The Importance of Smart Money: What a Startup Should Look For on

Top of Just Cash?

Lotus 9/ AIESEC 15th of December, 2012 @ RBS

Do Startups Need Money?

• YES, but...

• What kind of a startup are you?

– Lifestyle business (SME)

or

– Buyable startup

or

– Scalable startup

Small Business vs. Scalable Startup

Where’s the Money?

Lifestyle

Scalable

Starting-up Maturity

Founders +

FFF

Seed/ Start-up

Funds and Business

Angels

Venture Capital Funds

Private Equity Funds

Money: Degree of Wisdom

• FFF

• Bank Loans

• Public (government) money, especially grants

• Business Angels

• Seed Funds

• VC Funds

• Industrial Investors

SMART

DUMB

Smart Money: What’s in it?

• Experience

– Have seen all the mistakes you will make

– Have developed best practices

• Contacts

– Industry

– International

• Loyalty & goal alignment

• ... and Money...

Incubators & Accelerators

• Business Incubator

– An infrastructure-centered concept

– Basically, a grant (subsidy) with a focus

• Technology Incubator

– A funding-centered concept

– Attempt of “smart-inizing” of (mostly) public funding

• Startup Accelerator

– Boot camp of startups coupled with smart money

Funding Scene in Latvia

• Direct Grants

• Business Incubators (Regions + Riga Creative Industries Incubator)

• Banks, including LHZB special programs

• Non-bank/ junior lenders

• Micro-Angels

• Seed (Imprimatur Capital) and VC (BaltCap) funds

Summary: What’s the Strategy?

• Decide on startup type

• Decide on business model

• Look for the resources’ needs and gaps to fill

• Look for what’s going on in (your) funding market

• Go out and raise financing STRATEGICALLY

A Word on TechHub Riga

• TechHub is NOT an incubator!

• TechHub is a collocation space (joint office) for tech startups, funded by memberships and sponsors

• TechHub is a focal point of tech startup community in LV, active in promoting of startup culture

Questions Welcome!

viesturs@techhub.com