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8/10/2019 FI Session - Bootstrapping & Fundraising
http://slidepdf.com/reader/full/fi-session-bootstrapping-fundraising 1/17
Capitalizing Your Company
1. Seed (Idea to Prototype) < S$250,000
2. Early Stage (Product to Revenue)
S$250,000 - S$600,000
3. Growth Stage (Revenue to Profitability)
S$750,000 - S$4m
4. Late Stage (Profitability to Expansion/Exit)S$1m- S$16m
Reference: Meng’s Map of The Money
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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Solutions
8/10/2019 FI Session - Bootstrapping & Fundraising
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CAPITALIZING AT SEED
1. Grants (iJam/ACE $50k, iJam Reload $250k)
2. Angel Investors (BANSEA.org, AngelGates, Echelon)
3. Friends, Family & Fools (Good way to end up withneither) – Emotion vs Logic, % of net worth
4. BootStrapping (Sell yourself)
Government Schemes and Startup Investors in SG
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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Adv & DisAdv of Bootstrapping
Adv
1. Save time pitching, more control over company’s pace and
corporate structure
2. Good financial discipline + You learn more what really
matters
DisAdv
1. Slower Pace of Growth, Personal Risk
2. Less support and lower Media Value
Reading : http://yongfook.com/10-reasons-why-i-self-funded-my-startup-and-so-should-you.html Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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WHAT DO ANGELS LOOK OUT FOR?
Competitive advantage
Market opportunity
Growth potential/ Scalability
Technology – First of a kind new ideas
Management team
Use of proceeds – Accelerate Company’s value
Fit
Exit strategy Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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WHAT DO ANGELS LOOK OUT FOR?
Terms (BANSEA)
Pre-money valuations well below $3 million, from as little as
$250K
Angel group members generally receive 20-40% of thecompany’s fully diluted equity in exchange for their investment
Tip : Avoid stating a particular Pre-Money Valuation. Offer
interested parties to make a competing offer instead
Reference : http://jfdi.asia/accelerate/terms/
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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WHAT DO ANGELS LOOK OUT FOR?
30: 30 : 3 Rule
30 Seconds Elevator Pitch
30 Minutes Presentation Pitch
3 Hours walk through
Reference: How to design your powerpoint – Guykawasaki’s
10/20/30 Rule + Actual Powerpoint templates
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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Milestone
What milestone should you look to achieve next? – Depends
on what are you doing.
Moonshot E.g. Whatsapp
- Huge market potential
- Extreme scalability
- Requires long term financing
- No short term profitability exist
Deliver growth and usage numbers
Bukit Timah Shot E.g sgCarMart, PropertyGuru- Medium market potential
- Average scalability
- Short Term profitability possible
Deliver profitability , secure retainers, improve margins Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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Planning Objectives
Work from ground up instead of top down
Sales
- Can your product be bought? Or does it need to be sold?
- Market versus Direct Sales/Partners
- Appointments to Closure
Cashflow
- Minimum 6 months cashburn
Technology- Feature Set roadmap
- Usage and uptime
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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Difference Between a Business & a Job
Will your business run itself while
you’re on holiday?
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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Difference Between a Business & a Job(Corporate)
A business should always focus on valuation. This
involves cashflow yes and 3 other major areas:
1. Building a Team
2. Building Assets (Property, Brand, Tech, IP etc)
3. Creating lifelong customers
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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Pre-Revenue Valuation
2006. Googleacquired at
$1.65B
$82 Per Pair ofEyes
(Source: Kameir)
2007. Microsoftacquired 1.6% at
$240M
$273 Per Pair ofEyes
(Source: Kameir)
2012. Ask.comacquired About.com
at $300M
$22 Per Pair of Eyes
(Source: Kameir)
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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Across Industry Valuation
EV/EBITDA : 1-2x EV/EBITDA : 4.28x
(Source: Infinancials)
EV/EBITDA : 10x++
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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Strategic Assets - RARE
RealGenerate cashflow aka valuable
Anti-CopyCat
Not able to duplicate it perfectly
Remarkable
Cannot be easily purchased
Exclusive No close substitutes
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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New Factor of Production
WhatsApp Acquisition by Facebook
$19, 000,000,000
20 million Revenue
450 million Users
Startup with 55 employees
$42 per user
(Source: WSJ & Forbes)
Joelfu.com
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For Non Tech Business
Don’t have to be a Geek to integrate Technology into your
Business
Property Guru Investor Pitch – Scout24
US$48M for minority Stake
SGCM Investor Pitch $60M
Technology doesn’t cost. It Pays
Joelfu.com
8/10/2019 FI Session - Bootstrapping & Fundraising
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Exiting
IPO/ Corporate Buy-Out/ Financial Investor Buy-Out
How do you help a bigger company diversify or vertically
integrate effectively ?
- Synergy (Increase Revenue)
- Market Power
* Build a proper business before planning an exit
Joelfu com
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