Funding: spinning the wheel of fortune (wisely)

1. Spinning the Wheel of Fortune
Thomas Depuydt

2. 2

3. 3
CASH IS KING
“Whether you’re rich or poor, it’s good to have money”

4. 4
CASH IS KING
• Cash in the bank
• Cash is going out
• Cash is coming in
• Months ‘Runway’
No excuse for not
knowing these
numbers

5. Sources of cash
REVENUE FREE
(SUBSIDY)
INVESTME
NTS

6. Sources of cash
REVENUE FREE
(SUBSIDY)
INVESTME
NTS

7. 7
Investment products
Perceived
Risk
Expected
Return
Asset-Backed
Secured Loan
Straight Loan
Convertible
Loan
Preferential
Equity
Common
EquityBanks
BA, VC

8. 8
What story to tell
Asset-Backed
Secured Loan
Straight Loan
Convertible
Loan
Preferential
Equity
Common
Equity
Provide comfort on
the downside
Sell them upside /
story

9. 9
What story to tell

10. 10
What story to tell

11. 11
Fundraising lottery?

12. “
”
12
Luck favors the
prepared
“Souvenez-vous que dans les champs de l'observation le hasard ne favorise que les esprits préparés.”
Louis Pasteur

13. 13
Pack everything you
need
How to prepare fundraising
Series A
Search the Web for
Info
Read a Book Learn Basic
Vocabulary
Ask tips from People
with Experience

14. 14
Make sure the math works
IRR

15. 15
Make sure the math works - example
Investment Exit
(€2M) >€10MVC cash
33%VC stake 25%
€6MValuation >€40M
Multiple x10 X3-4
Revenue €600K >€10M
5 years
IRR – target 35%

16. 16
Make sure the math works - example
Investment Exit
(€2M) >€10MVC cash
33%VC stake 25%
€6MValuation >€40M
Multiple x10 X3-4
Revenue €600K >€13M
5 years
IRR – target 35%

17. 17
Make sure the math works - example
Investment Exit
(€2M) >€10MVC cash
33%VC stake 25%
€6MValuation >€40M
Multiple x10 X3-4
Revenue €600K >€13M
5 years
IRR – target 35%

18. 18
Make sure the math works - example
Investment Exit
(€2M) >€10MVC cash
33%VC stake 25%
€6MValuation >€40M
Multiple x10 X3-4
Revenue €600K >€13M
5 years
IRR – target 35%

19. 19
Don’t shoot yourself in the foot

20. 20
Irrelevant Statement on Market
“According to Gartner, the internet of things
industry in Europe will reach 10 trillion dollar in
2020. Our business plan assumes we will take 1%
of this market.”
Still one business plan out of three

21. 21
Wrong Assumptions on Simple Facts
“We will hire an experienced business
development profile with sector knowledge to
launch international sales. Our estimated cost for
that person is €35,000”
Motivated entrepreneur

22. 22
Unprofessional Behavior
“Thanks for introducing that company to us. We
have been exchanging emails in the past with
them. They were going to send some time slots for
a meeting but never got back to us.”
VC Investor

23. Key Takeaways
• Cash is King
• #FOMO can be your friend
• Prepare for the journey
• Make sure the math works
• Wheel of fortune
• Irrelevant Statement on Market – 1% rule
• Wrong Assumptions on Simple Facts
• Unprofessional Behavior

24. Thank You