�ݺ�ߣ

Editor's Notes

1. \n
2. \n
3. \n
4. Most common form\n\nEspecially non-tech\n\nPro: easy to convince them. Help get startup off ground\n\nCon: not experienced investors, recognise good vs bad deal, tough to structure\n\nCon: if things go bad, relationship suffers\n\nTough to lose their money. Make risks clear\n\nUsually small raises and 5 – 20%\n
5. \n
6. Increasing number of incubators\n\nY Combinator pioneer in Silicon Valley\n\nGaining recognition: Tech Stars, Seedcamp (Europe), local programs\n\nUsually cash for equity deal + relocation for 3+ months\n\nGenerally $10k - $30k for around 5%\n\nPros: money to eat, meeting mentors, building network, pitching angels in group\n\nCons: moving team, money runs out pretty fast\n
7. \n
8. Usually free money from state / government\n\nIncreasing number as “tech” industry = growth for governments\n\nBut hidden costs: application time, reporting time, constraints, forced partnerships\n\nGrowing in UK. Colombia?\n\nMixcloud story: first grant with QM university\n\nSecond grant with UK radio player\n\nThird grant solo\n\nInvestigate government websites\n
9. \n
10. Non equity finance\n\nCustomers just want product\n\n$ plus 4 bonuses: they give you feedback + report bugs + credibility + repeat revenue\n\nB2B usually find one big first customer. More difficult B2C\n\nChallenge: selling a product before it’s finished\n\nDanger: big customer defines product. Specific needs -> narrow market\n\nDanger: becoming a services culture company. Doesn’t scale\n
11. \n
12. AKA Convertible loans or Convertible notes\n\nThe idea is to convert debt -> equity at a later stage so you don’t need to decide on valuations now\n\nValuation decided at trigger point (usually a raise). Sometimes there is a cap for investors, and usually a discount (eg 20% lower price)\n\nThis is all specified in the terms of the deal/loan\n\nPro: legal + transaction costs usually lower, and valuation decided later\n\n From investors view, less attractive. “Less point taking equity downside without equity upside” but may want to get in deal\n\nAlso debt is senior to equity in a liquidation (although usually nothing left in startup liquidations)\n\nCompensation for investor either a warrant or a discount\n
13. \n
14. Warrant example\n\nWarrant = option to buy stock\n\n
15. \n
16. Valuation cap = fixing the maximum price early stage investors are paying for their shares.\n\nFor example the max valuation at next raise for them will be $2m\n
17. \n
18. Usually VCs invest in “preferred stock” = certain rights, privileges, and preferences to investors\n\nMeans first to get money back if startup flops\n\nDifferent preferences depends on VC, but first in will define the preferences cause none others want less preferred stock\n\nRights could be: \nboard seat\ninformation rights\nright to participate in future rounds to protect their ownership percentage (called a pro-rata right)\nright to purchase any common stock that might come onto the market (called a right of first refusal) \nright to participate alongside any common stock that might get sold (called a co-sale right)\n
19. \n
20. Raise as late as possible -> less dilution\n\nReasonable raising milestones:\nFriends n family - before day 1\nIncubators - idea stage, but often product too now\nGrants - wide range\nCustomers - as soon as possible\nConvertible debt - usually a product\nEquity - usually a product + users (+ revenue)\n\nTraction trumps everything\n\n
21. \n
22. How much to raise? For equity raise work backwards and look at market\n\nInvestors usually take 20 - 35%\n
23. \n
24. Idea to ring fence equity for future employees\n\nUsually 5 - 15%\n
25. \n
26. Network network network\n\nLook for “smart” money - not just $$$\n\nHelps if they know your space + bonus connections for you\n\nGet introductions from fellow entrepreneurs, go to events, read blogs \n\nDo the rounds. They move in packs.\n\nLead investor emerges \n\nThey will expect more due diligence the higher the raise\n
27. \n
28. "In life you don't get what you deserve, you get what you negotiate"\n\nBest negotiation tool is having many investors at the table\n\nTraction helps for B2C\n\nLetters of intent for future B2B businesses\n
29. \n
30. - The most important thing people forget to mention\n\n- Make sure investors + your incentives and motives are aligned\n\n- Ultimately more art than exact science\n
31. \n
32. \n
33. \n