo

FUNDING MASTERCLASS

FUNDING NEED AND STARTUP STAGE

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FUNDING MASTERCLASS

FUNDING FROM EARLY TO LATER STAGEFriends, family and foolsGovernments, universities, larger companiesCrowdfunding and crowd-investingBusiness angels (informal investors) Launching customersVenture capital fundsPrivate equity / IPO / exit… and more

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FUNDING MASTERCLASS

FUNDING NEED AND STARTUP STAGE

Do you know what source of money fits your startup stage?

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MY DEFINITION: MILESTONE

A milestone is the concrete achievement of a significant step in your venture planning, which adds financial value to your venture.

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MILESTONE-BASED FUNDING

Define the milestones in your startup planDetermine the amount of money and time you need to reach each milestoneMatch milestones with available funding sourcesCan you combine the milestones for funding?

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FUNDING MASTERCLASS

MILESTONE-BASED FUNDING QUICK SHEET

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MILESTONE-BASED FUNDING QUICK SHEET

Download at:www.groosman.info/#!funding/cbvu

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FUNDING MASTERCLASS

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FUNDING MASTERCLASS

MILESTONE-BASED FUNDING QUICK SHEET

Take 10 minutes to fill in the sheet and 15 minutes to discuss with your neighbor. www.groosman.i

nfo

FUNDING MASTERCLASS

MILESTONE-BASED FUNDING

It’s easier to get milestones funded than activities or the total costs for years in the future

Milestones make you and your financers focus on the big picture, instead of daily operations

It’s possible to secure the funding of different milestones by combining the commitment of different (types of) funding sources in advance: you could capture these in one investment contract (with options)

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FUNDING NEED

Ask the money that you really need, not too little,and about 10-20% extra for unforeseen expenses,to achieve the milestone(s) you are aiming for.

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SNEAK PREVIEW NEXT SESSION

In order to raise money you have to show financial projections for the future

For these projections you have to make estimates of costs and revenues

In new ventures these estimates are assumptions

The number is not the most important, the assumptions you made to get to this number is!

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FUNDING MASTERCLASS

FOLLOW ME

Benno Groosman MScBAExperienced startup entrepreneurwww.groosman.info

www.groosman.info

FUNDING MASTERCLASS