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Start up a business and change the world vs4
 

Start up a business and change the world vs4

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Opionio piece on starting a scalable business in the UK

Opionio piece on starting a scalable business in the UK

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    Start up a business and change the world vs4 Start up a business and change the world vs4 Presentation Transcript

    • Welcome“Start a Business And Change the world???”. www.capitalenterprise.org
    • Our Agenda- Introduce you to new thinking of how to start a business- Introduce you to the Lean Start-up principles including MVP- Demonstrate how to use the Business Model Canvas www.capitalenterprise.org 2
    • Start-up Growth Pathway 50 40 30 20Income 10 0 0 2 4 6 8 10 12 14 16 -10 -20 Investment
    • Going Self-employed vs Starting a Growth Business Self Employed need Entrepreneurs need• To turn a pre-acquired • A team skill/know-how into a service • A large market opportunity.• Portfolio (Evidence) • A WOW• USP • Key Partners/ Early Evangelists.• Easy access to customers (i.e. • A solution/ offer customers will buy/use. contacts./ networks) • A “Market Validated Business• Self-Confidence Model” that is both• Basic business know-how repeatable, predictable and• Low volume/ high margin scalable.• Cashflow • Resources and Investment ££££ • ROC X 10 ? www.capitalenterprise.org 4
    • “There is an opportunity gap when the scope for growing income at a very fast rate islimited for those who have too little to invest, but expands dramatically for those who can invest a bit more.” Banjaree &Duflo- Poor Economics www.capitalenterprise.org 5
    • What is A Start-Up?“a start-up is an organization formed to searchfor a repeatable and scalable business model”- Steve Blank- “4 Steps to an Epiphany”“an organization dedicated to creatingsomething new under conditions of extremeuncertainty”- Eric Reis- “Lean Start-up” www.capitalenterprise.org
    • Traditional Start-Up Model Pre-Start Post- Start Valley of Death- See Get Idea Develop a Source Funding/ Launch if anyone will buy Validation business plan Resources Business my product.Have an Idea Get Set-Up Guidelines www.capitalenterprise.org
    • New Start-up Model Attempts to Premature Scale is the No 1 reason that ambitious business start-ups fail.- Source Start-up Genome. www.capitalenterprise.org See Steve Blank, Four Steps to the Epiphany
    • Customer Discoveryhttp://www.businessmodelgeneration.com/downloads/value_proposition_designer_draft.pdf 9
    • Importance of FITProblem Solution 10
    • “In life a hypothesis that somethingis superior to something else cannotbe scientifically proven but it can be demonstrated” Robert Hughes. RIP www.capitalenterprise.org
    • Part 5Still Need Money www.capitalenterprise.org
    • Funding Runway • How much/ little money is needed to set-up the business, get a MVP prototyped & beta tested, launch the business and get to breakeven or next round of funding. • Going to need a Budget/ Cashflow/P&L forecast…. 13
    • Step1- Know the different types of finance available• Bootstrapping through Personal resources (time and money = sweat equity you are investing)• FFF- Family Friends & Fools – People who will give you funds with little questions asked including reward based crowd funders such as Peoplefundit.• Government Grants• Customers and Suppliers- “Build slowly at low risk by obtain credit from suppliers and growing business through profits from paying customers”• Loan providers- “Increase business growth ambitions by increasing investment by taking out debt” – Banks ( Overdraft-unsecured and secured loans) – Community Finance Institutions ( Soft/ unsecured loans for riskier ventures) – Leasing Companies. – Invoice lenders (Factoring, invoice discounting) – New loan markets such as Market Invoice and Funding Circle.• Investors- – Private Investors- Business Angels such as Angel Capital – Venture Capitalist – Crowdcube – Government Backed Investment Funds Matching the right mix of sources to the right stage and type of finance is the key to successful fundraising www.capitalenterprise.org
    • Step 2- Match the funding need to purpose? www.capitalenterprise.org 15
    • Information:• Capital Enterprise What’s On in London- www.capitalenterprise.org/whats-on• Business Link - www.businesslink.gov.uk• Start- up Britain - http://www.startupbritain.org• British Library- www.bl.uk/bipc• HMRC Small Company Enterprise Centre- Source of advice and help http://www.hmrc.gov.uk/manuals/vcmmanual/VCM10050.htm• HMRC R& D Tax Credits www.ucl.ac.uk/advances/advances-news/hmrc• HMRC Guide & Support- http://capitalenterprise.org/guide-to-rd-tax-credits• British Business Angel Association: www.bbaa.org.uk• Guide to Early Stage Investment: http://www.paloalto.co.uk/about_us/Early_Stage_Investment_by_Alan_Gleeson.pdf• Guide to 100 offers for start-ups – www.capitalenterprise.orgAnd if you have not checked them out please look at the latest schedule of advice and training events at :www.ngfc.org.uk . www.capitalenterprise.org 16
    • Need less than £10K to start? Grant- www.j4b.co.uk No Funds New Enterprise Unemployed? Allowance Scheme Need Less than £10K to Launch a Self Fund business Community Development Write a simple Finance Institution Borrow Business Plan & 12 month cashflow Bank- Sources of Grants- www.j4b.co.uk- Competition funding £1000 issued to 10+ businesses per month- http://www.shell-livewire.org- Princes Trust http://www.princes-trust.org.uk/need_help/enterprise_programme.aspx- £2500 Enterprise Loans for Under 25’s- http://www.startuploans.co.uk/- New Enterprise Allowance Scheme – Check who delivers the scheme in London by e-mailing Capital Enterprise.- Community Development Finance Associations- http://www.cdfa.org.uk - Also check out North London Community Finance- ELSBC Access to Finance – Business Plan support for those looking to raise up to £10K• Soft loans for Creative Businesses- http://www.creativeindustryfinance.org.uk/ www.capitalenterprise.org
    • You can’t a business loan from a bank because?Banks only make a margin on loans of between 2-7% -so they can only afford very low default rates andthis means they will not lend to a business or entrepreneur that is deemed “risky”. And you are deemedan unacceptable risk if:1. You have a bad credit history2. Failure rate in you business sector is high3. You have no confirmed customer invoices- no evidence of sales = no evidence you can re-pay the loan4. The business has no trading history – difficult to get a loan unless been trading for over 6 months5. You are unable to offer security to cover the bank if the business fails.6. Your customers are overseas –so there is a risk they cannot be legally forced to pay for goods ordered.7. What you want to do with the borrowed money is widely regarded as having a poor success rate e.g. Research and developing a new product and especially marketing. Banks like RBS are the best source of relatively cheap loans for trading businesses. www.capitalenterprise.org
    • Where do NGFC Figure 1. 4 Steps to developing a high growth business. ( Source HBR)members fit www.capitalenterprise.org 19
    • Funding Product Development: TechGrants & Awards General• J4B- Portal for grant finding http://www.j4b.co.uk• Technology Strategy Board ( R&D Funding) - http://www.innovateuk.org - http://www.innovateuk.org/content/competition/grant-for-rd-single-business.ashx• Knowledge Transfer Networks- www.innovateuk.org• London European Enterprise Network- http://www.een-london.co.uk• E Funding for SME R&D - http://www.eurostars-eureka.eu/what.do• EU Funding for R&D collaborations: http://ec.europa.eu/research/participants/portal/page/calls• Knowledge Transfer Partnerships funding support- http://www.ktponline.org.uk/ktp-what-will-it-cost- my-businessTranslation/ Follow on research funds.• www.rdfunding.org.uk/bulletin/queries/Search.asp?TheCloseMonth=July&TheYear=2011.• http://www.rcuk.ac.uk/kei/ktportal/Pages/Followon.aspx• https://ktn.innovateuk.org/web/145175/overview• http://www.ahrc.ac.uk/FundingOpportunities/Pages/BrowseOpportunitiesOld.aspx• http://www.ahrc.ac.uk/Pages/default.aspx• http://www.theculturecapitalexchange.co.uk/ www.capitalenterprise.org 20
    • Funding the RunwayAccelerators : Training & Mentoring programmes that provide fast-track to seed funding forScalable new businesses• Lean Camp : http://leanca.mp - http://be.foundercentric.com/• Start-Up Weekend: http://london.startupweekend.org• Launch 48: http://launch48.com• Tech Hub : http://www.techhub.com – Google Campus- http://www.campuslondon.com/• FIG- http://www.findinvestgrow.com/• Y-combinator- http://ycombinator.com/• Tech Stars- http://www.techstars.com/• Seed Camp: http://www.seedcamp.com• Hackfwd: http://hackfwd.com• Emerge Venture Labs- http://www.theemergelab.org• Ignite 100- http://ignite100.com• BBC Worldwide Labs- http://www.bbcworldwide.com/digital/labs.aspx• Springboard- http://springboard.com/ - http://www.f6s.com/profile/1961#programs/ajax-application• Student Start-ups- http://studentupstarts.com• Accelerator Academy- http://acceleratoracademy.com• Wayra- http://wayra.org/en/wayra• Euclid Opportunities- ( Fin Tech Only) http://euclidopportunities.com/• Innovation Warehouse- http://www.theiw.org• Hubventurelabs - http://hubwestminster.net/hubventurelabs• Green Accelerator- http://bertiinvestments.com/berti-green-accelerator/• Healthbox- http://www.healthboxaccelerator.com/ www.capenterprise.org
    • CrowdfundersCrowd funding Platforms-Reward based Crowdfunding platforms- will help you to raise funding to build a proto-type and market test agreat idea or product.-• www.kickstarter.com (USA)• www.indiegogo.com (USA)• www.peoplefund.it• www.sponsume.com• www.pleasefund.us• www.wefund.com• www.pozible.com• www.crowdfunder.co.ukEquity/ investment Crowd funding platforms:- www.crowdcube.com- www.seedrs.com http://crowdfundingtech.eventbrite.com www.capitalenterprise.org 22
    • Business Angels Angel Investment - £100-500K Seed Investment• NESTA - www.nesta.org.uk/investments• British Business Angel Association- www.bbaa.org.uk• Capital 4 Enterprise- http://www.capitalforenterprise.gov.uk/portfolio• Angel Co-Fund- http://www.angelcofund.co.uk/ Capital Enterprise top 10 Angel Networ in London1. London Business Angels: http://www.lbangels.co.uk2. Oxford Early Investments- http://www.oxei.co.uk/about.php3. Envestors- www.envestors.co.uk4. Finance South East- www.thefsegroup.com5. Angels Den- www.angelsden.com6. Venture Director- www.venturedirector.com- www.boundarycapital.com7. Start-up Funding Club- http://www.startupfundingclub.com/8. E100- London Business School - http://www.london.edu/facultyandresearch/subjectareas/strategyandentrepreneurship/enterprise100.ht ml9. #1 seed- www.number1seed.co.uk10. Keiretsu Forum- http://www.keiretsuforum.comFor an alternative list check out- http://www.designcity.co.uk/angelnews/edition_94.htm#article1
    • SEIS- Tax breaks to encourage investment in start-upsSeed Enterprise Investment Scheme-SEIS is a tax break launched in April 2012 for UKtax payers to encourage them to buy shares in start-up companies registered in theUKThe Facts:• SEIS investors can input £100,000 in a single tax year rising to a maximum £150,000 over two or more tax years in to a single company• Investors cannot control the company receiving their capital• Investors pick up 50% tax relief in the tax year the investment is made, regardless of their marginal rate.• In the 2012-13 tax year, tax payers can roll any chargeable gain in the tax year in to a SEIS with a full capital gains tax exemption (another 28%)• The business must be a start-up company -registered in the UK within 2 years of claim.• The company must not employ more than 25 workers.• The company must have assets of less than £200,000.• The company has to trade in an approved sector – generally not in finance or investment, for example, a property company raise capital as a SEIS. www.capitalenterprise.org
    • Specialist FundsWomen- Stargate Capital- Trapezia- http://www.stargatecapital.co.uk/trapezia_1.aspx- FSE- Incito- http://thefsegroup.com/investors/business-angels/incito-ventures/- Aspire Fund - http://www.capitalforenterprise.gov.uk/files/Aspire%20Information%20Leaflet%20(v%202)%20Flyer%20brochure.pdfGreen- Bridges Sustainable Fund- http://www.bridgesventures.com/sustainable-growth-funds- Ingenious Media- Cleantech Fund http://www.ingeniousmedia.co.uk/investments/investment- opportunities/clean-energy- Carbon Trust- http://www.carbontrust.com/about-us/our-investments- Low Carbon Accelerator- http://www.lowcarbonaccelerator.com- CT Investment Partners- http://www.ctip.co.uk- Wellington Partners- http://www.wellington-partners.com/wp/index.htmlSocial- Big Society Capital- http://www.bigsocietycapital.com- Sources of Social Finance- http://www.bigsocietycapital.com/finding-the-right-investment- Bridges Venture Fund http://www.bridgesventures.com/social-entrepreneurs-fund- Big Issue Investment- http://www.bigissueinvest.com- Social Finance- http://www.socialfinance.org.uk- Social Investment Fund- http://www.thesocialinvestmentbusiness.org
    • Early Stage VC’s & Supper AngelsAccel Partners: Stage agnostic, see their portfolio here. • ACT: Early to mid-stage, see their portfolio here. • Bloom Equity: Early to mid-stage angel syndicate, see their portfolio here.Anthemis Investment- Stage Agnostic, see their portfoliohere • DFJ Esprit: Early to mid-stage, see their portfolio here. • Charlotte St: Early to Mid Stage, see there portfolio hereEden Ventures- Early- mid stage – see there portfolio here • Dawn Capital: Early to mid-stage, see their portfolio here.Index Ventures: Stage agnostic, see their portfolio here. • Doughty Hanson- Stage Agnostic, see portfolio here • Seraphim Capital – Early-mid stage see therePassion Capital: Early Stage, see their portfolio here. portfolio here. • Kernel Capital: Early stage, see their portfolio here.Delta Partners: Early to mid-stage, see their portfolio • Octopus Ventures: Early to mid-stage, see their portfoliohere. here. • Hoxton Ventures ; Early stage with disruptive tech.Atomico: Stage agnostic, see their portfolio here. • EC1 Capital: Early stage, see their portfolio here • Connect Ventures- Early stage and very New.Profounders: Early and mid-stage, see their portfoliohere. • Pen Tech Ventures- Early Stage to mid- See portfolio HereAIB Seed Capital Fund: Managed by two funds which Alternatively you can check out Crunch Baseinvest under-€250k and over-€250k, see their http://www.crunchbase.com/financial-organizationsportfolio here.
    • Active London Angels… • http://bamlondon.blogs pot.co.uk/p/angels_16. html • https://angel.co/ 27
    • Step 4: So remember –What’s important when seeking finance• The quality and “connections” of the management team• The size of the business opportunity/ funding need• The scope for building a sustainable competitive advantage• The level of risk/ security.• And the timeliness of the proposal Will determine the attractiveness of your business to investors, lenders and funders• The ability of the entrepreneur to negotiate well and of the team to execute the business plan convincingly- Will determine the type, price and quality of the deal that can be achieved www.capitalenterprise.org
    • Recommended Slide-deckTen slides. Ten is the optimal number of slides in a PowerPointpresentation because a normal human being cannot comprehendmore than ten concepts in a meeting—and business angels are verynormal. If you must use more than ten slides to explain yourbusiness, you probably don’t have a business. The ten topics that aninvestors cares about are: 1. Summary and call to action/ what do you want? 2. Problem 3. Your solution 4. Business model 5. Underlying magic/technology 6. Marketing and sales 7. Competition 8. Team 9. Projections and milestones 10. Status and timeline www.capitalenterprise.org
    • The Endwww.capitalenterprise.org #capenterprise www.capitalenterprise.org