funding for innovative startups - part 2 of 5
TRANSCRIPT
SESSION TWO: MILESTONE FUNDING & FUNDING NEED
Benno Groosman MScBA – www.groosman.info – Athens, February 24 –
MASTERCLASS FUNDING FOR INNOVATIVE STARTUPSBenno Groosman MScBA – www.groosman.info – Athens, February 16 – Orange Grove
MASTERCLASS SCHEDULE
Session 1: Introduction to funding language + business planning;
Session 2: Determining funding need + milestone-based funding;
Session 3: Building your financial investment plan;
Session 4: Investor readiness;Session 5: Advanced funding and wrap-up.
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FUNDING MASTERCLASS
IN THIS PRESENTATION
Do you need investor funding?Value-adding activitiesMilestone-based funding Your funding need and match with stagesWhat’s next?
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FUNDING MASTERCLASS
DO YOU NEED INVESTOR FUNDING?
First, get money from:Selling your test product;Make customers pay in advance (or sell MVP);Use government subsidies and grants;Consultancy (but don’t loose your focus!); (Ask to) pay your suppliers later.
... TO BE ABLE TO MAKE A BETTER DEAL.www.groosman.info
FUNDING MASTERCLASS
VALUE-ADDING ACTIVITIES
Investors don’t like to pay for marketing, big office space and high salaries. They want to build the business by investing in prototypes, production, sales, patents, strategic positions etc.
Use all funding to increase the valuation of your venture.
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FUNDING MASTERCLASS
VALUE-ADDING ACTIVITIES/RESULTSWork on prototype (R&D)Direct customer acquisitionSuccessful patent applicationsStrategic partnerships Improve product/market fitClear go-to-market strategy Improve your team… and more
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FUNDING MASTERCLASS
VALUE-ADDING ACTIVITIES/RESULTS
Not: beautiful logo, business cards and websiteNot: a great CRM system without customersNot: adding more and more features to productNot: visiting events or exhibitions without a clear goal and result
Not: Facebook likes or blog readers you didn’t monetize
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FUNDING MASTERCLASS
VALUE-ADDING ACTIVITIES/RESULTS
What should YOU do to add value to your startup? www.groosman.i
nfo
FUNDING MASTERCLASS
FUNDING NEED AND STARTUP STAGE
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FUNDING MASTERCLASS
FUNDING FROM EARLY TO LATER STAGEFriends, family and foolsGovernments, universities, larger companiesCrowdfunding and crowd-investingBusiness angels (informal investors) Launching customersVenture capital fundsPrivate equity / IPO / exit… and more
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FUNDING MASTERCLASS
FUNDING NEED AND STARTUP STAGE
Do you know what source of money fits your startup stage?
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MY DEFINITION: MILESTONE
A milestone is the concrete achievement of a significant step in your venture planning, which adds financial value to your venture.
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FUNDING MASTERCLASS
MILESTONE-BASED FUNDING
Define the milestones in your startup planDetermine the amount of money and time you need to reach each milestoneMatch milestones with available funding sourcesCan you combine the milestones for funding?
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FUNDING MASTERCLASS
MILESTONE-BASED FUNDING QUICK SHEET
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FUNDING MASTERCLASS
MILESTONE-BASED FUNDING QUICK SHEET
Download at:www.groosman.info/#!funding/cbvu
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FUNDING MASTERCLASS
www.groosman.info
FUNDING MASTERCLASS
MILESTONE-BASED FUNDING QUICK SHEET
Take 10 minutes to fill in the sheet and 15 minutes to discuss with your neighbor. www.groosman.i
nfo
FUNDING MASTERCLASS
MILESTONE-BASED FUNDING
It’s easier to get milestones funded than activities or the total costs for years in the future
Milestones make you and your financers focus on the big picture, instead of daily operations
It’s possible to secure the funding of different milestones by combining the commitment of different (types of) funding sources in advance: you could capture these in one investment contract (with options)
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FUNDING MASTERCLASS
FUNDING NEED
Ask the money that you really need, not too little,and about 10-20% extra for unforeseen expenses,to achieve the milestone(s) you are aiming for.
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FUNDING MASTERCLASS
SNEAK PREVIEW NEXT SESSION
In order to raise money you have to show financial projections for the future
For these projections you have to make estimates of costs and revenues
In new ventures these estimates are assumptions
The number is not the most important, the assumptions you made to get to this number is!
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FUNDING MASTERCLASS
FOLLOW ME
Benno Groosman MScBAExperienced startup entrepreneurwww.groosman.info
www.groosman.info
FUNDING MASTERCLASS