Fueling( Funding) Your Startup By Ganesh Natesan
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About 38% of startup company fails within 3 years due to lake of funding. Funding a startup is critical at every stage be it as seed fund such as raising initial fund from friends and families, or angel investments, even at the later stages of series A, series B etc., funding to attract talent, accelerate the growth, capture international market, when the growth is stable, looking for timing and opportunity to become publish company or choose to merge with large enterprise with win-win synergy. This was the presentation given to students at PSG - Coimbatore
Fueling( Funding) Your Startup By Ganesh Natesan
- 4. Life Cycle Start-up is a company undertaken by an entrepreneur to seek, develop, and validate a scalable business model
- 7. Angel Investor A Wealthy Individual interested in your idea and ROI Many angels are successful entrepreneurs, you can expect connections and sound advice You can expect 1 lack to 10 Lacks Caution: You may loose decision making power
- 8. VC FUNDING : SERIES A ACCELERATE COMPANY GROWTH ATTRACTING NEW TALENT CROSS PRODUCT MILESTONES
- 9. VC FUNDING : SERIES B, C, D.. GROWTH CAPITAL FOR VIRAL GROWTH OVER A LONG PERIOD RAPID CUSTOMERS GROWTH, EXPECTED REVENUE GROWTH , PROFITABILITY $20M - $1OOM FUNDING NEED > $250M - VALUATION
- 10. Ready with a plan, before you ask for fund Problem Solution Why you Market Size Financial Projection ASK
- 12. Its determined by market.. What is your companys worth?
- 13. Stages Funding Basis Funding Size Valuation Size Funding Source Ideation Idea Attraction And Market size $25k $100k $250K to $500k Bootstrap, F & F ,Angel/ Seed Funds Validation Execution Capability of founders $100k - $250 $500k to 1.5M Bootstrap, F & F ,Angel/ Seed Funds Early Traction A successful working model or product/service $250k- $500k $2M- $5M Angel /Seed Funds Scaling Customer Adoption, Cash Flows $1M - $5M $5M- $20M Angel/ Seed Funds/VC Rapid Customer Adoption Market Share, Revenue grow estimate $5M - $20M > $50M Series A ( 1 to many VCs ) Growth Capital for viral Growth over a long period Rapid Customers growth, Expected Revenue Growth , Profitability $20M - $1OOM > $250M Series (B,C,D,E.,) PE firms and VCs will exit Stable Growth Exit Strategy (IPO / Get Acquired )
- 14. Valuation Methods Discounted Cash Flow (DCF) Cost Approach (to build or replace) Comparable
- 15. DCF
- 16. A Case Study - Uber Funding Rounds
- 17. Exit strategy
- 18. Thanks
- 19. The Ask $50,000
- 20. Sample financial projection StreamChain: 5 Year Projections Year 1 Year 2 Year 3 Year 4 Year 5 New Wells Deployed 0 45 100 250 500 New Web Portal Licenses 0 3 10 25 50 Total Number of Employees 3 6 15 15 15 Revenue Web Portal Licenses Sales - $ - $ 250,000.00 $ 625,000.00 $ 1,250,000.00 $ Hardware/Software Sales - - 750,000 1,500,000 3,000,000 - - $1,000,000 $2,125,000 $4,250,000 Variable Expenses COGS 39,900 361,300 478,000 1,132,000 2,222,000 Gross Income ($39,900) ($361,300) $522,000 $993,000 $2,028,000 Fixed Expenses Salaries and Wages - 240,000 900,000 900,000 900,000 Fixed Expenses (insurance, Office, Hosting, Software Service, Ongoing Legal) 20,000 100,000 100,000 100,000 100,000 Total Fixed Expenses 20,000 340,000 1,000,000 1,000,000 1,000,000 EBITDA ($59,900) ($701,300) ($478,000) ($7,000) $1,028,000 Total Revenue
Editor's Notes
- Profit or Non-Profit .
- Boot Strapping: Use your savings and selling assets Friends and Families Home equity line of credit Crowd Funding
- Its determined by the market