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.

1. Setting up
for Global Success
Wednesday, 18 April 2012

2. David Jones - Co-Founder, StreetHawk, ThreatMetrix
@djinoz
Hamish Hawthorn - CEO, ATP Innovations
@hamishhawthorn
Wednesday, 18 April 2012

3. FOUNDERS
80%
Percentage of 0.00001%
businesses that
fail in first year
Percentage of
startups called
Instagram
Wednesday, 18 April 2012

4. FOUNDERS
RECOGNISE:
some marriages don't last
ACTION:
- founder vesting
- enshrined in a shareholder agreement
- IP assignment agreement
- vesting shares vs options
Wednesday, 18 April 2012

5. YOUR GOALS DEFINE THE APPROACH
Wednesday, 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 FITS
Wednesday, 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 GRANTS
Wednesday, 18 April 2012

13. AUSSIE GRANTS
Famous last words:
Itʼs free money, isn't it?
Non-diluting funds are great, but you
need to understand whatʼs right for your
company.
Tax payer $ - National Benefits
Wednesday, 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 ESC
Wednesday, 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
@djinoz
Wednesday, 18 April 2012