How to Raise Seed Funds and Venture Capital (VC) in Ireland

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Are you a Start-Up or more established company, seeking to raise Seed Funds or Venture Capital? This "how to" guide helps you to identify what stage your company is at from an investment point of view and identifies what makes your company investable.

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How to Raise Seed Funds and Venture Capital (VC) in Ireland

  1. How to Raise Seed Funds & Venture Capital (VC) in Ireland
  2. You want funds to grow your business?
  3. Some things to think about…
  4. Investors have expectations even Business Angels are not Santa
  5. Investors want their money back with a considerable return for them
  6. The higher the risk, the greater the return expected
  7. First of all, consider if you really want to grow? There are consequences to growth …
  8. Having an equity investor on board means:
  9. You will no longer make all key decisions yourself
  10. You will no longer make all key decisions yourself You have to account for company performance to someone else
  11. You will no longer make all key decisions yourself You have to account for company performance to someone else One day you are expected to “exit” (sell your whole business)
  12. Why do it?
  13. It’s all about the money. If you want to grow a large company, this may be the way to do it.
  14. Because even owning only 5% of €100m company (€5m) is better than 100% of €0.5m company (only €0.5m) 100% 5%
  15. In some cases, it may be possible to grow without external funding. But to do so you’ve got to be really, really outstanding amongst top competition to make that work!
  16. Are you ready for investment?
  17. Top 3 requirements for a company to be successful at fund raising
  18. One: Large Market, Access.
  19. A Large Growth Market must Exist and you must be capable of accessing that market
  20. Two: Customers, Scalability.
  21. Customers are the ultimate validation Business awards and column inches are great, but someone has got to pay for your ‘stuff’ – otherwise it literally has no value
  22. Your sales process needs to be scalable And not dependent on one person or a small number of people.
  23. Three: A Great Team.
  24. Teams build successful companies, not technology Delivery on the business plan will be the responsibility of the team.
  25. Money is a commodity. Knowledge is not. Do you have expertise and track record that is not easily replicated?
  26. Money is a commodity. Knowledge is not. Do you have expertise and track record that is not easily replicated? Your team should bring experience and expertise. Money is always just money. (Although Ts & Cs apply)
  27. Before you leave the building to find an investor be clear on…
  28. Spend. What are you going to spend the money on? Specifically. Not vague things like “salaries” and definitely not “contingency”
  29. Spend. What are you going to spend the money on? Specifically. Not vague things like “salaries” and definitely not “contingency” Solvency. How are you going to remain solvent until you have the funds in?
  30. Spend. What are you going to spend the money on? Specifically. Not vague things like “salaries” and definitely not “contingency” Solvency. How are you going to remain solvent until you have the funds in? How Much. How much money do you need as capital investment and when?
  31. Spend. How Much. What are you going to spend the money on? Specifically. Not vague things like “salaries” and definitely not “contingency” How much money do you need as capital investment and when? Solvency. ROI. How are you going to remain solvent until you have the funds in? What returns are going to be generated by this investment?
  32. Raising funds is like running a race. Most of the time that it takes to win a race is spent in the training beforehand.
  33. Raising funds is like running a race. Similarly, an investor proposition takes time to develop, fine tune and rehearse before you approach investors
  34. What Stage Are You At?
  35. Start-Up Capital Seed Capital Series A Series B Start-Up capital is the first capital for a business at concept stage. This finance is normally provided by friends, family and founders. It is a very high risk investment at this stage.
  36. Start-Up Capital Seed Capital Series A Series B The business has a proven product, has identified their market and may have early revenues. It’s still a high risk investment and the business is now seeking a model for repeatable, scalable expansion
  37. Start-Up Capital Seed Capital Series A Series B Development capital for businesses with a proven market, product / market fit The company is developing and refining their Customer Acquisition Costs, and investment risk is now mainly in the area of business execution
  38. Start-Up Capital Seed Capital Series A Series B Expansion funding for established companies, with no execution risk and known Customer Acquisition Costs.
  39. Ideally a business will partner with a VC from the outset who would be able to fund them through multiple rounds, all the way through to exit.
  40. How to win: AWESO ME Develop an Investor Proposition
  41. VCs only invest in 2 out of every 100 pitches. Your investor proposition needs to demonstrate that your company is capable and likely to provide a return for your investors.
  42. Getting into Gear
  43. Investors probably make up their minds in 20 minutes…
  44. Investors probably make up their minds in 20 minutes… …but may take a few months to tell you (in a formal term sheet)
  45. Investors probably make up their minds in 20 minutes… …but may take a few months to tell you (in a formal term sheet) That’s why it’s important to have a clear story before you meet investors. First impressions count.
  46. The process is just as important as the outcome when developing investor documents. It is all great training for your pitches.
  47. The more you know, the more confident you are and the more investable you become. You need to be comfortable with what you don’t know, as well as what you do.
  48. There are some documents you will absolutely need.
  49. Documents you will need, And I can help you perfect: 1. Forecasts (3 years Profit and Loss Accounts, Cash Flow, Balance Sheets) We may build a business model to simulate how your business works – spreadsheets which translate your strategy and tactics into numbers. The work that goes into specifying how you plan to expand is what is key.
  50. Documents you will need, And I can help you perfect: 2. One Pager What your company does and why it’s investible 3. Slide deck To summarise your investor proposition 4. Investor Memorandum A type of business plan, giving all key information for an investor
  51. Other areas that need work…
  52. Corporate planning Investor messaging Identify big issues: tax corporate structure, accounting, finance and legal. Jargon busting and translation into “what does this mean for us?” (You might need specialist advisors) (I can help you to master the lingo)
  53. Closing a Deal
  54. Investors want to own a % of your company for their investment. This is dependent on what the company is worth to them.
  55. €2 million for 25% stake
  56. €2 million for 25% stake Means your company is worth €8 million
  57. There isn’t a one size-fits-all formula for calculating the value of a company. So you should ‘shop around’ to find the deal that works best for all parties.
  58. The clock is ticking. Push for the truth early on and waste no time. Ask about their process, their funds and their timelines.
  59. A few more things to think about…
  60. Future expansion. Can this investor fund future equity financing rounds?
  61. Future expansion. Can this investor fund future equity financing rounds? Term sheet. How are you going to remain solvent until you have the funds in? What are the consequences of the terms?
  62. Future expansion. Can this investor fund future equity financing rounds? Term sheet. How are you going to remain solvent until you have the funds in? What are the consequences of the terms? Due diligence. Investors will (should) do a deep audit of the company’s legal, financial and operational segments.
  63. Future expansion. Can this investor fund future equity financing rounds? Term sheet. How are you going to remain solvent until you have the funds in? What are the consequences of the terms? Due diligence. Investors will (should) do a deep audit of the company’s legal, financial and operational segments. Two way street. You can do due diligence on your investors by checking with other clients
  64. Pfft, this sounds easy… I could do this myself
  65. Can you do all that stuff yourself? Really?
  66. Maybe, some of it. But even if you can… Is it a good use of your time?
  67. You need to be closing customer deals & keep momentum going in building the business
  68. You aren’t going to raise equity many times, but when you do, it is literally worth doing it right
  69. That’s where I can help! ins ire) us dina Co traor len isor ex He v (sta p ad rtu
  70. We have helped Irish companies to raise over €30 million
  71. My associates and I have over 50 years combined experience in corporate finance, fundraising and delivering tech company growth. (From the inside as well as being advisors)
  72. Warning: I will be honest with you and I will challenge you.
  73. The focus is on winning and this requires commitment and hard work from you too!
  74. FIVE Things I can help you with
  75. Calculate and capture your value proposition in investor documents
  76. Calculate and capture your value proposition in investor documents Source appropriate investors and assist with Enterprise Ireland as needed
  77. Calculate and capture your value proposition in investor documents Source appropriate investors and assist with Enterprise Ireland as needed Manage the funding round and support you through pitches
  78. Calculate and capture your value proposition in investor documents Source appropriate investors and assist with Enterprise Ireland as needed Manage the funding round and support you through pitches Negotiate terms and guide you through closing the legal documents
  79. Calculate and capture your value proposition in investor documents Source appropriate investors and assist with Enterprise Ireland as needed Manage the funding round and support you through pitches Negotiate terms and guide you through closing the legal documents Oversee due diligence, close the round and bring in the funds
  80. Get in touch today! Click here to talk to me on Twitter Click here to connect on LinkedIn @ helen@xbs.ie Or call me +353 (0) 86 325 5665 www.xbs.ie

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