Mark Kofman - Raising Money in Estonia

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  • This is just one example of wiki usage. What about starting all documents, or requirements gathering sessions in the wiki? Create a stub, send out the link and have everyone contribute, edit and discuss. Low email overhead, big collaboration factor. All the while you are creating that community fatcor.
  • Mark Kofman - Raising Money in Estonia

    1. 1. raising money in Estonia. programeter.com story Mark Kofman, CEO, Programeter.com Phone: +372-517-8945, Skype: kofman Blog: http://toolsforsoftwareteams.wordpress.com Twitter: http://twitter.com/markkofman
    2. 2. I am Mark Kofman enterpreneur , 2 nd startup, business experience in 5 countries, software offshoring and outsourcing expertise
    3. 3. <ul><li>co-founder , together with Anton Litvinenko, of … </li></ul>
    4. 4. metrics and analytics for software projects
    5. 5. what is the purpose?
    6. 7. How did 2 programmers try to raise money ?
    7. 8. 1. friends-family-fools: 50-500KEEK 2. seed – 500K-1.5MEEK 3. vc - 3M-30MEEK definitions first: funding rounds
    8. 9. How did 2 programmers try to raise money ?
    9. 10. Step 0: decision to start Early 2006, 3 architects (read programmers), lots of initiative, no reputation, no business network
    10. 11. Step 1. register the company. -40,000EEK, -1 founder
    11. 12. Step 2. family friends and fools: +500,000EEK , -20% 2007, quit the jobs, dreams of huge success
    12. 13. Step 3. searching for venture capital: -9 months , + 0EEK
    13. 14. “ I have done 500 phone calls in few days to raise this money “ CEO of funded Estonian startup
    14. 15. I spent 3 months in silicon valley meeting top VCs ... goal : build-up the network for future fund raising and sales
    15. 16. who has the VC money in Estonia?
    16. 17. 1. Arengufond: Smartpost, Fits.me 2. ASI (skype co-founders): Programeter, Guardtime, Cats and Dogs, ... 3. MTVP: Rate.ee, aegmaha.com
    17. 18. Step 4. seed round : +$150,000 , -10%
    18. 19. who has the seed money in Estonia?
    19. 20. 1. ASI (skype co-founders): Programeter, Guardtime, Modesat, MarkIt 2. WNB: Smartdust, Smartpost 3. Your employer: JavaRebel, Sharemind, Toggl 4. Individuals (Rikaste TOP)
    20. 21. Step 5: bootstrapping Step 6: now in progress of raising multi-million series A round
    21. 22. Results : 200 investor pitches, 5 0 meetings, 8 negotiations, 2 investment... sounds good?
    22. 23. … actually not We have spent more effort on raising money than on product development and increasing value
    23. 24. … costs of raising money - cost of founder/month = 100KEEK - 1.2x12m. of founders time – 1,44MEEK - cash burned by company - 200KEEK - traveling expenses – 50KEEK 1,690,000EEK
    24. 25. step-by-step money-raising guide Applies to young founders of startups in Estonia. Tested on B2B startup
    25. 26. 1-12m : bootstrap at-least 12 months 1-12m : meanwhile build-up network of investors, advisors 12-18m : start selling if you can 12m-18m : go for seed money – approach your network 18-24m : think twice before raising vc money in Tallinn... think again 18-24m : make product/service sales support your company daily expenses. 24-33m : secure yourself 6-9 months and talk to all VCs you can
    26. 27. you should plan at least 1 year ahead
    27. 28. but reality is different. baltic startups typically have cash only for 3-6 months
    28. 29. go for internet-(ional) market opportunity for this region startups:
    29. 30. you need online strategy, suitable business model, specialists, resources It's not just setting up an e-shop
    30. 31. think pay per new customer benefit: you can control your budget
    31. 32. think pay per new customer 1. pay per click ads 2. make 80% of your sales process online 3. monitor converstion rates
    32. 33. customer aquisition cost 1. 100 clicks = $100 2. 5 phone calls = $25 3. 1 online meeting = $25 4. contract printing costs = $1
    33. 34. think pay per new customer If new customer aqusition costs you $151, you can run company with even with $1000 in cash
    34. 35. resume: - grow your network - focus on what you are best at - think pay per new customer and if you want to invest, call me
    35. 36. raising money in Estonia. programeter.com story Mark Kofman, CEO, Programeter.com Phone: +372-517-8945, Skype: kofman Blog: http://toolsforsoftwareteams.wordpress.com Twitter: http://twitter.com/markkofman

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