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Hong Kong Funding Options presentation at BarCamp HK

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Overview of some non-dilutive funding options available to startups in Hong Kong. See a short description at http://www.corykidd.net/blog/?p=5.

Overview of some non-dilutive funding options available to startups in Hong Kong. See a short description at http://www.corykidd.net/blog/?p=5.

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  • 1. Non-Dilutive Funding in Hong Kong Dr. Cory Kidd Founder and CEO Intuitive Automata coryk@iabots.com
  • 2. Why you’re in the rightplace to raise some money and not get screwed Dr. Cory Kidd Founder and CEO Intuitive Automata coryk@iabots.com
  • 3. Example: Raise 3 Rounds Initial SplitFounder A 45%Founder B 30%Founder C 25%
  • 4. Example: Raise 3 Rounds Initial Split Raise 200K for 20%Founder A 45% 36%Founder B 30% 24%Founder C 25% 20%Investor A 20%
  • 5. Example: Raise 3 Rounds Initial Split Raise 200K for 20% Raise 750K for 15%Founder A 45% 36% 31%Founder B 30% 24% 20%Founder C 25% 20% 17%Investor A 20% 17%Investor B 15%
  • 6. Example: Raise 3 Rounds Initial Split Raise 200K for 20% Raise 750K for 15% Raise 3M for 15%Founder A 45% 36% 31% 26%Founder B 30% 24% 20% 17%Founder C 25% 20% 17% 14%Investor A 20% 17% 14%Investor B 15% 13%Investor C 15%
  • 7. Example: Same Funding, One Investor Initial SplitFounder A 45%Founder B 30%Founder C 25%
  • 8. Example: Same Funding, One Investor Initial Split 200K IncubationFounder A 45% 45%Founder B 30% 30%Founder C 25% 25%
  • 9. Example: Same Funding, One Investor Initial Split 200K Incubation 750K LoanFounder A 45% 45% 45%Founder B 30% 30% 30%Founder C 25% 25% 25%
  • 10. Example: Same Funding, One Investor Initial Split 200K Incubation 750K Loan Raise 3M for 15%Founder A 45% 45% 45% 38%Founder B 30% 30% 30% 26%Founder C 25% 25% 25% 21%Investor A 15%
  • 11. Examples Compared Initial Split Raise 200K for 20% Raise 750K for 15% Raise 3M for 15%Founder A 45% 36% 31% 26%Founder B 30% 24% 20% 17%Founder C 25% 20% 17% 14%Investor A 20% 17% 14%Investor B 15% 13%Investor C 15% Initial Split 200K Incubation 750K Loan Raise 3M for 15% Founder A 45% 45% 45% 38% Founder B 30% 30% 30% 26% Founder C 25% 25% 25% 21% Investor A 15%
  • 12. Examples Compared • Sell for $30 million • In the 3 rounds of investors case, Founder A’s share is $7.8 million* • In the incubation program, loan, and one investor case, Founder A’s share is $11.5 million**with preferences and other terms that come with many investor shares, the mathwon’t work out quite this simply, but the magnitude of the difference will be similar
  • 13. So what can I do?• Be Lean• Generate revenue• Join an incubators/accelerator program• Get a loan
  • 14. Two HK programs• Hong Kong Science Park Incu-Tech Programme (or newer Incu-App Programme)• SERAP interest-free loan
  • 15. Incu-Tech• 3 year incubation program• Rent-free office space for the first year• Partial expense reimbursement up to HK $645,000• At Hong Kong Science and Technology Park
  • 16. Incu-Tech: Application• Applying is like raising money -- you’ll present a business plan to convince the committee that you’re building a company that should be in the program and the technology park.• Plan 2-3 months from start to approval if you have your plan together.
  • 17. Incu-Tech: Questions?
  • 18. SERAP• Stands for Small Entrepreneur Research Assistance Program• It’s an interest-free loan that gets paid back as a percentage of revenue or later investment• Maximum amount is currently HK $6 million
  • 19. SERAP: Application• Applying means you have to convince the committee that you have a technologically innovative project that will make money in a few years.• It’s defined by the “project” and not the company, so you present details of the work that you’re doing.
  • 20. SERAP: Application• The hardest part is the budget: you need a detailed, line-by-line, month-by-month budget for the duration of the project• Plan for a month of application preparation and then 2-3 months from submission to project start
  • 21. SERAP: Questions?
  • 22. Other Resources• Many other programs and spaces: • Accelerator HK • HAXLR8R (Shenzhen) • Co-working spaces like CoCoon, the Hive, BootHK • Cyberport • Other ITC (government) funding schemes
  • 23. Other ResourcesPeople:There are a lot of people in Hong Kong -- andhere today at BarCamp -- who have createdgrowing companies. Find us in person oronline and ask your questions.I’m always happy to provide more informationabout how we have funded Intuitive Automataand how you can apply those lessons to yourstartup.
  • 24. Cory Kiddcoryk@iabots.com Twitter: coryk