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Venturefest Bristol 2011, Charles Grimsdale, Eden Ventures
Venturefest Bristol 2011, Charles Grimsdale, Eden Ventures
Venturefest Bristol 2011, Charles Grimsdale, Eden Ventures
Venturefest Bristol 2011, Charles Grimsdale, Eden Ventures
Venturefest Bristol 2011, Charles Grimsdale, Eden Ventures
Venturefest Bristol 2011, Charles Grimsdale, Eden Ventures
Venturefest Bristol 2011, Charles Grimsdale, Eden Ventures
Venturefest Bristol 2011, Charles Grimsdale, Eden Ventures
Venturefest Bristol 2011, Charles Grimsdale, Eden Ventures
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Venturefest Bristol 2011, Charles Grimsdale, Eden Ventures

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  • 1. Early Stage Funding Charles Grimsdale Eden Ventures 3 November 2011Authorised and regulated by the FSA
  • 2. Eden Portfolio Sold to Nokia/SiemensSold to ORACLE Sold to TESCO Eden Ventures 2011 2
  • 3. Seed Capital – what is it? First round of capital that you raise – Typically raised from a combination of Friends and Family, Founders and external investors – Typically less than £1m in total – This does depend very much on the type of business How much should you raise? – Enough to fund your plans for 18 months or more – Enough to deliver a first functional version of your product/service – Enough to win your first key customers What will it cost – Assume that you will likely give up 15-30% of your equity Eden Ventures 2011 3
  • 4. Various Funding Options Bank Loans – Really only viable for businesses that have established trading history, and which are either a) profitable or b) have adequate physical assets to underwrite the loan Grants – Technology Strategy Board and other sources Venture Capital – You issue shares in return for capital – Several sources of capital – Friends and Family – Angel investors – Venture Capital Funds Eden Ventures 2011 4
  • 5. Who should I approach? Depends on the size of the market opportunity and your Plan? Plan - £10m in Revenue within a 5 – 8 year time frame – Raise less than £1m in total and focus on Angel investors and Friends and Family – Get the business to break even as quickly as possible and use Bank debt to fund growth Plan - £50m in Revenue within 5 – 8 year time frame – Raise £500K - £1m seed round – Assume you will need at least another £5-8m in one or two rounds – Approach Angels and smaller Venture Capital Funds for Seed round – Aim to get at least one VC who can invest >£3m in the next round Plan - >£100m in Revenue within 5 – 8 year time frame – Raise £500 - £1m seed round – Aim to get two VC’s in the seed round who can each invest >£3m in the next round – Assume you will need to raise £10-20m in 3-4 rounds Eden Ventures 2011 5
  • 6. What do investors look for Market knowledge in the team – Do you really understand the competitive landscape – What will make your product/service stand out – Disruptive opportunities in the market – You need to be “all over” the numbers Experience in the team – Obviously look for experience of successfully building businesses – BUT often the founders are too young to have such experience Good balance of skills and personalities – Really Strong Technology visionary who can build the product – A commercial person who can sell it – A strong operator who can build process – Venture capitalists do not fund one founder operations – Prefer to see equity split at least three ways in the founding team Eden Ventures 2011 6
  • 7. What do investors look for Ability to attract great people – If you have managed to convince some great engineers to come and start building your vision that helps – Demonstrate you can get some good advisors on board Clear understanding of your target customer – Exactly who are they likely to be and why Very clear and tight Product Proposition - FOCUS – Really well defined launch product/service – What are the key things you need to do to attract customers Marketing Strategy - How will you reach those customers – Obsessive attention to detail Clear Milestones for Seed Funding – In 12 -18 months we will achieve A, B, C Eden Ventures 2011 7
  • 8. What to look for from your investors More than just money – Can they help you recruit that next key person – Could they help bring your first key customer – Have they got experience of building a business Empathy – Better to have an investor who understands a bit about your business and who has been there so that they can be supportive/sensitive when you are feeling the pain A Long term travelling companion – Investors who will invest in every round – Do you want to find a whole new set of investors for every round? Do your Due Diligence – Ask your investor for references! Eden Ventures 2011 8
  • 9. Raising capital is like any Sales Process Find the decision makers – Make sure you understand who makes the final investment decision Deliver a blindingly good pitch – You have a maximum of 15 minutes to deliver your pitch Listen and handle objections precisely – Ask investors exactly what they don’t like about your proposal – The bits they like are irrelevant…. Focus on the objections Own the references and Market Background material – Can you help them find other independent sources to validate your proposal…. Own those references Constant communication – Keep feeding your prospective investors with good news and trading updates, try to get multiple meetings Control the time line for a decision – Ask investors for clear milestones Eden Ventures 2011 9

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