Where to go when funders say no! final pdf

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STARTup AMERICA presents 30 minutes with Professor Sean Wise on the topic: Where to go, when funders say no!

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Where to go when funders say no! final pdf

  1. 1. Where to Go when: Funders say no (and the dough don’t flow)Prof. Sean Wise, www.SeanWise.com @seanwise
  2. 2. A bit about meProf. Sean Wise, www.SeanWise.com @seanwise
  3. 3. Disclaimer The views and opinions expressed in this webinar are those of the authors and do not necessarily reflect the official policy or position of STARTUP AMERICA, Ryerson University, or any agency of the U.S. government. The information contained herein is for informational purposes only and may not be relied upon as legal advice. It is subject to change and no representations are made by expressing such. The information contained herein may be subject to local laws, regulations and policy. Viewers are encouraged to obtain independent legal advice before proceeding.Prof. Sean Wise, www.SeanWise.com @seanwise
  4. 4. DefinitionsProf. Sean Wise, www.SeanWise.com @seanwise
  5. 5. SME vs. Startup SMEs Startups Number of Low (25 or less) Low (25 or less) Employees Age Less than 5 years Less than 5 years Goals Sustainable Employment VS Change the World Steady Growth $100M or Bust Indicia Family Owned The J curve Service Innovation & IP Local global e.g. Dry Cleaner Mobile Data Application *** This discussion only applies to StartupsProf. Sean Wise, www.SeanWise.com @seanwise
  6. 6. Prof. Sean Wise, www.SeanWise.com @seanwise
  7. 7. Prof. Sean Wise, www.SeanWise.com @seanwise
  8. 8. Prof. Sean Wise, www.SeanWise.com @seanwise
  9. 9. Owner vs. Founder Different Goals Different MindsetProf. Sean Wise, www.SeanWise.com @seanwise
  10. 10. VC vs. Angel VCs Angels Definition Professional Fund HNWI who invest their own Managers who invest money OPM on 5-7 year cycle Size Dependant on Fund Dependant on Mood Structure Often Proof of Concept Smart Money with a Halo incorrectly VS Effect considered Other than Halo effect, Network, Experience, Mentorship money… Standardization Deal terms Bigger, more Smaller, faster, more founder complicated based on like portfolio approachProf. Sean Wise, www.SeanWise.com @seanwise
  11. 11. Why Funders say no! About You Not About You• Not enough Proof of • Doesn’t fit with last deal Concept – Management Risk  • Doesn’t fit with declared are these the guys? approach – Magic Risk  is it 10x • Not hot space better? – Market Risk  will anyone care?• Hard to work with• Terms don’t fitProf. Sean Wise, www.SeanWise.com @seanwise
  12. 12. Where to Go when: Funders say no (and the dough don’t flow)Prof. Sean Wise, www.SeanWise.com @seanwise
  13. 13. Changes in the Ecosystem • Cost to Launch: – 1998: $5,000,000 – 2008: $500,000 – 2012: $50,000 • Recession since 2008 • Two Decades of Growth in High Tech • The Internet democratizes everything • Funds now larger but fewerProf. Sean Wise, www.SeanWise.com @seanwise
  14. 14. Prof. Sean Wise, www.SeanWise.com @seanwise
  15. 15. Option #1 Funding from Future Clients • Funding by Users, Clients, Advertisers • Funding by Revenue • Funding by Smart Money • Often labelled BootstrappingProf. Sean Wise, www.SeanWise.com @seanwise
  16. 16. Crowdfunding • This week new law passed?Prof. Sean Wise, www.SeanWise.com @seanwise
  17. 17. Prof. Sean Wise, www.SeanWise.com @seanwise
  18. 18. Prof. Sean Wise, www.SeanWise.com @seanwise
  19. 19. Prof. Sean Wise, www.SeanWise.com @seanwise
  20. 20. Option #2 Funding from Incubators • 5-10 startups per cohort • Mentorship • Local / Resident • $25,000 seed funds • 6 months to DEMO dayProf. Sean Wise, www.SeanWise.com @seanwise
  21. 21. Prof. Sean Wise, www.SeanWise.com @seanwise
  22. 22. Prof. Sean Wise, www.SeanWise.com @seanwise
  23. 23. Prof. Sean Wise, www.SeanWise.com @seanwise
  24. 24. Option #3 Funding from Friends & FamilyProf. Sean Wise, www.SeanWise.com @seanwise
  25. 25. Prof. Sean Wise, www.SeanWise.com @seanwise
  26. 26. Spectrum of Financing High Founder, friends and family Business Angels Level of Investment Venture Capitalists Risk seed/early stage/mezz Assumed by Investor Corporate VC Equity Markets Junior ================> Senior Low Commercial banks Seed Start-Up Early Growth Established Stage of BusinessProf. Sean Wise, www.SeanWise.com @seanwise
  27. 27. Funding from Friends & Family • Rollup individuals into a hold corp • Use a Shareholders’ Agreement • Maximize Tax Credits and Minimize Cap Gains • Consider not setting ValuationProf. Sean Wise, www.SeanWise.com @seanwise
  28. 28. Other Options• Startup Weekend• Grants & Tax Credits• Economic Stimulus• Sell Services : Build ProductsProf. Sean Wise, www.SeanWise.com @seanwise
  29. 29. Where to go when the Funders say no? 1. Future Customers and Crowdfunding 2. Accelerators & Incubators 3. Friends & FamilyProf. Sean Wise, www.SeanWise.com @seanwise
  30. 30. Great ResourcesProf. Sean Wise, www.SeanWise.com @seanwise
  31. 31. Great ResourcesProf. Sean Wise, www.SeanWise.com @seanwise
  32. 32. FRIDAYS @ 8Prof. Sean Wise, www.SeanWise.com @seanwise
  33. 33. But that’s not all… Free digital Copy for all of you, courtesy of: www.HOTorNOTtheBOOK.com Click: FREE BOOK Enter: PROFITProf. Sean Wise, www.SeanWise.com @seanwise
  34. 34. Q and A More Questions? email me: sean.wise@ryerson.caProf. Sean Wise, www.SeanWise.com @seanwise

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