Setting up for Global Success


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Swinging for the fences often needs VC funding and overseas HQ. So a few prudent steps in company structure can maximise flexibility for the founders, staff and investors as you head global. As seasoned entrepreneurs and angel investors Hamish & David will share what they have learnt about the maze of founder vesting, VC raising, flip-ups, Australian grants, investor/acquirer readiness ad share/option plans.

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Setting up for Global Success

  1. 1. Setting up for Global SuccessWednesday, 18 April 2012
  2. 2. David Jones - Co-Founder, StreetHawk, ThreatMetrix @djinoz Hamish Hawthorn - CEO, ATP Innovations @hamishhawthornWednesday, 18 April 2012
  3. 3. FOUNDERS 80% Percentage of 0.00001% businesses that fail in first year Percentage of startups called InstagramWednesday, 18 April 2012
  4. 4. FOUNDERS RECOGNISE: some marriages dont last ACTION: - founder vesting - enshrined in a shareholder agreement - IP assignment agreement - vesting shares vs optionsWednesday, 18 April 2012
  5. 5. YOUR GOALS DEFINE THE APPROACHWednesday, 18 April 2012
  6. 6. YOUR GOALS DEFINE YOUR ACTIONS RECOGNISE: Will you collect $US (or anything other than AUD) Lifestyle or growth business? “Begin with the end in mind” ACTION: - Founders to agree the exit or dividends - US Bank Account?, 18 April 2012
  7. 7. CAN YOU SELL FROM AUSTRALIA? Austria?Wednesday, 18 April 2012
  8. 8. CAN YOU SELL FROM AUSTRALIA? RECOGNISE: If your product is consumer: you need hype (sv hype) If your product is enterprise: you need channel or direct Austria? sales If your product is OEM: you need to be “there”. ACTION: - Relocate to your customers, 18 April 2012
  9. 9. VC FUNDING FIND A DEAL THAT FITSWednesday, 18 April 2012
  10. 10. VC FUNDING - THE AUSSIE LANDSCAPE RECOGNISE: SeriesA VCs in OZ < 3 (they are here today) Telstra is the new kid on the block Valuations/Terms less founder-friendly (e.g participating preference) If you are not Atlassian then US VCs wonʼt fund you. (statistically correct) “I don’t invest in any company I can’t For US VCs drive to in an hour CEO needs to be in the US If pre-product market-fit team needs to be in the US Sales in US. UX Eng in US. Support in US.Wednesday, 18 April 2012
  11. 11. FUNDING - THE AUSSIE LANDSCAPE WARNING: - “Flip-ups” can be very expensive - US VCs fund into US Inc. ACTION: - Maybe incorporate in Delaware day1 - Get US digs/serviced office - Make your PTY a subsidiary (see grants)Wednesday, 18 April 2012
  12. 12. AUSSIE GRANTS IMPACT OF US HQ & ENG ON GRANTSWednesday, 18 April 2012
  13. 13. AUSSIE GRANTS Famous last words: Itʼs free money, isnt it? Non-diluting funds are great, but you need to understand whatʼs right for your company. Tax payer $ - National BenefitsWednesday, 18 April 2012
  14. 14. AUSSIE GRANTS Export Market Development Grants (EMDG) Eligibility: Australian company, promoting the export of goods, services intellectual property and know-how. Expenditure: Overseas representatives, consultants, market visits, communications, trade shows, IP protection Value: up to 50% of eligible expenditure (cap, threshold, timing - claimed retrospectively)Wednesday, 18 April 2012
  15. 15. AUSSIE GRANTS R&D Tax Incentive Support of eligible R&D activities Eligibility: Australian company; O/S company, but an Australian resident for tax purposes; O/S company, but double tax agreement and carrying on a business in Aust. Expenditure: Labour costs, equipment, some overheads - lots of rules Value: 45% for <$20m revenue (uncapped); claimed retrospectively (quarterly next year?)Wednesday, 18 April 2012
  16. 16. AUSSIE GRANTS Commercialisation Australia Eligibility: Non-tax exempt company incorporated in Australia, with <$10m (or $50 for ESC) turnover, with ownership, access to, or the beneficial use of, any necessary IP to carry out and commercialise the project. Expenditure: Projects to produce, establish the commercial viability of, or commercialise, new product process or service - generally expenditure in Australia, but exceptions for good reason. Value: Various - from $50k for S&K to $2m for ESCWednesday, 18 April 2012
  17. 17. AUSSIE GRANTS NSW Govt Grants ATS; Tech Vouchers, Interactive Media Fund Eligibility: As above, but with a NSW-focus...”NSW Based Businesses”, “Incorporated in NSW” Expenditure: Varies, but similar to previous programs. ATS shares similarities with EMDG, but strong complementarity Value: typically 50% of eligible expenditure - some in-kind of matching $Wednesday, 18 April 2012
  18. 18. THE ACQUIRER’S VIEW Think about how you are positioning yourself in the eyes of the natural acquirer? How are you differentiating yourself from the 5 other companies who are hoping to get bought as well?Wednesday, 18 April 2012
  19. 19. WHAT WE WANT YOU TO TAKE AWAY TODAY...Wednesday, 18 April 2012
  21. 21. QUESTIONS? @hamishhawthorn @djinozWednesday, 18 April 2012