How to raise money for your first startup business

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How to raise moneyHow to raise moneyfor your first startfor your first start--up businessup businessPeter Cheng | 程勇http://cn.linkedin.com/in/petercheng

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AgendaAgendaIs right time for Start-ups? How much do you really need for a Startup? Raise money, alternative way Get things done , Strategy to Action

2

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I have a Dream

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The Business Revolution

What’s Next 5 Year?

1999 2004 2009

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Today is So Yesterday

NASDAQ

China Stock A

The Gartner Hype Cycle

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Is the right time?

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What Type of Business Are You in?

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Content vs Context vs Timing

• Right idea in the wrong place (JFox)• Right idea, right place wrong timing (Yes PPG)• Right idea, right place, right timing…but Wrong

team (Xiaonei)

天时 地利 人和

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How much do you need?

• Project how much money you need for one year

• Add a 30% buffer• Fundraising will take 6-9 months. (current

climate 9-12+ months)• Angel (seed) or venture capital (Series A)

Beijing RMB 50,000 ~ 100,000 Start-up

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Who is your ideal investor?

• Capital needs dictate investor type• ✓ Micro-seed capital. < RMB 100,000

(i.e.TechStars, friends & family, savings, Visa/Mastercard)

• ✓ Seed capital. RMB 100,000 - 2 million (angels/angel funds. i.e 雷军)

• ✓ Series A round. RMB 2 – 10+ million (i.e. north light vc)

• ✓ Smart money is best. At some point you need money in.

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Make your company investment ready

• Get Things in Order» Vision -- What we do » Strategy -- How we do it» Action – Get things done

• Packaging Your Startup» Create a solid team» Target a segments market» Build an advisory board» Sign strategic partners or» blue chip customers

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Crowding Funding , A alternative way

• Raise $ 300,000 from 1~3 investor• Raise $ 30,000 from 10 private investors

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Everyone has different strengths Tell your supporters all the

ways they can help• Donate• Spread the word• Host a fundraiser• Offer matching funds• Feature your project on their

blog or social network• Provide creative ideas to get

donors energized

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Identify Your Network

• Donors• Friends• Family• Board Members• Personal network• Coworkers• Staff• Fans• Community organizations

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Get your network to spread the wordCrowdfunding

Development Director

Emails 100 donors asking for $10 each

and to tell 100 of their friends.

100x100x$10 = $100,000

Same effort, but better result.

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Strategy to Action

• Building strategy is like a trip to the moon...you know your target but it keeps moving and you have to react accordingly

Paraphrased fromRegis McKenna

Vision

Resource

Strategy

Action

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Basic Elements of a Strategy

• Organization Chart• Strategy Model• Project & projectportfolio• Projectportfolios’ Performance• Projectiportfolios’ GANT chart - Roadmap• Metrics - Measure of success

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From Strategy to Action

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Agile Strategy

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Reasons for High Tech Company Failed

• Lack of Market Focus (a.k.a. Segmentation)• Undifferentiated Products• Failure to Establish the Right Competitive Barriers• Misinterpretation of the Technology Adoption

Lifecycle Model

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It’s about collaboration

•Shareholder Engagement

•Coordination & Collaboration

•Social Media Integration—wikis, Google Docs

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Opening Soon…… April 2010

www.c2ivc.comFocus Areas:

• Open Source Software and Services • Technology Enable Services• Mobile Computing

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Best of luck!

Peter Cheng