Financing Tech Startups Robert Ashby Tech Finance Tech Finance - - PowerPoint PPT Presentation

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Financing Tech Startups Robert Ashby Tech Finance Tech Finance - - PowerPoint PPT Presentation

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


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05/04/2013 1

Tech Finance

Financing Tech Startups

Robert Ashby

Tech Finance

Financing Tech Startups My experience in Tech Funding The One Key Issue in Funding Types of Start-up Funding Crowd Funding

Tech Finance

Track Record £20m VC and other fundings £20m Stock Exchange flotation £32m trade exit sales 12 millionaires £532k from £51k investments 2011 started Tech Finance

Tech Finance

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05/04/2013 2

Tech Finance

£0.0 £0.2 £0.4 £0.6 £0.8 £1.0 £1.2 £1.4 £1.6 £1.8 £2.0 1 2 3 4 5 Millions

Lydiastar Telecommunications

Lydiastar Telecommunications

Computer International Telex Services Financed by Founder Equity for Cash & PO Creditor Venture Capital Offer Sold to DHL Tech Finance Tech Finance

£0 £2 £4 £6 £8 £10 £12 £14 1 2 3 4 5 Millions

Value Added Medical Products

Value Added Medical Products

Patient Records for Medical Practices P/T FD - Investor - NED 3 rounds Venture Capital - £3.5m Fastest Growing company in UK Sold to Reuters Tech Finance

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05/04/2013 3

  • Laser positioning for AGVs in Factory Automation
  • Sensors for offshore Oil & Gas

Tech Finance

  • Electronic Monitoring for government criminal justice programs

Tech Finance Tech Finance

£0.0 £0.5 £1.0 £1.5 £2.0 £2.5 £3.0 £3.5 1 2 3 4 5 Millions

1999-2003

Tech Finance

£0 £2 £4 £6 £8 £10 £12 £14 1 2 3 4 5 Millions

2004-2008

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05/04/2013 4

YOU & YOUR IDEA

Tech Finance Tech Finance

Valuing Ideas

=

Tech Finance

Making your business a Magnet for Money

Tech Finance

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05/04/2013 5

PROFIT CASH

VALUE

Tech Finance

Getting the best value for your business: When you want to raise finance When you want to sell it

  • > the really large value

Tech Finance

Company Value Financial Value

What return on investment does it give? (At what risk?)

Strategic Value

How can it transform an acquirer’s business? Tech Finance

Company Value What is important to investors?

Strategic Value

Tech Finance

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05/04/2013 6

Tech Finance

STRATEGIC VALUE

Tech Finance

Date Round Investment % Sold Valuation Profit 01-Mar-10 Seed $500,000 25% $2,000,000 01-Jan-11 VC Series A $7,000,000 28% $25,000,000 03-Apr-12 VC Series B $50,000,000 10% $500,000,000 06-Sep-12 Facebook Acquisition $1,000,000,000 100% $1,000,000,000

Types of Funding Equity - Time Equity - Cash Loans Asset Finance Tech Grants & Awards Partner Product Development Sales

Tech Finance

Equity Funding (Time) Founder(s) Family & Friends Mentors

Tech Finance

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05/04/2013 7 Equity Funding (Cash) Founder(s) Family & Friends Business Angels/Networks Regional Funds Venture Capital Funds Crowdfunding

Tech Finance

Business Angels

Random Individuals Regional Groups - National Groups EIS/SEIS Funds Angel based Accelerators - Oxygen UK Business Angels Association - Angel News AngelCoFund

Tech Finance

Business Angels

ISSUES Angels need herding Costs Timescales Lead Investor Tech Finance

Crowdfunding

Many People Web Matching Platform Start-up Projects Varying Amounts Choice of Opportunities One presentation Diversified Risk Project Validation One place to go No part funding risk Manages Group Transparent process

Tech Finance

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05/04/2013 8 Crowdfunding

Types Donation Project/Reward Loan Equity Tech Finance

Crowdfunding Players

DONATION indiegogo, buzzbank REWARD Kickstarter, Peoplefund.it LOAN ThinCats, Funding Circle, Rebuilding Society, Zopa EQUITY crowdcube, SEEDRS, FUNDTHEG_P Tech Finance

Equity Crowdfunding

2010 start £5,783,000 funded 32,631 members 5% charge 2012 start £477,000 funded SEIS only Max £150,000 7.5% charge Tech Finance

Crowdfunding

Approval in Principle: Business Plan, Financial History, Projections Create the Pitch: Product Introduction, Team, Exit Strategy, EIS status Business Plan, Financial History, Financial Projections Video Share offer

Tech Finance

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05/04/2013 9 Equity Crowdfunding

How long it takes Tech Finance

Month: 1 2 3 4 5 6 7 8 Business Plan Projections (3 yr) Accounts Year end EIS Application Prepare HMRC Crowdfund Application Prepare Approval Video preparation Record Edit Upload and edit Pitch Pitch Live DD & Legals Get Money

£££

Equity Crowdfunding

How long it takes - Timing Tech Finance

Jan May June Aug April Sept Oct Dec May Oct Nov Jan Oct Feb Mar May Dec Apr May July Nov Mar (Easter?) June Feb June (Summer Hol?) Sept CASH CLOSE PITCH OPEN START

Equity Crowdfunding

Tech Finance

Key stats

Success rate – 15% to 20%

(TF Estimate)

Threshold 38% funded Site members – 50% of funding 97% of investors say EIS is key

Data from: esynergy

Equity Crowdfunding

How to ensure success Social Media Managed Promotion Magnet for Money Tech Finance

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05/04/2013 10 Magnets for Money

Problem/pain being solved by you Disruptive proposition Unfair Competitive Advantage/Barriers to Entry Scaling

Tech Finance

Magnets for Money

Identified Customers Clear Business Model Clear Financial Model Clear Lead Generation & Conversion Process REVENUE

Tech Finance

Magnets for Money Management Management Management

Tech Finance

Magnets for Money

Complete management team

CREDIBILITY

IDEAL: Leadership experience Sector experience Bottom line delivery experience

Tech Finance

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05/04/2013 11 Investor Turn Offs Lack of FOCUS: Other time/business interests One man bands No sales experience No users yet Unproven customer value proposition Poor financial track record

Tech Finance

Crowdfunding Tips Summary Think about Timing & Milestone news EIS is key Simple Product based Video Short Business Plan Planned & Managed PR campaign Social Media/Your network Get Lead Investor(s) Watch for Forum posts

Tech Finance Tech Finance

THANK YOU

Tech Finance