Angel hack  tech start-ups from idea to investment
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Angel hack tech start-ups from idea to investment



Capital Enterprise presentation t Angel Hack London 2013

Capital Enterprise presentation t Angel Hack London 2013



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Angel hack tech start-ups from idea to investment Presentation Transcript

  • 1. Incubating, Accelerating andFinancing London’s Tech SectorStart-ups..Presented by John Spindler CEO ofCapital Enterprise1@capenterprise
  • 2. Scale focused start-ups are…different• Ambitious: want to be worth£10M+ minimum in 3-5 years.• Solve a big problem for potentialcustomer in a “Game Changing /disruptive” way.• Introduce new technology/business model innovations• Smart Team with Key Partnersbuy -in.• Ability to adapt and change asthey develop.• At some stage will needinvestment• Expectation of success is“radically uncertain”@capenterprise 2
  • 3. @capenterprise ‹#›
  • 4. Lean Canvas Model@capenterprise 4
  • 5. Go Leanto prove concept andmarket“Lean Start-up is aboutreducing market risk byworking out how to failfast”5@capenterprise
  • 6. Idea to Tech Business- Three Chasms.
  • 7. @capenterprise 7IdeaProblem/SpaceExplorationDesign/PrototypeBeta TestAdapt/PivotX2LaunchBootstrap- FFFInnovation AwardsStart-up LoansCrowdfunding i.e. KickstarterSeedrs/ CrowdcubeSEISSuper Angels/Angel GroupsEarly Stage VC’sStart- Up Funding road –map.MVP FactoriesHackathons/ Hatcheries/ Meet-ups.AcceleratorsAccelerators
  • 8. More great places toForm & Explore Ideas@capenterprise 8
  • 9. Developing the team & the tech• Hipster (Designer)• Hacker (Developer)• Hustler (Distributor)@capenterprise 9
  • 10. Sources of Start-up Help for TechEntrepreneursInformation:• Capital Enterprise-• Meet-up -• Mobile Academy-• Makers Academy-• Skills Matter-• Start- up Britain -• British Library-• Google Campus-• General Assembly-• Innovation Warehouse-• IC Tomorrow -• UCL Decide-• Start-ups on Air at Google Campus-• Hubventurelabs -• 3 Beards-• Founders Fit- 10
  • 11. Prototyping@capenterprise 11
  • 12. Funding Product DevelopmentGrants & Awards General• J4B- Portal for grant finding• Technology Strategy Board ( R&D Funding) - -• Knowledge Transfer Networks-• IC Tomorrow-• NESTA-• London European Enterprise Network-• E Funding for SME R&D -• EU Funding for R&D collaborations:• Knowledge Transfer Partnerships funding support- Follow on research funds.•••••• 12
  • 13. CrowdfundersCrowd funding Platforms-Reward based Crowdfunding platforms- will help you toraise funding to build a proto-type and market test agreat idea or product.- Great for pre-selling cool techhardware.•• (USA)••••••••• https://www.banktothefuture.comSeed/ Early stage Investment 13
  • 14. @capenterpriseNeed less than £10K to start?- Sources of Grants- Competition funding £1000 issued to 10+ businesses per month- Princes Trust £1000- £15,000 Enterprise Loans for Under 25’s- or New Enterprise Allowance Scheme – Check who delivers the scheme in London by e-mailing Capital Enterprise.- Community Development Finance Associations- - 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- Less than£10K to Launch abusinessNo EnterpriseAllowance SchemeSelf FundBorrowWrite a simpleBusiness Plan & 12month cashflowCommunityDevelopmentFinance InstitutionStart-Up Loan Bank14
  • 15. Idea to Tech Business- Three Chasms.
  • 16. Accelerators In London
  • 17. Accelerators help by ..Offering early StageEntrepreneurs…• Fellow Community ofentrepreneurs & supporters• Runway support & funding(£15-£100K at standardised investment terms. )( 3-6 months on average)• Physical Space & Facilities• Mentors ( 1st Alumni/Industry- 2nd Investors)• Help to Rapid Field Trail withusers & customers.• Demo days- Introductions toInvestors/ customers…so that they can test..• Product- Assess Functional use/improve design & UX• Market Reaction- interest/usage/revenue - AARRR• Revenue/ profit Potential-pricing, market timing, LTV/CCA• Business Model- “To Pivot or NotTo Pivot”• Investor reaction- interest andvaluations• Team- ability to work together and deliver.
  • 18. Accelerators want businesses who..…
  • 19. AcceleratorsPre- Accelerators• Angel Hack-• Start-Up Weekend:• Launch 48: http://launch48.comUSA• Y-combinator-• Tech Stars-• 500 start-ups-• Seed Camp:• Hackfwd:• Bethnal Green Ventures -• BBC Worldwide Labs-• Tech Stars London -• Accelerator Academy-• Entrepreneur First-• Fintech Innovation Labs-• Wayra-• The Bakery -• Healthbox-• Collider12-• Red Bull Amplifier- out – and 19
  • 20. Proving the Business Model KeyMilestones• Human Resources - Hiring key people that will make a huge impact on your organization (not justemployees for workload purposes, but like a shit-hot marketing person, for example).• Product – MVP- Beta- First Pivot-Full Launch- On-going Iterations• Market – Market validation. As in, first customers, or first paying customers, etc• Funding – Maybe some money being committed to a round that the investor in question can leador participate in.Other examples of milestones include*:• Proof that you can work together as a team, usually historical evidence• Proof that you can build something, i.e. working prototype• Proof that it’s useful to someone – first users and clients• Proof that you can talk to investors – every financing round, even small ones• Proof that you can talk to audiences – 100k users or 1M users or 10M users…• Proof that the initial team is able to attract talent –• Proof that ecosystem agrees with your ideas – bringing respected industry advisors partners on board• Proof that there is market – £1M annually/ Proof that the market is big! – £25M annually and beyond• Proof that you can manage your finances – cash-flow positive operation• Proof that you can scale – £10M annually20@capenterprise
  • 21. Metrics@capenterprise 21 LTV/ CCA = $$$$
  • 22. Investment Essentials@capenterprise 22Type Amount Purpose Source SeeSeed Under £50K Proof Of Conept FFFCrowdfundingwww.crowdcube.comwww.seedrs.comSeed £50K-£500K Launch to "Beachhead" Angels/ SeedInvestorsNote Average valuation for apre-revenue company inLondon is between £350-£600KSuper Seed £500-£2mLaunch to "Beachhead" +Build scalabilitySyndicates ofInvestorsNot as common in the UK as USSeries A(Small) £1m-3M ScaleVCs/ FamilyTrust/ SupperAngelsTraditionally where UKinvestor money enters themarket
  • 23. @capenterpriseSeed 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 twoor 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 theirmarginal rate.• In the 2012-13 tax year, tax payers can roll any chargeable gain in the tax year in to a SEISwith 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, forexample, a property company raise capital as a SEIS.SEIS is…… “a game changer”?23
  • 24. …A potentially “Scalable” businesseswill …• Solve a relevant Problemfor a Large AddressableMarket.• Have a Credible FoundersTeam.• Have a Semi-ProvenBusiness Model.• Large Returns on initialcapital- i.e. CapitalEfficient to scale.@capenterprise 24
  • 25. Seed Investors want …. Winners!Investors want to find..1. Skilled and credible managementteam2. BIG Market Opportunity- a bigproblem for a potential large set ofcustomers that you can solve?3. The Idea/ Prototype to be semi-proven and semi-market validated.4. No Technical Risk5. Evidence that the Business Modelis both repeatable and scalable.6. Business Model ready to execute7. Road Map & Forecasts based onsemi- proven assumptions8. Metrics9. Adequate financial returns ( 10Xwithin 3 years?)10. People they can trust/ work with11. A clear exit route- How will theyclaim there reward??@capenterprise 25
  • 26. Send a slide deck and get introduced 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. Problem3. Your solution4. Business model5. Underlying magic/technology6. Marketing and sales7. Competition8. Team9. Projections and milestones10. Status and timeline@capenterprise
  • 27. Business AngelsPublic Supported Co-Investment Schemes• NESTA -• Capital 4 Enterprise-• Angel Co-Fund-• Mayor Of London Co-Investment Fund-• Enterprise Capital Fund- Early stage Investment Platforms:- www.seedrs.comCapital Enterprise top 10 Angel Network in London1. London Business Angels: Oxford Early Investments- Envestors- Finance South East- www.thefsegroup.com5. Angels Den- www.angelsden.com6. Venture Director- Start-up Funding Club- E100- London Business School - #1 seed- Ascension Ventures- an alternative list check out- or check 27
  • 28. Need a hot introduction!Capital Enterprise and/or itspartners will find you achampion to get your business“fit for investment” and thenintroduce you to Angels andInvestors.E-mail :john@capitalenterprise.org28@capenterprise
  • 29. Early Stage VC’s & InvestorsAccel Partners: Stage agnostic, see their portfolio here.Anthemis Investment- Stage Agnostic, see portfolio hereBalderton- Stage Agnostic- See there portfolio hereEden Ventures- Early- mid stage – see there portfolio hereIndex Ventures: Stage agnostic, see their portfolio here.Passion Capital: Early Stage, see their portfolio here.Delta Partners: Early to mid-stage, see their portfoliohere.Imperial Innovations: Restricted entry requirements butthe largest Series investor in the UK in 2012-13 , see theirportfolio hereAtomico: Stage agnostic, see their portfolio here.Profounders: Early and mid-stage, see their portfoliohere.AIB Seed Capital Fund: Managed by two funds whichinvest under-€250k and over-€250k, see theirportfolio here.• ACT: Early to mid-stage, see their portfolio here.• Bloom Equity: Early to mid-stage angel syndicate, see theirportfolio here.• DFJ Esprit: Early to mid-stage, see their portfolio here.• Charlotte St: Early to Mid Stage, see there portfolio here• Dawn Capital: Early to mid-stage, see their portfolio here.• MMC - Series A Fund- Co-Investment fund with Mayor ofLondon• Notion Capital – SAAS and Cloud specialist- See portfolio here• Seraphim Capital – Early-mid stage see there portfolio here.• Kernel Capital: Early stage, see their portfolio here.• Octopus Ventures: Early to mid-stage, see their portfolio here.• M8 Capital : Mobile Specialists, see their portfolio here• Episode1: Early Stage Software Companies• Arts Alliance: Minimum investment £500K in Media relatedtech- see portfolio here• EC1 Capital: Early stage, see their portfolio here• Connect Ventures- Early stage and very cool.• Ballpark Ventures – Early stage Super Angel investors• Pen Tech Ventures- Early Stage to mid- See portfolio HereAlternatively you can check out Crunch Base / Angel List
  • 30. Specialist FundsWomen- Stargate Capital- Trapezia- FSE- Incito- Aspire Fund - Bridges Sustainable Fund- Ingenious Media- Cleantech Fund Carbon Trust- Low Carbon Accelerator- CT Investment Partners- Wellington Partners- MEWE360: £1m fund set up by Ingenious Media- Big Society Capital- Sources of Social Finance- Bridges Venture Fund Big Issue Investment- Social Finance- Social Investment Fund- 30
  • 31. If you want an introduction thensend me a slide deckwww.capitalenterprise.orgjohn@capitalenterprise.org31@capenterprise