forms of funding for startups

24
https://www.flickr.com/photos/jdhancock/ SOURCES OF FUNDING FOR STARTUPS WITH FOCUS ON CROWDFUNDING

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Page 1: FORMS OF FUNDING FOR STARTUPS

MICHAL GROMEK PONTUS ENGSTRÖM1320 ENTREPRENEURSHIP ANDOPPORTUNITY , 22TH OF JANUARY 2017

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SOURCES OF FUNDINGFOR STARTUPS WITH FOCUS

ON CROWDFUNDING

ENTREPRENEURSPERSPECTIVE

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POTENTIAL QUESTIONS:

I HAVE A BUSINESS IDEA, SO HOW

DO I RECEIVE FUNDING?

CAN I JUST UPLOAD MY BUSINESS

IDEA ONLINE?

HOW CAN THE STARTUP THAT I

WORK WITH RECEIVE FUNDING?

ROAD MAP FOR OUR 90 MIN TODAY: DIFFERENT TYPES OF FUNDING SOURCES FOR ENTREPRENEURS AND STARTUPS (FIRST 45) WITH AFOCUS ON CROWDFUNDING (SECOND 45 MIN)

NO CANNED

SOLUTION :)

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OUR SESSIONS ARE TO SHORTTO GO INTO DETAILS INDIFFERENT TYPES OF FUNDING,PLEASE USE THE VIDEO LINKSAT THE CORNER OF THEPRESENTATION TO WIDENYOUR KNOWLEDGE.

FINE PRINT: YOU DON'T KNOW YET IN WHICH SITUATION THESTARTUP THAT YOU WILL CHOSE ACTUALLY IS.

POINTERS

TO THINK

AND EXPLORE

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STARTUP FINANCING CYCLE (MODEL)

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STARTUP FINANCING CYCLE (STAGES OF FUNDING)

PRE-SEED FUNDING

SEED FUNDING

SERIES A / SERIES B

SERIES C

FOR MORE INFORMATION WATCH OUR PRESENTATION FROM LAST WEEK - LINK

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STARTUP FINANCING CYCLE (MORE PLAYERS)

REWARD BASED CROWDFUNDING

INSTITUTIONAL FUNDING

HEDGE FUNDS

PUBLIC FUNDING

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STARTUP FINANCING CYCLE (WHAT DO YOU PITCH)

TEAM VISION MISSION TRIGGER EMOTIONS REPUTATION

INSTITUTIONAL FUNDING

HEDGE FUNDS

PUBLIC FUNDING

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STARTUP FINANCING CYCLE (WHAT DO YOU PITCH)

TRACK RECORD PATENT APPLICATION TRACTION RETENTION DATA, DATA, DATA

INSTITUTIONAL FUNDING

HEDGE FUNDS

PUBLIC FUNDING

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FRIENDS FAMILLY FOOLS

THEY JUST FUNDING, DON'T HOPE FOR STRATEGY TIPSCAN BE A NIGHTMARE TO DEAL WITH THEM - SO FAR LITTLEBUSINESS S EXPERIENCE (IT WAS FOR ME) IN CASE BUSINESS FAILS THEY CAN TAKE IT PERSONALLY

DOWNSIDES

COMMUNICATE RISK CLEARLY HAVE A SHAREHOLDER AGREEMENT DON'T ASK FOR MONEY THAT THEY CAN NEED

TIPS:

UPSIGHTS

USE YOUR REPUTATION

DON'T CHECK CREDIBILITY

LESS BURACRATIC

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BUSINESS ANGELS

BUSINESS ANGEL CAN BE STRONG INDIVIDUALS, AND SOME GOTWEALTHY BECAUSE OF LUCK AND NOT NECESSARY EXPERIENCE. SOME BUSINESS ANGELS LIKE TO HAVE MORE CONTROL THANWHAT FOUNDER ARE WILLING TO GIVE.

DOWNSIDES

SPEAK TO FOUNDERS OF COMPANIES WHERE BA'SHAS INVESTED INTO. REVIEW THE BA'SPERFORMANCE IN YOUR SECTOR

TIPS:

UPSIGHTSINVEST ON EARLY STAGE, LIKE TO TAKE RISK

CAN OPEN DOORS WITH THEIR INFORMAL NETWORK

MONEY IS NOT A LOAN (USUALLY)

BUSINESSES OPERATE LONGER AND HAVE A HIGHER RATE OF RETURN

LINK TO HOW TO RAISE MONEY FROM ANGEL INVESTORS (PLEASE SKIP FIRST 12 MINUTES)

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VENTURE CAPITAL

LONG DUE DILLENGENCE PROCESSTENDENCY 95% DISCOUNTED VALUATION METHOD STRONG PERSONALITIES SINCE 2009 > USUALLY LATE STAGE FINANCE (SERIES A+)

DOWNSIDES

UNDERSTAND HOW VC WORKS (PRESENTATION BELOW)REVIEW WHEN THEY HAVE BEEN RAISING MONEYAND IS THERE OWN PERFORMANCE

TIPS:

UPSIGHTSMAYBE SMART MONEY

STRONG NETWORK

LONGTERM PARTNER 4.2% OF VCEMPLOYEES ARE

FEMALE*

*SOURCE: http://fortune.com/2015/01/30/women-are-not-making-progress-in-male-dominated-vc-world-data-shows/ (ACCESSED 20th OF JANUARY)

LINK TO HARVARD INNOVATION LAB ON HOW VC MAKE DECISION

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HOW DOES VENTURE CAPITAL

MAKE MONEY?

60 SECOND CHALLANGE :)

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GET A PIECE OF

PAPER READY

AND A PEN OR THE ELECTRONIC VERSION OF IT :)

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60 SECOND BONUS CHALLANGE :)

WHAT ARE MANAGEMENT FEES?

HOW HIGH ARE PERFORMANCE

FEES?

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60 SECOND BONUS CHALLANGE :)

2% MANAGEMENT FEE

20% PERFORMANCE FEE

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OTHER FORMS:

CREDIT CARS, OVERDRAFTS = EXPENSIVEINFORMAL DEBT

EQUITY INVESTMENT (ALMI INVEST)DEBT AT AROUND 6%-10% (ALMI) COLLATERAL GUARANTEE EUROPEAN FUNDING (FRAMEWORK7) VINNOVA (GRANTS

GRANTS GOVERNMENT

CAN BE VERY TIME-CONSUMING ADMINISTRATION MIN. SIX MONTHS

LINK TO THE INITIATIVE OF THE EU COMMICION ON STARTUPS

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TO MUCH OF THE FUNDINGDESCREASES THE SENSE OFURGENCY AND FOCUS ON SALES(EXAMPLE: OUR FIRST GUESTSPEAKER)

PLANNING FOR FUNDING IS ONLY AS GOOD AS THE QUALITY OF YOUR BUSINESS FORECAST

TO SMALL FUNDING ROUND(PERMANENT FOCUS ONFUNDING - IT TOOK MEAROUND 70% OF MY TIME TOFOCUS ON FINANCE)

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WHAT IS REALLY NEEDED AND WHAT IS A LUXURY SCENARIO?

WHAT IS REALLY NEEDED

HOW WILL THE FUNDING REALLY BE USED?

WHAT SHOULD THIS BE USED FOR (BACKGROUND BIAS)

BUSINESS MAJORS - INTERNATIONALISATION

MARKETING - ONLINE OFFLINE MARKETING

PUBLIC RELATIONS - BIASED

ENGINEERING BACKGROUND - PRODUCT, PRODUCT, PRODUCT

YOU CAN PLAN AND CONTROL EXPENSES BY NOT REVENUE

PLEASE FOCUS ON SALES (!)

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2. CONSERVE YOUR EQUITY THIS IS THE ONLY ASSET YOU HAVE.

WHAT SHOULD YOUR STARTUPS FOCUS ON

GET YOUR STRATEGY RIGHT FIRST.

FUNDING DETERMINE MIGHT DETERMINE YOUR STRATEGY

INVESTORS WILL BE CONCERNED WITH:

MARKET RISK

PRODUCT RISK

FINANCIAL RISK

WHAT IS HAPPENING IN THE FIELD OF BUSINESS FIELD OF YOUR STARTUP?

MONEY IS THE SOLUTION, WHAT IS THE PROBLEM.

NEWS.GOOGLE.COM HTTPS://TWEETDECK.TWITTER.COM/#TRENDS.GOOGLE.COM

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FIRST JOURNEY OF AIRBNB

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NEXT STEPS

DIFFERENT INVESTORS DIFFERENT MESSAGE

THERE IS NO "ONE TYPE OF CROWDFUNDING"

PLEASE WATCH THE VIDEOS, THAT YOU CAN ACCESSAS HYPERLINKS IN THIS PRESENTATION BEFOREYOUR FIRST MEETING WITH YOUR PARTNER STARTUP

EXAMPLES OF PITCHES

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1320 ENTREPRENEURSHIP ANDOPPORTUNITY , 20TH OF JANUARY 2017

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SLIDES ARE ONLINE ON: SLIDESHARE.COM/

MICHALGROMEK (4:30PM)

CC LICENSE FOR DISTRIBUTION

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BREAK

UNTIL 15:15