stevemontoya.012805.ppt

663 views

Published on

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

stevemontoya.012805.ppt

  1. 1.           January 28 th , 2005 Steve Montoya Azul Venture Partners Vice-President, Hispanic-Net Venture Capital Funding
  2. 2. Outline <ul><li>Funding </li></ul><ul><li>Equity Financing </li></ul><ul><li>Venture Capital </li></ul><ul><li>VC Statistics </li></ul><ul><li>Advice </li></ul>
  3. 3. Financing Alternatives <ul><li>Bootstrap </li></ul><ul><li>Debt </li></ul><ul><li>Customers/Partnerships </li></ul><ul><li>Equity </li></ul>
  4. 4. Equity Sources <ul><li>Personal </li></ul><ul><li>Angel Investors </li></ul><ul><li>Partnerships/Corporations </li></ul><ul><li>Government </li></ul><ul><li>Private Capital Firms </li></ul><ul><li>Venture Capital Firms </li></ul>
  5. 5. Equity Investment Model <ul><li>Purchase % of Ownership </li></ul><ul><li>Risk Capital </li></ul><ul><li>High Growth Businesses </li></ul><ul><li>Strong Management </li></ul><ul><li>Realize a Large ROI </li></ul><ul><li>7 to 10x Within 5 Years </li></ul>
  6. 6. Stages of Equity Financing <ul><li>Seed </li></ul><ul><li>Start-up/First </li></ul><ul><li>Second/Third </li></ul><ul><li>Expansion </li></ul><ul><li>Mezzanine </li></ul><ul><li>Buyout </li></ul>Seed Angel Series A Series B, C, … Mezzanine Early Stage Late Stage Hot Tip; Customer Commit
  7. 7. Venture Capital <ul><li>Definition </li></ul>An investment in a start-up business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.
  8. 8. Venture Capital <ul><li>Why Use Venture Capital? </li></ul><ul><ul><li>Require substantial capital to develop the product or service. </li></ul></ul><ul><ul><li>Must expand quickly to hit the market window. </li></ul></ul><ul><ul><li>Need the contacts to grow the business </li></ul></ul>
  9. 9. Venture Capital <ul><li>What do Venture Capitalist Have? </li></ul><ul><ul><li>Industry Expertise </li></ul></ul><ul><ul><li>Industry Contacts </li></ul></ul><ul><ul><li>Vast Experience in Starting, Growing, Selling Companies </li></ul></ul><ul><ul><li>Enjoy Working With Young Companies </li></ul></ul><ul><ul><li>They Want to Make Money !!! </li></ul></ul>
  10. 10. VC Investment Preference <ul><li>Stage of Financing </li></ul><ul><li>Amount of Capital </li></ul><ul><li>Geographic </li></ul><ul><li>Industry Specialization </li></ul><ul><li>Management Team </li></ul><ul><li>Strong Referrals </li></ul>
  11. 11. Venture Capitalists Look At <ul><li>Vision </li></ul><ul><li>Leadership </li></ul><ul><li>Experienced Team </li></ul><ul><li>Target Market Potential </li></ul><ul><li>Business Model </li></ul><ul><li>Revenues, Revenues, Revenues </li></ul>
  12. 12. How to Approach VCs? <ul><li>Option 1 - Referral </li></ul><ul><li>Option 2 - Referral </li></ul><ul><li>Option 3 - Referral </li></ul>
  13. 13. Venture Capital <ul><li>Your Must Have’s </li></ul><ul><ul><ul><li>Clear Differentiation </li></ul></ul></ul><ul><ul><ul><li>High Barriers to Entry </li></ul></ul></ul><ul><ul><ul><li>Market Expertise </li></ul></ul></ul><ul><ul><ul><li>Business Model </li></ul></ul></ul><ul><ul><ul><li>Financials </li></ul></ul></ul><ul><ul><ul><li>Strong Management Team </li></ul></ul></ul>
  14. 14. Investments—V C Industry Source: Moneytree Survey (PWC)
  15. 15. 3 rd Qtr 2004 – National Top 6 Investments by Industry <ul><li>Software 22% </li></ul><ul><li>Biomedical, Health 19% </li></ul><ul><li>Telecomm., Networking 17% </li></ul><ul><li>Medical Devices & Equipment 11% </li></ul><ul><li>Semiconductors 8% </li></ul><ul><li>Media, Entertainment 3% </li></ul><ul><li>Source: Venture Economics (www.ventureeconomics.com) </li></ul>
  16. 16. 3 rd Qtr 2004 – National Top 6 Investments by Region <ul><li>Silicon Valley 33% </li></ul><ul><li>New York 11% </li></ul><ul><li>New England 10% </li></ul><ul><li>Southeast 6% </li></ul><ul><li>Northwest 5% </li></ul><ul><li>Texas 4% </li></ul>Source: Venture Economics (www.ventureeconomics.com)
  17. 17. 3 rd Qtr 2004 – National Investments by Rounds <ul><li>Seed 0.4% </li></ul><ul><li>Early Stage 21% </li></ul><ul><li>Expansion 49% </li></ul><ul><li>Later Stage 30% </li></ul>Source: Venture Economics (www.ventureeconomics.com)
  18. 18. Overview 2004 <ul><li>Investments have stopped declining </li></ul><ul><ul><li>2003 Investments – $18.8B </li></ul></ul><ul><ul><li>2004 Investments – $20.8B </li></ul></ul><ul><li>1900 Companies funded – remains flat </li></ul><ul><li>$8.5M Average investment – remains flat </li></ul><ul><li>Most $ still going into existing portfolios </li></ul>Source: Pricewaterhouse Coopers (www.pwcmoneytree.com)
  19. 19. Advice <ul><li>Venture Capital </li></ul><ul><ul><ul><li>It’s a Marriage, Not a Date </li></ul></ul></ul><ul><ul><ul><li>One Opportunity for a First Impression </li></ul></ul></ul><ul><ul><ul><li>Seek Value-Added Partner </li></ul></ul></ul><ul><ul><ul><li>Ask Questions </li></ul></ul></ul><ul><li>Funding </li></ul><ul><ul><ul><li>Understand Your Options </li></ul></ul></ul><ul><ul><ul><li>Best Time to Raise $$$ is When You Don’t Need It </li></ul></ul></ul><ul><ul><ul><li>Control Your Expenses, Understand Financials </li></ul></ul></ul>
  20. 20. Thank You

×