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Finance for Startups, kick-off (Feb 7th 2012)

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Finance for Startups, kick-off (Feb 7th 2012)

  1. 1. Finance for Startups Martin van Wunnik Xavier Corman07/02/2012 Xavier Corman | Martin van Wunnik 1
  2. 2. Sponsors07/02/2012 Xavier Corman | Martin van Wunnik 2
  3. 3. Finance for Startups • Introduction • Company Setup • Accounting • Financial Plan • Funding your startup • Valuation / Dilution • Workshop’s details • Q&A • Pizza07/02/2012 Xavier Corman | Martin van Wunnik 3
  4. 4. Who we are ? Martin van Wunnik Xavier Corman07/02/2012 Xavier Corman | Martin van Wunnik 4
  5. 5. This presentation is available for free: http://www.meetup.com/Finance-for-Startups http://www.slideshare.net/xaviercorman07/02/2012 Xavier Corman | Martin van Wunnik 5
  6. 6. Creativity level Finance & Accounting level07/02/2012 Xavier Corman | Martin van Wunnik 6
  7. 7. Creativity level Reality check Funding Value ? Investments, Costs, Revenues, Cash Financial Plan & Elevator pitch Organization/Company Finance & Accounting Team/Partners level07/02/2012 Xavier Corman | Martin van Wunnik 7 7
  8. 8. Creativity level 1.000 EUR 21% VAT (quarterly or monthly refund request/compensation) Investments Cash out: 1.210 EUR Cash in: 210 EUR (>3m) Profit impact: 200 EUR over 5y Cost Cash out: 1.210 EUR Cash in: 210 EUR (>3m) Profit impact: 1.000 EUR Discounted Cash Flows Finance & Accounting level07/02/2012 Xavier Corman | Martin van Wunnik 8
  9. 9. Why Finance for Startups ? If you dont think about the future, you cannot have one. John Golsworthy where you want to go You need to know how you are supposed to go07/02/2012 Xavier Corman | Martin van Wunnik 9
  10. 10. CASH 07/02/2012 Xavier Corman | Martin van Wunnik 10
  11. 11. Company Setup » Why should I ? » Capital » Hats/Personalities07/02/2012 Xavier Corman | Martin van Wunnik 11 11
  12. 12. Why should I ? Limit your liabilities ! Professional touch Fiscal 34% (24% for 3y) Succession ... Formalities & some costs (bank, notary, KBO/CBE, social secretary) Double entry accounting Revisor for in-natura contributions07/02/2012 Xavier Corman | Martin van Wunnik 12 12
  13. 13. Minimum capital Legal BVBA-SPRL (min.1) CVBA-SCRL (flexible) 18.550 EUR 6.200 EUR (or 12.400 EUR) SA-NV (min.2): 61.500 EUR REAL minimum = Business required !07/02/2012 Xavier Corman | Martin van Wunnik 13 13
  14. 14. Shareholders Control (>51%) Absolute / Relative majority 40% - 60% 40% - 10% - 10% -10% -10% -10% -10% Voting Rights Class A & B Minority (blocking) interest Investors per phase (dilution)! Stock options: fiscal implications, buyer required vesting conditions : targets, period (4y)07/02/2012 Xavier Corman | Martin van Wunnik 14 14
  15. 15. Hats/Personalities Founders: 3 years responsibility07/02/2012 Xavier Corman | Martin van Wunnik 15 15
  16. 16. Accounting: notions • Balance Sheet – Bilan – Balans • Profit & Loss – Compte de résultat – Winst-en Verliesrekening • Cash-flow – Trésorerie – Schatkist • Financial Plan – Plan financier – Financieel Plan07/02/2012 Xavier Corman | Martin van Wunnik 16
  17. 17. Accounting: Balance Sheet ACTIVE PASSIVE Equity (Capital/Kapitaal) Non Current Assets (Actifs Immobilisés/ Vast Activa) LT Debts Current Assets (Actifs circulants/ Vlottend Activa) ST Debts07/02/2012 Xavier Corman | Martin van Wunnik 17
  18. 18. Accounting: Profit & Loss (P&L) COGS (Cost of Sales) Personnel Costs General Expenditures Revenues (Sales…) Depreciation Financial cost Profit07/02/2012 Xavier Corman | Martin van Wunnik 18
  19. 19. Financial PlanContent – Assumptions – Profit & Loss – Balance Sheet / Investment – Cash-Flow -> Cash needed – Valuation of the project – Profitability / return of the project07/02/2012 Xavier Corman | Martin van Wunnik 19
  20. 20. Financial Plan in 10 min• Don’t waste your time in developing a huge financial plan before to be sure that your project is viable !• In many case, in less than 10 minutes, you can see if your idea worst something.• How to make a very quick financial plan ?07/02/2012 Xavier Corman | Martin van Wunnik 20
  21. 21. Financial Plan in 10 min /questions What are your revenues ? What are your costs ? What are your investments ? How many persons for your project ?07/02/2012 Xavier Corman | Martin van Wunnik 21
  22. 22. Financial Plan / Prerequisites & Assumptions• Financial plan for 3 to 5 years• Monthly or Quarterly base• Excel or Calc is your friend• Start by listing your main assumptions07/02/2012 Xavier Corman | Martin van Wunnik 22
  23. 23. Financial Plan / Tips for assumptions• Office: 25 m²/person• Price of offices: EUR 100/m²/year + 15 % for maintenance• Insurances: 1 % of revenues• Marketing: define a % of revenues + starting investment• Don’t forget lawyers, accountant, social secretary, office supplies…07/02/2012 Xavier Corman | Martin van Wunnik 23
  24. 24. Financial Plan / Profit & Loss Revenues (Sales…) COGS (Cost of Sales) General Expenditures COSTS Personnel Costs Financial cost Depreciation CASH CASH-FLOW IF NEGATIVE DRAIN Profit07/02/2012 Xavier Corman | Martin van Wunnik 24
  25. 25. Financial Plan / Investments List all your scheduled investments YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 507/02/2012 Xavier Corman | Martin van Wunnik 25
  26. 26. Required Cash-Flow07/02/2012 Xavier Corman | Martin van Wunnik 26
  27. 27. Funding Some remarks Principles Options07/02/2012 Xavier Corman | Martin van Wunnik 27 27
  28. 28. Funding, ‘Financing’ And entrepreneurs? They seem to have confused the definition of entrepreneurship altogether. Entrepreneurship, they mistakenly believe, equals financing! This is wrong. Over 99% of entrepreneurs who seek funding get rejected. Yet, the entire world is focused on the 1% that is "fundable." http://www.readwriteweb.com/start/2012/01/the-other-99-of-entrepreneurs.php07/02/2012 Xavier Corman | Martin van Wunnik 28 28
  29. 29. http://www.ideaowl.com/blog/2011/06/microconf-2011-3-surprises- and-learnings-from-best-conference-ever/07/02/2012 Xavier Corman | Martin van Wunnik 29
  30. 30. Interest – Returns 100 102 Bank 100 0..1000 Stock market 100 100 F.F.F. 100 107 Bank 100 130 BA / VC07/02/2012 Xavier Corman | Martin van Wunnik 30 30
  31. 31. 100+7=107 Bank Principal & Interest Able to pay back over time Guarantees07/02/2012 Xavier Corman | Martin van Wunnik 31 31
  32. 32. How to finance your start-up ?07/02/2012 Xavier Corman | Martin van Wunnik 32
  33. 33. 07/02/2012 Xavier Corman | Martin van Wunnik 33 33
  34. 34. Valuation• The value of any business is the present value of the future income stream• You sell future virtual profits for present real money07/02/2012 Xavier Corman | Martin van Wunnik 34
  35. 35. Valuation Exit Money s ue iq hn Tec up h- tc Ca Sweat Money Year 1 Year 2 Year 3 Year 4 Year 5 Year 607/02/2012 Xavier Corman | Martin van Wunnik 35
  36. 36. Valuation - What is dilution ?07/02/2012 Xavier Corman | Martin van Wunnik 36
  37. 37. Next Workshops Venues still to be defined (Brussels)07/02/2012 Xavier Corman | Martin van Wunnik 37
  38. 38. There is no free-lunch* Each workshop = 90 EUR vat incl. WeStartup members: 50 EUR (VAT incl.) MAX 10 pers/workshop 2 hours + Slides + Foods & Drinks * Milton Friedman07/02/2012 Xavier Corman | Martin van Wunnik 38
  39. 39. Questions & Answers Free download: http://www.slideshare.net/xavierCorman http://www.meetup.com/Finance-for-Startups/messages/boards/07/02/2012 Xavier Corman | Martin van Wunnik 39

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