FORMS OF FUNDING FOR STARTUPS

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  • MICHAL GROMEK PONTUS ENGSTRM1320 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

    http://www.slideshare.net/MichalGromek/introduction-to-financial-voodoo-for-startups

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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

  • 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

  • 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)

    https://www.youtube.com/watch?v=ryHBXTG87es

  • 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

    https://www.youtube.com/watch?v=aNfB4sBBwEc

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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

  • 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

    http://europa.eu/rapid/press-release_IP-16-3882_en.htm

  • 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)

  • 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 (!)

  • 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

  • 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

  • 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

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