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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 ...

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 Presentation Transcript

  • 1. Setting up for Global SuccessWednesday, 18 April 2012
  • 2. David Jones - Co-Founder, StreetHawk, ThreatMetrix @djinoz Hamish Hawthorn - CEO, ATP Innovations @hamishhawthornWednesday, 18 April 2012
  • 3. FOUNDERS 80% Percentage of 0.00001% businesses that fail in first year Percentage of startups called InstagramWednesday, 18 April 2012
  • 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. YOUR GOALS DEFINE THE APPROACHWednesday, 18 April 2012
  • 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? http://www.geoffmcqueen.com/2010/07/02/going-to-america-online-business-from-down-under/Wednesday, 18 April 2012
  • 7. CAN YOU SELL FROM AUSTRALIA? Austria?Wednesday, 18 April 2012
  • 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 http://www.geoffmcqueen.com/2011/09/28/e-3-visa-for-australians-how-to/Wednesday, 18 April 2012
  • 9. VC FUNDING FIND A DEAL THAT FITSWednesday, 18 April 2012
  • 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. 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. AUSSIE GRANTS IMPACT OF US HQ & ENG ON GRANTSWednesday, 18 April 2012
  • 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. 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. 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. 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. 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. 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. WHAT WE WANT YOU TO TAKE AWAY TODAY...Wednesday, 18 April 2012
  • 20. BEGIN WITH THE END IN MIND (YOU MAY GO FURTHER THAN YOU EXPECT)Wednesday, 18 April 2012
  • 21. QUESTIONS? http://www.slideshare.net/djinoz @hamishhawthorn @djinozWednesday, 18 April 2012