1. Capital Enterprise Presentation on Funding For Start-ups in London .
2. Step 1. Know what stage you are on the fundraising cycle Stage Status Pre seed Good Idea, Founder Team are developing a full business plan and completing market research, registering IP and confirming the business opportunity. Seed Opportunity demonstrated. Engage in set-up activities, developing product / service to ‘proof of concept’- market testing. Start up and Series A Launched company-entered market and rapidly approaching break-even sales. Hiring key employees –ready to scale up.
3. Step 2- Know the different Sources and types of Finance <ul><li>Bootstrapping through Personal resources (time and money = sweat equity you are investing) </li></ul><ul><li>FFF- Family Friends & Fools – People who will give you funds with little questions asked. </li></ul><ul><li>Customers and Suppliers- “ Build slowly at low risk by growing business through profits from supplying customers” </li></ul><ul><li>Loan providers- “ Increase business growth ambitions by incresing investment by taking out debt” </li></ul><ul><ul><li>Banks ( Overdraft-unsecured and secured loans) </li></ul></ul><ul><ul><li>Specialist lenders (Factoring, invoice discounting etc.) </li></ul></ul><ul><li>Investors- </li></ul><ul><ul><li>Private Investors- Business Angels </li></ul></ul><ul><ul><li>Venture capital </li></ul></ul><ul><ul><li>Government Backed Investment Funds </li></ul></ul><ul><li>Matching the right mix of sources to the right stage and type of finance is the key to successful fundraising </li></ul>
4. Step 3- What do you need Money for? Type Amount Purpose Provider Set-Up- Pre-seed- before trading Varies Up to £100k Get the business set-up- e.g. legal fees, Equipment, website, accommodation Founders ‘bootstrap’, - Sweat Capital, Family & Friends, Personal Loans & Credit Cards. Over 90% of new businesses start-up on less than £10,000 Research & Development Capital ( If doing something new and innovative) Varies Up to £0.5m. Proof of Concept Funding. Market testing Intellectual Property Registration. Time Bootstrap- Finance whilst working elsewhere or as consultant. Private investors alone or in groups. Government Grants/ Tax Incentives e.g. TSB Open Innovation Collaborations with industry/ HEI Definitely not banks Working Capital Varies To fund cashflow cycle (once you have orders) Customers & Suppliers Banks/ Factorers/ Invoice Discounters/ credit cards Scaling up/ Growth Series A Investment 200K- 2m Commercialisation of “proven” technology. Roll out of growth plans Private investors alone or in groups/ dedicated seed funds, specialist VC’s alone or in syndicates. Government Backed funds. VC’s only if more than £1m- below more likely angels.
5. Step 4: Check out you funding options? <ul><li>Information: </li></ul><ul><li>Capital Enterprise What’s On in London- www.capitalenterprise.org/whats-on </li></ul><ul><li>Business Link - www.businesslink.gov.uk </li></ul><ul><li>Start- up Britain - http://www.startupbritain.org </li></ul><ul><li>British Library- www.bl.uk/bipc </li></ul><ul><li>HMRC Small Company Enterprise Centre- Source of advice and help http://www.hmrc.gov.uk/manuals/vcmmanual/VCM10050.htm </li></ul><ul><li>HMRC R& D Tax Credits www.ucl.ac.uk/advances/advances-news/hmrc </li></ul><ul><li>HMRC Guide & Support- http://capitalenterprise.org/guide-to-rd-tax-credits </li></ul><ul><li>British Business Angel Association: www.bbaa.org.uk </li></ul><ul><li>British Venture Capital Association: www.bvca.co.uk/ </li></ul><ul><li>London Funding Conference: http://www.londonfundingconference.com/about-funding </li></ul><ul><li>Guide to Early Stage Investment: http://www.paloalto.co.uk/about_us/Early_Stage_Investment_by_Alan_Gleeson.pdf </li></ul><ul><li>British Franchise Ass- http://www.thebfa.org </li></ul><ul><li>And if you have not checked them out please look at the latest schedule of advice and training events at : </li></ul><ul><li>www.thebusinessbootcamp.org . </li></ul>
10. Step 5: So remember –What’s important when seeking finance <ul><li>The quality and “connections” of the management team </li></ul><ul><li>The size of the business opportunity/ funding need </li></ul><ul><li>The scope for building a sustainable competitive advantage </li></ul><ul><li>The level of risk/ security. </li></ul><ul><li>And the timeliness of the proposal </li></ul><ul><li>Will determine the attractiveness of your business to investors, </li></ul><ul><li>lenders and funders </li></ul><ul><li>The ability of the entrepreneur to negotiate well and of the team to execute the business plan convincingly </li></ul><ul><li>Will determine the type, price and quality of the deal that can be achieved </li></ul>