05/04/2013 Financing Tech Startups Robert Ashby Tech Finance Tech Finance Financing Tech Startups Track Record My experience in Tech Funding £20m VC and other fundings £20m Stock Exchange flotation The One Key Issue in Funding £32m trade exit sales 12 millionaires Types of Start-up Funding £532k from £51k investments 2011 started Tech Finance Crowd Funding Tech Finance Tech Finance 1
05/04/2013 Lydiastar Telecommunications Lydiastar Telecommunications £2.0 Computer International Telex Services Millions £1.8 £1.6 Financed by Founder Equity for Cash & PO Creditor £1.4 £1.2 £1.0 Venture Capital Offer £0.8 £0.6 Sold to DHL £0.4 £0.2 £0.0 1 2 3 4 5 Tech Finance Tech Finance Value Added Medical Products Value Added Medical Products Patient Records for Medical Practices £14 Millions £12 P/T FD - Investor - NED £10 £8 £6 3 rounds Venture Capital - £3.5m £4 £2 Fastest Growing company in UK £0 1 2 3 4 5 Sold to Reuters Tech Finance Tech Finance 2
05/04/2013 Laser positioning for AGVs in Factory Automation Sensors for offshore Oil & Gas Electronic Monitoring for government criminal justice programs Tech Finance Tech Finance 1999-2003 2004-2008 £3.5 Millions £14 Millions £3.0 £12 £2.5 £10 £2.0 £8 £1.5 £6 £1.0 £4 £0.5 £2 £0.0 £0 1 2 3 4 5 1 2 3 4 5 Tech Finance Tech Finance 3
05/04/2013 YOU & YOUR IDEA Tech Finance Tech Finance Valuing Ideas Making your business a Magnet for Money = Tech Finance Tech Finance 4
05/04/2013 Getting the best value for your business: PROFIT When you want to raise finance CASH When you want to sell it -> the really large value VALUE Tech Finance Tech Finance Company Value Company Value Financial Value What is important to investors? What return on investment does it give? (At what risk?) Strategic Value Strategic Value How can it transform an acquirer’s business? Tech Finance Tech Finance 5
05/04/2013 STRATEGIC VALUE Date Round Investment % Sold Valuation Profit 01-Mar-10 Seed $500,000 25% $2,000,000 0 01-Jan-11 VC Series A $7,000,000 28% $25,000,000 0 03-Apr-12 VC Series B $50,000,000 10% $500,000,000 0 06-Sep-12 Facebook Acquisition $1,000,000,000 100% $1,000,000,000 0 Tech Finance Tech Finance Types of Funding Equity Funding (Time) Equity - Time Equity - Cash Founder(s) Loans Asset Finance Family & Friends Tech Grants & Awards Partner Product Development Mentors Sales Tech Finance Tech Finance 6
05/04/2013 Equity Funding (Cash) Business Angels Founder(s) Random Individuals Family & Friends Regional Groups - National Groups Business Angels/Networks EIS/SEIS Funds Regional Funds Angel based Accelerators - Oxygen UK Business Angels Association - Angel News Venture Capital Funds AngelCoFund Crowdfunding Tech Finance Tech Finance Business Angels Crowdfunding ISSUES Angels need herding Costs Many People Web Matching Platform Start-up Projects Varying Amounts Choice of Opportunities One presentation Timescales Diversified Risk Project Validation One place to go No part funding risk Manages Group Transparent process Lead Investor Tech Finance Tech Finance 7
05/04/2013 Crowdfunding Crowdfunding Types Players Donation DONATION indiegogo, buzzbank Project/Reward REWARD Kickstarter, Peoplefund.it LOAN ThinCats, Funding Circle, Rebuilding Society, Loan Zopa EQUITY crowdcube, SEEDRS, FUNDTHEG_P Equity Tech Finance Tech Finance Equity Crowdfunding Crowdfunding 2010 start £5,783,000 funded Approval in Principle: 32,631 members Business Plan, Financial History, Projections 5% charge Create the Pitch: 2012 start Product Introduction, Team, Exit Strategy, EIS status £477,000 funded Business Plan, Financial History, Financial Projections SEIS only Max £150,000 Video 7.5% charge Share offer Tech Finance Tech Finance 8
05/04/2013 Equity Crowdfunding Equity Crowdfunding How long it takes How long it takes - Timing Month: 1 2 3 4 5 6 7 8 PITCH START OPEN CLOSE CASH Business Plan Projections (3 yr) Accounts Year end Jan May June Aug EIS Application Prepare HMRC Crowdfund Application Prepare Approval April Sept Oct Dec Video preparation Record Edit May Oct Nov Jan Upload and edit Pitch Pitch Live Oct Feb Mar May DD & Legals Dec Apr May July £££ Get Money Nov Mar (Easter?) June Feb June (Summer Hol?) Sept Tech Finance Tech Finance Equity Crowdfunding Equity Crowdfunding Key stats How to ensure success Success rate – 15% to 20% (TF Estimate) Social Media Managed Promotion Threshold 38% funded Magnet for Money Site members – 50% of funding 97% of investors say EIS is key Data from: esynergy Tech Finance Tech Finance 9
05/04/2013 Magnets for Money Magnets for Money Identified Customers Problem/pain being solved by you Clear Business Model Disruptive proposition Clear Financial Model Unfair Competitive Advantage/Barriers to Entry Clear Lead Generation & Conversion Process REVENUE Scaling Tech Finance Tech Finance Magnets for Money Magnets for Money Complete management team Management CREDIBILITY IDEAL: Management Leadership experience Management Sector experience Bottom line delivery experience Tech Finance Tech Finance 10
05/04/2013 Investor Turn Offs Crowdfunding Tips Summary Think about Timing & Milestone news Lack of FOCUS: Other time/business interests EIS is key Simple Product based Video One man bands Short Business Plan No sales experience Planned & Managed PR campaign No users yet Social Media/Your network Unproven customer value proposition Get Lead Investor(s) Poor financial track record Watch for Forum posts Tech Finance Tech Finance THANK YOU Tech Finance Tech Finance 11
Recommend
More recommend
