Lunch with the ExpertsToday’s Guests

WPEO Connections

Virginia AlmendarezStartUp CoachIFundWomen

Carolyn RodzTech Founder

Small Business AdvocateAlice

Geri StengelPresident

Ventureneer, LLC

AGENDA

12:00pm Welcome & Introductions

12:05pm A Conversation withVirginia Almendarez, Startup Coach, Ifund WomenCarolyn Rodz, Tech Founder, Small Business Advocate, Alice

Moderated byGeri Stengel, President, Ventureneer LLC

12:35pm Q & A facilitated via Zoom Chat Room

Everything You

Wanted to Know

About Financing But

Were Afraid to Ask

April 14, 2020

Presented by Geri Stengel

2 © 2015 Ventureneer. All rights reserved.2019 Ventureneer. All rights reserved.

Your Business Goal Will Shape Your Financing Choices

• Small business

• High growth

• Scaling company

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Deconstruct Your Funding Needs

• The stage of your company

• The size of the market you are

targeting

• The potential of your offering

• How fast do you want to grow?

• How much money you need?

• When will you reach profitability?

• What will you use the money for?

4 © 2015 Ventureneer. All rights reserved.2019 Ventureneer. All rights reserved.

Your Financing Options

Seed Startup Early Growth Sustained Growth

Reg A+, Mini IPO ✓ ✓

Venture Capital ✓ ✓

Angel Investors: Offline or Online ✓ ✓

Alternative financing ✓ ✓ ✓

Loan CDFI CDFI, Direct Lender, SBA Bank, SBA, CDFI, Credit Union, Alternative Finance Bank, SBA, Alternative Finance

Reg CF, Intrastate Crowdfunding ✓ ✓

Rewards-based Crowdfunding ✓ ✓ ✓ ✓

Incubators/Accelerators ✓ ✓

Grants (SBIR, STTR, and local eco dev agencies/Competitions)

✓ ✓

Kiva ✓ ✓ ✓

Credit Cards ✓ ✓

Friends & Family ✓ ✓

Self ✓ ✓ ✓ ✓

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Capital: Cost and Ease of RaisingA

fford

abili

ty

High

High

Low

Grants Competitions

Venture Capital

Angels

Accelerators - Equity

Alternative Finance

Credit Cards

Rewards Crowdfunding

Reg CF

$ With Benefits

Personal Savings

Friends & Family

Accelerators +

Incubators - Fees

Mortgages

Bank Loans

SBA Loans

CDFI Loans

$ With Risks

Accessibility

Legend

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Grants

• Free money

• Restrictive

• Time and effort

• Slow

• Highly competitive

• Strings attached

Photo: Nicolas Picard on Unsplash

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Competitions

• Free money

• A time to reflect

• Practice makes perfect

• High-quality advice

• Bragging rights

• Time and effort

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Friends and Family

• Motivated by love not profit

• Greater flexibility and lower terms

• Formalize the relationship and terms

• Can you face this person at Thanksgiving if you lose their money?

• Do not give too much equity away at the early stage, as it will make it more difficult to attract later stage investors

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Accelerator Programs

• Some provide money

• Skills development

• Access to mentors,

investors, and customers

• Risk management advice

• Motivation and emotional

support, especially through

peers

• Support after the program

ends

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Equity Financing for Scaling Companies

• Equity financing: Shares in

exchange for money. ROI through

acquisition or IPO

• Angels: Accredited investors —

net worth $1 M+. Or, income

$200,000+. It’s the angel’s money

being invested

• Venture capital: Limited partners

invest in a fund. Fund has a

thesis. It’s other people’s money

being invested

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Must Haves: Angel and Venture Capital

• Target a large, lucrative market

• Address a big market opportunity

• Project a maximum return on investment

• Need outside money to scale

• Have market traction

• Differentiate yourself from your competition

Photo by Nina Uhlíková from Pexels

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Pros and Cons: Angels and Venture Capital

✓

• Less financial risk for you

• Business expertise and

connections

• No monthly payments

×

• Giving up ownership

and control of company

• Time and effort

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Where to Find Angels and VCs

• Referrals from trusted sources, such as the founders,

investors, or lawyers

• Demo days and pitch competitions

• Angel club meeting

• Trade conferences

• College alumni investor groups

• Online platforms, such as

AngelList, CircleUp, Gust,

OurCrowd, and SeedInvest

• The Fundery Database of VCs

predominantly investing in women

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Tips for Succeeding With Angels and Venture Capitalists

• Put together a top-notch

team

• Be prepared to give up a

board seat

• Connect personally

• Be coachable

• Show your passion

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Types Of Debt

• Lines of credit

• Term loan

• Credit cards

• Mortgage ‒ personal

• And more

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The 5 Cs of Traditional Credit

• Credit score

• Character

• Capital

• Capacity

• Collateral

• Conditions

https://we.nyc/master-your-money/babson-tool/

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Pros and Cons: Debt

✓

• Maintain ownership of

your business

• Tax deduction

×

• Repayment

• Need for cash flow

• Cost of capital varies by

source

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Where to Find Loans and Other Forms of Debt

• Kiva — no interest

• Banks — traditional and

community

• Credit unions

• CDFIs

• Alternative lenders

• Online lenders

• Crowdfunding

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Community Development Financial Institutions (CDFIs)

Fund underrepresented

small businesses

• Women

• Minorities

• Rural communities

• Low income

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SBA Guaranteed Loans

• Provided by banks, CDFIs,

credit unions, and alternative

lenders

• Partially guaranteed by the US

Government

• Need to have cashflow

• Strong plan with projections

and assumptions

• Rejected by a bank

• Takes a longer time to get

approved

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Alternative Finance

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Alternative Financing

• Merchant Cash Advance: Is when a financer provides money in return for a percentage of

the company’s future credit card sales.

• Revenue Cash Advance: Are like merchant cash advances, except for companies that don’t

do much in the way of credit card sales. In this case, companies pay back the financier

through a direct deposit of a relatively small amount daily.

• Receivables Based Financing: You can borrow against either their entire accounts

receivable balance or individual invoices. Receivables based financing is popular

because once you get approved, you can get funding immediately whenever you need to

borrow, and because the interest rates are usually lower than merchant or revenue cash

advances.

• Accounts Receivable Factoring: Factors buy your invoices at a discount, often 5%, and

then your customer pays the factor directly when the invoice is due. The implied annual

interest rate can be high with accounts receivable factoring, but the financial technology now

available means that businesses have a lot more flexibility in choosing when and how much

to borrow.

• Contract financing: Is a way for your business to receive a cash advance on work you have

yet to perform. It is collateralized by a contract between your company and your customer.

• Equipment financing: is the use of a loan or lease to purchase or borrow hard assets for

your business. This type of financing might be used to purchase or borrow any physical

asset, such as a restaurant oven or a company car.

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Pros and Cons: Alternative Financing

✓

• Quick and easy application

process

• Funds can be available

quickly

• You can secure financing

even if you have no credit or

subpar credit

• You can use the funds

however you see fit

• You can develop a

relationship with a lender

and get lower rates over

time

•

ו Interest rates can be high

• You may only be able to

get a large loan

• Lenders may go out of

business

• You may not get any

discount if you repay your

loan early

• There may charge hidden

fees

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Rewards-Based Crowdfunding

• Seeking funding from the people who want your product

and often you’re pre-invoicing for the product

• Better for companies that have products and are aimed at

consumers

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Pros and Cons: Rewards-Based Crowdfunding

✓

• Debt- & equity-free money

• Insight into the market

• Validation

• Customer engagement

• A marketing boost

• Funding for companies

that are pre-seed to

mature

• One financing option

women outperform men

ו It takes time and effort

• It takes money

• There are often unanticipated

costs

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Tips for Succeeding at Rewards-Based Crowdfunding

• Build your network first

• Research which crowdfunding platform is the right fit for you

• Rewards matter

• Do a pitch video

• Put the “Why” into your story

• No one-size fits all. Experiment

• Show momentum

• Provide updates

• Money and effort grease the wheels of a success

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Regulation Crowdfunding (Reg CF)

• Enabled by Title III of the

JOBS Act in 2016

• Raise up to $1M before,

during, or after a VC

round from your

community including Main

St investors

• Best for B2C companies

in consumer tech, health

tech, edtech, AI, AR/VR,

blockchain, food &

beverage, retail, and

cannabis

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Pros and Cons: Rewards-Based Crowdfunding

✓

• Engages and expands

your user/customer base

• Provides a marketing

boost

• May provides future

fundraising leads

• Maintains company control

— one line on cap table (if

using a Crowd Safe), no

voting or information rights

ו There are quite a lot legal

and public disclosure

requirements

• It takes quite a bit of

bandwidth from founders to

execute a successful

campaign

• It takes money

• Some follow on funders diss

Reg CF

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Tips for Succeeding at Regulation Crowdfunding

• Build your network first

• Research which crowdfunding platform is the right fit for you

• Marketing matters

• No one-size fits all. Experiment

• Show momentum

• Provide updates

• Money and effort grease the wheels of a success

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Tools of the Trade

• Marketing: Elevator pitch

• Financials: Statements,

Assumptions

• Business Fundamentals:

Investor Deck, Executive

Summary

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Financials

1. Make financial

statements conventional

2. Cover past (if available)

and future

3. Do monthly for first 12

months then annually for

year 2 & 3

4. Project realistic numbers

5. Consider several

scenarios

6. Include what’s important

and summarize the rest

7. Explain your

assumptions

8. Consult a professional

9. Ensure that numbers

reconcile

10.Ensure that numbers

reconcile

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Investor Deck

1. Be brief

2. Be organized

3. Arouse interest

Immediately

4. Provide substance• Define the market and its

potential

• Solve a problem:

• Turn the problem into

opportunity

• Analyze your competition and

state your advantage

• Describe the business

• Marketing strategy

5. Project solid management

expertise:

6. Conclude with a call to

action

7. Make Your presentation

tangible

8. Make your slides readable

9. Prepare and practice

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Questions

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Resources

General

• The Nuts And Bolts Of Starting And Financing A Business

Grants

• Grants.gov — A database of all federally sponsored grants.

• Small Business Innovation Research (SBIR) and Small Business Technology Transfer

(STTR) Federal agencies providing grants: Departments of Agriculture, Department of

Commerce - National Institute of Standards and Technology and National Oceanic and

Atmospheric Administration, Department of Defense, Department of Education,

Department of Energy, Department of Health and Human Services, Department of

Homeland Security, Department of Transportation, Environmental Protection Agency,

National Aeronautics and Space Administration, and National Science Foundation

• State and local. Best to search for grants at the state and municipal levels.

Accelerators

• Seed programs

• University programs

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Resources

Equity Financing

• The Next Decade Will Bring More Venture Capital To Female Founders

• Learning The Language Of Investors Enabled This Founder To Raise $15 Million Dollars

• Get Backed: Craft Your Story, Build the Perfect Pitch Deck, and Launch the Venture of Your Dreams by Evan Baehr and Evan Loomis

• Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld and Jason Mendelson

• How Female Founders Can Crack The Funding Code

• What is a convertible note

• The good and the ugly of convertible debt financing

• SAFE vs KISS, the evolution of the convertible note

• How And Why Professional Angels Invest Time In Meeting Women Entrepreneurs

• 10 Ways To Win An Investment From An Angel

• How Women Angels Are Good For Innovation And The Economy

• Want Venture Capital? Here Are 10 Must-Haves

• The Fundery: The Essential Venture Capital Database for Women Entrepreneurs

• Support Strengthens For Female-Founded Companies And Venture Funds

• How Women Angels Are Good For Innovation And The Economy

36 © 2015 Ventureneer. All rights reserved.2019 Ventureneer. All rights reserved.

Resources

The Downside of Venture

• How Founders Take Back Their Companies Without Angering Investors

• Five Ways Founders Can Avoid Breakups With Their VCs

• How To Ensure An Angel Or VC Is The Right Match For You

Using Multiple Forms of Financing

• How This Founder Went From Serving People With Lyme Disease To Serving The One In Three People With Chronic Conditions

• Grit: The Entrepreneurial Quality Of Successful Black Female Founders

• Female Founder Provides Small Loans To Help College Students Avoid Dropping Out

• How To Raise Capital When Your Company Does Well By Doing Good

Kiva ─ Crowdfunding Light

• Raising Money With a Little Help From Your Friends

Rewards-based Crowdfunding

• How Your Small Business Can Raise Money From Its Community

• How To Blow Past Your Crowdfunding Goal Using Female Empowerment

• 8 Tips For Crowdfunding Success

• Crowdfunding Is A Female Founder's Best Friend

37 © 2015 Ventureneer. All rights reserved.2019 Ventureneer. All rights reserved.

Resources

Regulation D Rule 506(c), Title II of the JOBS Act

• Stand Out in the Crowd: How Women (and Men) Benefit From Equity Crowdfunding

Regulation Crowdfunding (Reg CF)

• This Startup Addresses Social Distancing With An Engaging Experience For Kids And

Their Relatives

• The Government Shutdown Grounds A Drone-Focused Unicorn

• How Reg CF Closes the Financing Gap for Women Entrepreneurs

• How Your Small Business Can Raise Money From Its Community

Bank Financing

• Grasshopper Ain’t Your Grandma’s Commercial Bank

Alternative Financing

• Alternative Financing Helps Health Startup Grow

• Closing The Small Business Financing Gap: Invoice Factoring Basics

• Closing The Small Business Financing Gap: The ABCs Of Merchant Cash Advance

• New Options Close the Financing Gap For Women Entrepreneurs In The Next Decade

Revenue Based Financing (Can be an alternative to equity financing)

• Finding Growth Capital Does Not Have To Be A Challenge For Female Founders

• Growing Companies Have Financing Alternatives

38 © 2015 Ventureneer. All rights reserved.2019 Ventureneer. All rights reserved.

Resources

Online Lenders

• Kabbage: The Care And Feeding Of A Fintech Unicorn

Community Development Financial Institutions (CDFIs) Loans

• CDFI Locator

• How Women Can Get The Loans Their Businesses Need

• When Big And Small Business Pay It Forward, Communities Thrive

• Money's There If Small Businesses Know Where To Look

• Affordable Financing from a Trusted Source to Start and Grow Your Business

• Think You Don’t Qualify for Small Business Financing? Think Again

Interest Free Loans

• Women Become Financiers To Disrupt The Funding Landscape For Entrepreneurs(SheEO)

• How A Woman Entrepreneur Relied On Persistence And A 'SheEO Loan' To Bring Solar Energy To Haiti (SheEO)

• Persistence Is The Key To Entrepreneurial Success (SheEO)

• Raising Money With a Little Help From Your Friends (Kiva)

Women Funding Women

• Five Ways Women Will Get Women The Funding They Need In 2019

• How More Women Are Stepping Up To Fund Women Entrepreneurs In 2018

39 © 2015 Ventureneer. All rights reserved.2019 Ventureneer. All rights reserved.

Connect With Me

• http://www.forbes.com/sites/geristengel/

• @ventureneer

• http://www.linkedin.com/in/geristengel

• http://www.facebook.com/Ventureneer

• geri@ventureneer.com

Why smart women

are crowdfunding

For women who have big ideas, we’re

here to make them happen.

IFundWomen is a startup funding platform providing access to

capital through crowdfunding and grants, expert business coaching

on all the topics entrepreneurs need to know about, and a network

of women business owners that sparks confidence, accelerates

knowledge, and ignites action.

A HOLISTIC APPROACH TO FUNDRAISING

Coaching ConnectionsCreative Crowdfunding

+ Grants

WHAT IS CROWDFUNDING?

Crowdfunding is when you raise

small increments of money, from

lots of people that you know, that

adds up to just enough money to

achieve a specific goal.

WHY SMART WOMEN ARE CROWDFUNDING?

1

2

3

4

5

6

7

8

Prove demand

Build prototype

Pre-tail product/service

Drive sales + marketing

Raise pre-seed round

Build buzz + awareness

Don't want venture capital

Avoid going into debt

THE IFUNDWOMEN METHOD

PITCH

HONING

a clear, concise pitch

that explains the problemyou are solving and your

solution

1

NETWORKMAPPING

know who is going tobuy your product

or services

2

REWARDSSTRATEGY

the products, services,

and content you aregoing to sell

3

ACCOUNTABILITY

TRACKER

stay on task, every singleday of your campaign

4

It's all about the prep

School budgets alone could not

fund our dance program, so we

needed to raise funds in order

to continue our assemblies.

— MARISA HAMAMOTO

SEEKING ALTERNATIVE SOURCES OF FUNDING

We needed to keep our

business open and grow our

programming.

— CLAIRE WASSERMAN

AVOID DEBT OR GOING OUT OF BUSINESS

Now, go get funded.