Early Stage Funding
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This document outlines the typical stages of company development from early stage to exit, including activities, funding stages, and purposes at each stage. It provides an overview of the Discovery stage where founders form a team, validate a problem and solution, create a minimum viable product, and seek early financing. The Validation stage focuses on refining the product, achieving early user growth and funding, while the Efficiency stage optimizes business models and customer acquisition processes. Later stages aim to drive growth aggressively through scaling revenues.
Early Stage Funding
- 1. Early Stage Funding February 27th, 2013 Marc Castel marc.castel@communitech.ca
- 2. Company Development Stages Months 7 11 17 25 INTAKE EXIT Discovery Bright Ideas Validation 3 Beta Efficiency Commercial Scale Revenues Customers Demo
- 3. Purpose Months 7 11 17 25 validating solving a early validation that people are re鍖ne business model and improve drive growth very aggressively. Purpose meaningful problem and interested in product and willing to efficiency of customer acquisition whether anybody would pay process. hypothetically be interested in solution. INTAKE EXIT Discovery Bright Ideas Validation 3 Beta Efficiency Commercial Scale Revenues Customers Demo
- 4. Activities Months 7 11 17 25 validating solving a early validation that people are re鍖ne business model and improve drive growth very aggressively. Purpose meaningful problem and interested in product and willing to efficiency of customer acquisition whether anybody would pay process. hypothetically be interested in solution. INTAKE EXIT Discovery Bright Ideas Validation 3 Beta Efficiency Commercial Scale Revenues Customers Demo Founding team is formed, Re鍖nement of core features, Value proposition re鍖ned, Large A Round, many customer interviews initial user growth, metrics and user experienced overhauled, massive customer acquisition, are conducted, analytics implementation, conversion funnel optimized, back-end scalability value proposition is found, seed funding, viral growth achieved, improvements, minimally viable products 鍖rst key hires, repeatable sales process and/or 鍖rst executive hires, Activities are created, pivots (if necessary), scalable customer acquisition process implementation, team joins an accelerator or 鍖rst paying customers, channels found. establishment of departments. incubator, product market 鍖t. Friends and Family financing round, 鍖rst mentors & advisors come on board.
- 5. Funding Stages Months 7 11 17 25 Founders: $150k Seed: $600k Angel: $900k Series A: $3,000k INTAKE EXIT Discovery Bright Ideas Validation 3 Beta Efficiency Commercial Scale Revenues Customers Demo Gov Angels Angels Venture Founders Government Government Corporate Family & Friends Debt
- 6. Company Development Stages Months 7 11 17 25 Name Source Terms $Amt Note $150k Summer Company Government Grant 3k .ontariocanada.com/ontcan/ Discovery 1medt/smallbiz/en/sb_ye_s ummerco_en.jsp OCE (college-university) Government Grant 150K oce- ontario.org/programs/comm ercialization- programs/market-readiness JumpStart Government Grant 25k Need matching $ and mentor. Run through AC Others LaunchPad Angel Investment 10-50K Competition CYBF Government Loan 15k Requires 2 yr mentoring cybf.ca BDC Institutional Loan 30k Run through CYBF Hyperdrive Communitech Inv+Loan 40k hyperdrive.communitech.ca Jolt MaRS Investment 30k jolt.marsdd.com Extreme Start-ups Angel Investment 18k extremestartups.com Velocity Philanthropy Grant 25k Competiton velocity.uwaterloo.ca KickStarter Crowd Funding Pre-Sale variable kickstarter.com
- 7. Canadian Hyperdrive Jolt GrowLab Extreme Startup Founder Fuel Velocity Accelerator Centre (Communitech) (MaRS) (Wertz,Brody, (Varma, Sharma) (Ian Jeffrey) (Van Koughnett, (Ellis, Jackson) Accelerators Landa, Bailey) Extreme Ventures Real Ventures Kirkup) (Incubator) and Waterloo (University of Incubators Waterloo Incubator) Location Waterloo Toronto Vancouver Toronto Montreal Waterloo Waterloo / Stratford Type of Company Tech IT, Tech Tech Web & Mobile Tech, full-time Products that can be Communications Internet Web & Mobile Waterloo Student commercialized and entertainment (+ other Tech) within 2 years (ICE) (Cdn residents only) Mentorship 8 EIRs & 50+ Industry 80 Mentors + 25+ Wkly mentorship: 85 entrepreneurs, 6 mentors and 6 In-house advisors Experts & Service sponsor support Founders 1on1, technology, funding, executives, VC, access to (technology, sales, providers, Mentors legal, PR, marketing angels Communitech VSG finances, and Wkly mentorship: & human resources of 8EIRs marketing). Access technology, funding, to 8 Communitech legal, PR, marketing VSG EIRs HR Funding Up to $200K $30K 6-7% Up to $25K 5-10% $18K 6% $10K + $5K/founder $25k Grant - $40K 7% +sponsor perks Possible $150K BDC up to $25k 6% +sponsor perks Networking Excellent Excellent Good Good Good Excellent Excellent Time 3months 4 months 4 months 3 months 3 months Every term 24 months Intakes/x yr 10 / 3x 6-10/ 2x 5-7 Fall 3 / Summers TBD Continuous Intake Program Intensive 1on1s, Presentations, Wkly spealers, Grow Wkly mentorship, lasses, guest Events, workshops, Events, Networking, (all involve U-Build workshops, events, Events, Workshops Conf (fall) wkly product demo speakers, feedback Demo day presentations, your Capital collision, trips, Demo day w/ Extreme Labs sessions w/mentors, workshops, advisory company/product Demo day Showcase Day demo day services, mentoring during prg) Incubation 65,000 / 20,000 sq.ft. 5,500 sq.ft. 3 mos Vancouver Toronto at Extreme Notman House Communitech Accelerator Centre HUB/AC KW MaRS Commons 1 mo SanFrancisco Venture Partners Montreal Garage private and shared NYC / Silicon Valley space Competitive Extremely hands on, Local MaRS TBD - New Several exits TBD-New Excellent early-stage Goal orient program Advantage available 24/7, support, well (2 prior years active) discovery and with accountability full service and networked validation program comprehensive prg
- 8. Comparative Hyperdrive Tech Stars Y Combinator 500 Startups (Communitech) (David Cohen) (Paul Graham) (Dave McClure) USA Accelerators: Location Waterloo Boulder, Boston, Silicon Valley Silicon Valley NYC, Seatle Type of Company Tech Tech Tech Tech Web and Financial services, Software search/social/mobile platforms, productivity, education & language, family & healthcare, web infrastructure Mentorship 8 EIRs & 50+ Industry 400 Once/wk/20min 140 Experts & Service Panels, coaching or on demand EIRs, Speakers & providers, & presentations Mentors Wkly mentorship: technology, funding, legal, PR, marketing HR Funding Up to $200K $6K/founder up $20K 7%+ $10-100K $40K 7% to $18K 6% $100K YM+$50K RC +sponsor perks debt no cap no disc Networking Excellent Excellent Awesome Excellent (Business, VC, Angel) Time 3months 3 months 3 months On-going Intakes/x yr 10 / 3x 10-12 / 4x 40-60 / 2x 25/3x Program Intensive 1on1s, Wkly dinner w/ Wkly dinner w/guest High Touch (all involve U-Build workshops, events, presentations, speaker, prototype Demo Day your Capital collision, Demo day day, demo day, meet company/product trips, Demo day Sequoia day, Events during prg) Incubation 65,000 / 20,000 sq.ft. 10,000 sq.ft None 10,000 sq.ft HUB/AC KW Boulder (in community) Mountain View NYC / Silicon Valley Competitive Extremely hands on, Standardized PG Always on, Vested, well branded
- 9. Company Development Stages Months 7 11 17 25 Name Source Terms $Amt Note $600k Golden Triangle Angel Equity 300k Sept-June Validation AngelNet goldentriangleangelnet.ca Communitech Fund LP Equity/Loan 75k Technology companies communitech.ca Angel One Angel Equity 200k angelonenetwork.ca Investor Network York Angel Angel Equity 200k yorkangels.com Investors Others Georgian Angel Network Angel Equity 150k georgianangelnet.ca Niagara Angel Network Angel Equity 100k niagaraventureforum.com S.W. Ontario Angel Network Angel Equity 100k swoangel.com FedDev IBI Government Loan 0% 999k 1:2 match for projects backed by Angel or CVCA Fed Dev SOFII Government Loan 8% 250k+ Loan to scale to min of 50 employees Rogue Angels & Clubs Private Various 50k+ High net worth individuals Pitch Competitions Various Various 1-50k Laurier Entrepreneurship, TieQuest, etc. Angel List Angel Investment - angel.co
- 10. Company Development Stages Months 7 11 17 25 Name Source Terms $Amt Note $900k Angel Syndicates Angel Equity 1,000k+ For larger deals 500k-1.5m Efficiency MaRS IAF Institutional Conv. debt 500k Ontario emerging Technology companies Golden Ventures Private Venture Equity -500k Mobile Partners IRAP Government Grant 10-250k For various projects, new hires, IP filing, R&D Others Rho Ventures Private Equity Equity 50k Energy, Health, IT, Communications, Media Extreme Venture VC Lite Equity 150k Tech. Provide additional Partners management expertise BDC Sub-Debt Government Sub-Debt 250+ Need $1m annual revenue Expresso Capital SR&ED Factoring Debt Finance SR&ED &MRR Mantella Venture Partners VC Equity Up to Mobile and internet. 500k Hands on managment MaRS BAP Government Grant 20k Embedded Executives and projects OCE Market Government Grant/Equity 190k Commercialization Readiness projects for academia Corporate VC Funds Corporations Various 400k+ Specific shopping lists of technology
- 11. Company Development Stages Months 7 11 17 25 Name Source Terms $Amt Note $3,000k OMERS Ventures Institutional Equity 500++ Lifecycle funder Scale omersventures.com iNovia Capital VC Equity 500++ Technology Companies syndicated A rounds Klass Capital LP Equity 2,000+ High Growth SaaS klasscapital.com BDC Venture Capital VC Equity 1,000+ www.bdc.ca Others Round 13 Capital LP Equity TBD round13capital.com Plaza Corp LP Equity 500+ Technology Companies plazaventures.ca Best Funds LP V. Debt 1000+ Short-term venture debt for tech cos. bestfunds.ca Comerica Investment Bnk V. Debt 1000+ comerica.com Summerhill Venture LP Equity TBD Wireless, digital media, ITC Partners summerhillvp.com Georgian Partners VC Equity 5000+ SaaS Syndicated B rounds georgianpartners.com Tandum Capital VC Equity 5000+ Tech. Mostly B rounds tandemexpansion.com Various Corporations Corporations Acquisition TBD Mostly talent and/or technology acquisition
- 12. Real Tech Example 2007 Dec 2010 Feb 2011 Dec 2011 2013 2014 INTAKE EXIT Discovery Validation Efficiency Scale Founders$ Family & Angels Angels Angels/VC 120k Friends$50k $700k $330k $500k Institutional IAF Series A $500k $2-5m Fed Dev IBI $740k Gvmt Grants Gvmt Grants $136k $223k SR&ED SR&ED SR&ED SR&ED SR&ED $9k $21 $49K $210K $300K