Startup Financing

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Startup Financing

  1. 1. Financing for Startup Business Serghei Zagaiciuc, entrepreneur, founding partner of http://www.trackdroid.com/ Make sure your business never dies of blood-loss!
  2. 2. About myself - trackdroid.com <ul><li>Google Android mobile phone application manager </li></ul><ul><li>Search, install, uninstall software </li></ul><ul><li>Receive software updates </li></ul><ul><li>Provide software marketplace for application developers </li></ul>
  3. 3. What is a startup? <ul><li>Not every new business is a startup </li></ul><ul><li>Startup businesses should be very aggressive and very scalable </li></ul>
  4. 4. How to prepare for investment? <ul><li>Create a business plan, as detailed as possible! </li></ul><ul><ul><li>http://www.score.org/ </li></ul></ul><ul><li>Incorporate! </li></ul><ul><li>Dont take too much, dont take too little </li></ul><ul><li>Always keep looking, even if you just got some money! </li></ul>
  5. 5. Types and Sources of Financing <ul><li>Seed Capital </li></ul><ul><ul><li>Own money </li></ul></ul><ul><ul><li>Service company </li></ul></ul><ul><ul><li>Angel investors </li></ul></ul><ul><ul><li>Venture funds (very rare)‏ </li></ul></ul><ul><li>Venture Capital </li></ul><ul><ul><li>Venture funds </li></ul></ul><ul><ul><li>Banks and financial organizations (very rare)‏ </li></ul></ul><ul><li> </li></ul>
  6. 6. Own money <ul><ul><li>+ No need to give anything away </li></ul></ul><ul><ul><li>+ Little administrative costs </li></ul></ul><ul><ul><li>- Not getting investor opinion </li></ul></ul><ul><ul><li>- Investment is very risky </li></ul></ul><ul><ul><li>- Usually you don't have enough money </li></ul></ul><ul><ul><li>- May spoil relationship with your family </li></ul></ul>
  7. 7. Angel Investors +They are experts, you get advice and connections + Fairly fast decision making + Low overhead - Take 5-15%% of the company - Financing from angels is limited Example: http://www.ycombinator.com/
  8. 8. Venture Funds <ul><ul><li>+ They have really big money, maybe too big for you :-)‏ </li></ul></ul><ul><ul><li>+ If you interest them you get all the connections you need </li></ul></ul><ul><ul><li>- Usually not interesting in small companies </li></ul></ul><ul><ul><li>- High administrative cost and overhead </li></ul></ul><ul><ul><li>- Slow decision making </li></ul></ul><ul><ul><li>- Will take significant amount of company </li></ul></ul><ul><ul><li>Examples: </li></ul></ul><ul><ul><li>http://www.sequoiacap.com/ </li></ul></ul><ul><ul><li>http://www.mangrove-vc.com/ </li></ul></ul>
  9. 9. A

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