FI Session - Bootstrapping & Fundraising

8/10/2019 FI Session - Bootstrapping & Fundraising

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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

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Solutions



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

https://www.facebook.com/download/1468075746803738/Government%20Schemes%20and%20Startup%20Investors%20in%20SG.xlsx







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

http://yongfook.com/10-reasons-why-i-self-funded-my-startup-and-so-should-you.html



























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




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

http://jfdi.asia/accelerate/terms/

http://jfdi.asia/accelerate/terms/




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

http://www.forbes.com/sites/chancebarnett/2014/05/09/investor-pitch-deck-to-raise-money-for-startups/



















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



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

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Difference Between a Business & a Job

Will your business run itself while

you’re on holiday?

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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

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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)

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Across Industry Valuation

EV/EBITDA : 1-2x EV/EBITDA : 4.28x

(Source: Infinancials)

EV/EBITDA : 10x++

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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

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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



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



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

Documents

FI Session - Bootstrapping & Fundraising