Angel hack  tech start-ups from idea to investment
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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- www.capitalenterprise.org• Meet-up - http://www.meetup.com• Mobile Academy- http://themobileacademy.org.uk/• Makers Academy- http://www.makersacademy.com/• Skills Matter- http://skillsmatter.com/• Start- up Britain - http://www.startupbritain.org• British Library- www.bl.uk/bipc• Google Campus- http://www.campuslondon.com• General Assembly- https://generalassemb.ly/locations/london• Innovation Warehouse- http://www.theiw.org• IC Tomorrow - https://connect.innovateuk.org/web/ictomorrow• UCL Decide- https://www.ucl.ac.uk/decide• Start-ups on Air at Google Campus-https://docs.google.com/spreadsheet/viewform?formkey=dEpuYlRFRFJ6SUVDdHVLRms3YmdBcmc6MQ• Hubventurelabs - http://hubwestminster.net/hubventurelabs• 3 Beards- http://www.3-beards.com/• Founders Fit- http://foundersfit.com/@capenterprise 10
  • 11. Prototyping@capenterprise 11
  • 12. Funding Product DevelopmentGrants & 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• IC Tomorrow- https://connect.innovateuk.org/web/ictomorrow• NESTA- http://www.nesta.org.uk/• 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/@capenterprise 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.• www.kickstarter.com• www.indiegogo.com (USA)• www.peoplefund.it• www.sponsume.com• https://www.buzzbnk.org• www.pleasefund.us• www.wefund.com• www.pozible.com• www.crowdfunder.co.uk• http://spacehive.com• https://www.banktothefuture.comSeed/ Early stage Investment Platforms:www.crowdcube.comwww.seedrs.com@capenterprise 13
  • 14. @capenterpriseNeed less than £10K to start?- 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- £1000- £15,000 Enterprise Loans for Under 25’s- www.startuploanslondon.co.uk or www.startuploans.com- 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/Need Less than£10K to Launch abusinessNo FundsGrant-www.j4b.co.ukUnemployed?New EnterpriseAllowance SchemeSelf FundBorrowWrite a simpleBusiness Plan & 12month cashflowCommunityDevelopmentFinance InstitutionStart-Up Loan Bank14
  • 15. Idea to Tech Business- Three Chasms.
  • 16. Accelerators In Londonhttp://www.f6s.com/https://capitallist.co
  • 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- http://angelhack.com/• Start-Up Weekend: http://london.startupweekend.org• Launch 48: http://launch48.comUSA• Y-combinator- http://ycombinator.com/• Tech Stars- http://www.techstars.com/• 500 start-ups- http://500.co/London• Seed Camp: http://www.seedcamp.com• Hackfwd: http://hackfwd.com• Bethnal Green Ventures - http://bethnalgreenventures.com/• BBC Worldwide Labs- http://www.bbcworldwide.com/digital/labs.aspx• Tech Stars London -http://www.techstars.com/program/locations/london/• Accelerator Academy- http://acceleratoracademy.com• Entrepreneur First- http://www.entrepreneurfirst.org.uk• Fintech Innovation Labs- https://www.fintechinnovationlablondon.co.uk/about.html#4• Wayra- http://wayra.org/en/wayra• The Bakery - http://thebakerylondon.com• Healthbox- http://www.healthboxaccelerator.com/• Collider12- http://collider12.com/• Red Bull Amplifier- http://www.redbullamplifier.com/Check out – www.f6s.com and http://www.seed-db.com/accelerators@capenterprise 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 21http://leananalyticsbook.com/ 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 introducedhttp://www.slideshare.net/slidesthatrock/how-to-pitch-a-vc-redesigned26Ten 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 - www.nesta.org.uk/investments• Capital 4 Enterprise- http://www.capitalforenterprise.gov.uk/portfolio• Angel Co-Fund- http://www.angelcofund.co.uk/• Mayor Of London Co-Investment Fund- http://www.mmcventures.com/• Enterprise Capital Fund- http://www.capitalforenterprise.gov.uk/ecfpSeed/ Early stage Investment Platforms:- www.crowdcube.com- www.seedrs.comCapital Enterprise top 10 Angel Network 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.html9. #1 seed- www.number1seed.co.uk10. Ascension Ventures- http://www.ascensionmedia.com/ascension-ventures.phpFor an alternative list check out-http://www.designcity.co.uk/angelnews/edition_94.htm#article1 or check outwww.angel.co@capenterprise 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 Listhttp://www.crunchbase.com/financial-organizations@capenterprise29
  • 30. 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- MEWE360: £1m fund set up by Ingenious Media- 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@capenterprise 30
  • 31. If you want an introduction thensend me a slide deckwww.capitalenterprise.orgjohn@capitalenterprise.org31@capenterprise