Starting-Up Your Business

3,150 views

Published on

All the things an entrepreneur or start-up needs to know. Is it about the idea? Is it about a great product? How to build a team? Do I need a business plan? How do I raise money? What is a great business strategy?

Published in: Business, Economy & Finance
4 Comments
27 Likes
Statistics
Notes
No Downloads
Views
Total views
3,150
On SlideShare
0
From Embeds
0
Number of Embeds
95
Actions
Shares
0
Downloads
186
Comments
4
Likes
27
Embeds 0
No embeds

No notes for slide

Starting-Up Your Business

  1. 1. This document is proprietary & confidential information All you need to know STARTING UP
  2. 2. Idea First steps Business plan Team & sharing Using help Product Vision Go to market Money Company TOPICS
  3. 3. This document is proprietary & confidential information I have an idea STARTING UP
  4. 4. I HAVE AN IDEA!
  5. 5. Should I hide it?
  6. 6. I have no competition
  7. 7. Idea for sale!
  8. 8. I HAVE AN IDEA! Your idea is worth zero Everyone has an idea Secrets don’t make businesses Consumers pay for businesses/products Buyers acquire businesses/products Investors search for businesses/products
  9. 9. I AM UNIQUE Did you Google your idea? There is always someone else No competition = no market! No research = deal breaking
  10. 10. IDEA vs EXECUTION Execution is everything Work! Make it happen! Do it amazingly faster, better, bigger Stop wishing, start doing
  11. 11. This document is proprietary & confidential information how I start? STARTING UP
  12. 12. FIRST STEPS
  13. 13. I need connections!
  14. 14. I need money!
  15. 15. I need a company!
  16. 16. I need an office!
  17. 17. YOU REALLY NEED ‘Hungry & foolish’ co-founders A ‘garage’ Good use of online tools: Promotion, Billing, Distribution Very hard work
  18. 18. YOU DON’T NEED Money Residence (an office) Registered company
  19. 19. YOUR BUCKET LIST How to start up: Find a great team Form a business strategy Use any available help Launch the best product & get feedback Generate traction with great marketing Incorporate in a good ecosystem Raise money
  20. 20. YOU NEED VERY HARD WORK Commit Spend 10-15 hours per day Entrepreneurship is NOT a part time job
  21. 21. HOW DO I START Remember! 1. Team 2. Strategy 3. Help 4. Product 5. Traction 6. Company 7. Money
  22. 22. This document is proprietary & confidential information my business plan STARTING UP
  23. 23. BUSINESS PLAN
  24. 24. Size matters?
  25. 25. Sophisticated?
  26. 26. WHAT IS A PLAN? It is your strategy on paper: What Where How Why Who How much
  27. 27. WHAT SHOULD I PLAN? BP should answer: What is your product? What is your target market & customer? How you will reach them? Competition and how you are different? The team & responsibilities? How you will make money? How much you will make/spend/need?
  28. 28. WHAT SHOULD I PLAN? In plain words: Your product Your market Your go to market strategy Your competition & difference Your team Your revenue model Your financials
  29. 29. PRODUCT Should be a solution to a problem What are you offering? What are you solving? What are the features? How it works?
  30. 30. MARKET Your entry point What is the size? What is the annual growth? Who is your target user/customer? Is it more than one?
  31. 31. GO TO MARKET Your strategy to: Generate content Bring visitors Make them users/subscribers Convert them to customers Take care of them/retain them
  32. 32. COMPETITION Who else does it? How many? How big? Comparison
  33. 33. VALUE PROPOSITION How are you different: Is your product better? Is your go to market innovative? Is your revenue model great? Do you have a patents? Are you disrupting the market?
  34. 34. ΤΕΑΜ Who will make it happen: Who is who Who will do what
  35. 35. REVENUE MODEL How you make money? Pay as you go? Free to premium? Subscription? Micro transactions? Ads?
  36. 36. FINANCIALS Τhe assumptions for: Expenses Revenue The capital you need Return of investment
  37. 37. WHAT SHOULD I PLAN? Remember. 10-15 pages with: 1. product 2. market 3. go to market 4. competition 5. team 6. revenue 7. financials
  38. 38. MUST BE CLEAR Answers example: A web & mobile marketplace for taxis Taxi transportation & taxi drivers Cold sales and sms/email marketing UBER, and we are free for all Bob, is the CEO, Mary is the Programmer We make money from ads We ‘ll make $12M/year, we need $400K
  39. 39. THE HARD COPY Files to prepare: A business plan (8-10 pages is great) An executive summary (1 page only) A pitch (8-10 slides is great) A profit & loss plan (1-3 sheets is OK)
  40. 40. REMEMBΕR Serious investors: Do not read huge business plans Require that you know everything by heart
  41. 41. REMEMBΕR Successful entrepreneurs: Do not write, they execute Update their strategy (very) often
  42. 42. This document is proprietary & confidential information my team STARTING UP
  43. 43. TEAM
  44. 44. Where the f.. are they?
  45. 45. Do I need a team?
  46. 46. It’s mine! Mine!
  47. 47. ΤΕΑΜ Your co-founders Most important asset! Harder to find than money! They:  create stuff  adapt daily  back you up
  48. 48. Product Manager Support CEO Marketing
  49. 49. TEAM Core team usually is: 1 business person 1 marketing & promotion person 1 product person  i.e. developer, designer, production
  50. 50. MENTORS They fill the gaps Work for fee or equity Can be valuable
  51. 51. WHERE TO FIND THEM ‘Mix & match’ events Pitch & share your idea Inspire great people Online communities Make a profile & hunt great talents Post on groups & forums
  52. 52. This document is proprietary & confidential information sharing my company STARTING UP
  53. 53. SHARING
  54. 54. 50/50?
  55. 55. What If they leave?
  56. 56. Lion’s share
  57. 57. COMPANY STOCKS Sweat equity (or founders common stock) People who work and get stock Paid equity (or preferred stock) Investors who give money and get stock Pool equity (or option pool) Future employees who get options
  58. 58. FOUNDERS STOCK Work for equity. Remember: 100% of nothing or 1% of something? Try to keep majority Dilute when others come in Agree on shares 1st thing!
  59. 59. INVESTORS STOCK Pay for equity. Remember: Smart ones want founders to keep majority Expect great return or big exit Provide more than money
  60. 60. OPTION POOL Reward with equity. Remember: Motivation for great talents Reward on success Pay advisors
  61. 61. EQUITY CAP TABLE Best cap table share: (after many years) Founders: 40% Investors: 40% Pool: 20% 40 40 20
  62. 62. SHARING CRITERIA What to value per co-founder Experience Market Knowledge Skills Commitment Theory VS execution
  63. 63. SHARING EXAMPLE WHAT YOUR WEIGHT HIS/HER SCORE RESULT Experience 1-10 1-10 ? Market Knowledge 1-10 1-10 ? Skills 1-10 1-10 ? Commitment 1-10 1-10 ? Theory VS Execution 1-10 1-10 ?
  64. 64. SHARING EXAMPLE WHAT YOUR WEIGHT HIS/HER SCORE RESULT Experience 5 3 15 Market Knowledge 7 7 49 Skills 9 10 90 Commitment 10 3 30 Theory VS Execution 10 7 70 254
  65. 65. SHARING EXAMPLE TOLIS BUSINESS (i.e. the CEO) MARY MARKETING (i.e. the CMO) BOB PROGRAMMER (i.e. the HEAD OF PRODUCT Score /Share 520 254 370 1.144 45,5% 22,2% 32,3% 100% * % of your company
  66. 66. REWARDING MENTORS Work Idea Stage Startup Stage Growth Stage Consulting (Skype, Meetings, E-mails) 0,25% 0,15% 0,10% Introductions (Hiring, Investors, Suppliers, Customers) 0,50% 0,40% 0,30% Execution (Training, Research, Strategy) 1.00% 0,80% 0,60% * % of your company
  67. 67. REWARDING BROKERS Success Idea Stage Startup Stage Growth Stage Fund Raising (Suggest, Negotiate, Raise) 5% 3% 1% Mergers & Acquisitions (Suggest, Negotiate, Exit) 7% 4% 2% Sales (Suggest, Negotiate, Deal) 20% 10% 5% * % of the amount raised/gained
  68. 68. IF THEY LEAVE WHAT? Get stock as you go Vesting agreement Example, Mary gets:  22% total  Vested 5% per month  So she vests her stock step by step
  69. 69. This document is proprietary & confidential information available help STARTING UP
  70. 70. I WANT HELP
  71. 71. Some advise?
  72. 72. Some training?
  73. 73. HELP IS HERE! Mentors Accelerators Workplaces Events
  74. 74. BE PICKY Check & compare: Credentials Terms Costs Extras
  75. 75. MENTORS They advise you on things: Business & Product Finance Legal Marketing Networking Fund raising
  76. 76. ACCELERATORS They train you on things: Business & Product Finance Legal Marketing Networking Fund raising
  77. 77. WORKING PLACES They provide: Office Virtual secretary Meeting rooms
  78. 78. EVENTS Valuable for: Mix & match (networking) Workshops Pitching your business Learning
  79. 79. MORE HELP News sites & newsletters Associations Online communities
  80. 80. This document is proprietary & confidential information i have a great product STARTING UP
  81. 81. MY PRODUCT!
  82. 82. Must be perfect!
  83. 83. Add more.. Add more..
  84. 84. PRODUCT A good product/site/app: Solves a problem Must-have VS good-to-have Is VERY easy to use!
  85. 85. PRODUCT Α good product: Starts simple Innovates with time Adds new features continuously Pivots when needed Stays simple
  86. 86. PRODUCT vs BUSINESS But It’s about the business: Innovative product + Innovative marketing Disruptive business model
  87. 87. This document is proprietary & confidential information my vision is STARTING UP
  88. 88. YOUR VISION
  89. 89. Get Big? Stay small?
  90. 90. Grow? Sell?
  91. 91. When is time to fail?
  92. 92. REACH YOUR VISION Going there: Think big Start lean Under promise, over deliver Focus! Disrupt Scale fast Fail fast
  93. 93. LEARN TO FAIL! failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> failure> success
  94. 94. STARTUP SCORES 6 3 1 6 startups die 3 Break even 1 Get's big
  95. 95. SHOULD I GROW BIG? Organic growth= Make users, customers, revenue, profits Increase your business valuation Sell stocks later at a high price (IPO)
  96. 96. SHOULD I SELL? Merger & acquisition exit= Satisfy your buyer’s need  Product/distribution channel/patent/user base Accept highest offer
  97. 97. This document is proprietary & confidential information go to market STARTING UP
  98. 98. GO TO MARKET
  99. 99. We ll do Social Media!
  100. 100. We ‘ll attend events!
  101. 101. Wishful thinking
  102. 102. GO TO MARKET IS Your strategy to: Generate content Bring visitors Make them users/subscribers Convert them to customers Take care of them/retain them
  103. 103. GO TO MARKET ‘Chicken or egg’ problem: You need content to attract users You need users to make content
  104. 104. GO TO MARKET IS NOT Following the hype: Social media noise Local media interviews Presentations at geek events
  105. 105. GO TO MARKET IS NOT Wishful thinking: If just 1% of the market.. I would buy it.. People would love to use us..
  106. 106. GO TO MARKET IS NOT Wishful thinking: But we have a great product!!
  107. 107. 7,1
  108. 108. Traditional channels Events Expos TV ads & shows Radio ads & sponsorships Press ads & advertorials Outdoor Direct marketing Online channels Google ads Web ads Social ads Social media Email marketing Newsletters Mobile marketing Blog advertorials Affiliate marketing OPTIONS
  109. 109. GOALS vs CHANNELS Bring visitors Traditional & online Convert them to customers Online mostly Take care of them/retain them Traditional & online
  110. 110. GOALS vs CHANNELS Bring visitors Advertorial & Facebook ads Convert them to customers Newsletter with special offer Take care of them/retain them Direct email & sms reminders
  111. 111. Poor marketing Email spam Generic advertising People will add content People will come to us Social media marketing Events Sales Press releases Public relations Better marketing LinkedIn InMails Google keyword ads Crawl craigslist content Copy Twitter profiles Social mentions + ads One to one meetings Cold sales to CEOs Motivate our influencers Media exclusivities DO IT RIGHT!
  112. 112. MARKETING BUDGET How much? Marketing services> one-off payment  Design, Consulting, Development, Production Marketing budget> per month payments!  Traditional & online ads, social media
  113. 113. This document is proprietary & confidential information I want money STARTING UP
  114. 114. MONEY
  115. 115. How much I need?
  116. 116. Who is the money?
  117. 117. What’s the deal?
  118. 118. RAISE MONEY WHEN You can, not when you need Be sure first to achieve: 1. Proof of concept (use) 2. Traction (users) 3. Market validation (clients)
  119. 119. RAISE MONEY ΤΟ Support your cash flow Grow Buy others Scale
  120. 120. FUND RAISING STEPS Steps to take: 1. Build a team 2. Launch your product 3. Start marketing 4. Generate traction Ready to meet investors
  121. 121. FUND RAISING TOOLΚΙΤ Tools you need: 1. The 1 page Executive Summary 2. The 10-15 slides Pitch 3. The 5 years profit & loss plan Start your fund raising campaign
  122. 122. HOW MUCH I NEED? Calculate ALL expenses Salaries Professional services Marketing Travel & accommodation Up to the ‘making money’ point
  123. 123. RAISING EARLY STAGE $10.000 - $500.000 Friends, fools, family Angel investors Seed funds Startup contests!
  124. 124. RAISING LATER STAGE $500.000 - $BILLIONS Venture capital funds Private equity funds IPO
  125. 125. INVESTORS Ask for: Equity for their money (%) Expect: Profits every year (based on their %) Their % value: Angel investors: 3X-10X Venture capital funds: 10X+
  126. 126. INVESTORS GET EQUITY Equity now: Pre money valuation (company’s worth)  i.e. your company worth's 1.000.000 Post money valuation (value after money)  Your raise 100.000  Now your company worth's 1.100.000  Investor gets 9%
  127. 127. INVESTORS GET EQUITY Equity later: Loan converted to equity later  i.e. your company worth's now 1.000.000 or 0  Your raise 100.000 now Investor gets % based on future valuation  In 1 year your company worth's 10.000.000  Investor gets 1% 1 year later
  128. 128. Raising in EU -Poor valuation -Equity now -I.P. stays here -Bureaucracy -Corporate costs -Bad mentality -Taxation -Founders guarantee Raising in the USA +Great valuation +Equity later +I.P. in USA +No bureaucracy +Low cost +Risk taking mentality +No Taxation +No guarantee +Ecosystem -Relocation & VISA COMPARISON
  129. 129. Investors - Due diligence - Equity + Smart money + No capital return COMPARISON Bank loan - Interest - Capital return - ‘Dumb’ money + Νo equity + Easier to get
  130. 130. This document is proprietary & confidential information I need a company STARTING UP
  131. 131. COMPANY
  132. 132. Where to set up?
  133. 133. How much?
  134. 134. COMPANY You need a registration: To issue invoices To split equity To sell physical products
  135. 135. COMPANY You don’t need a registration: To work for your idea To sign any agreements To register brands & patents To raise, spend, make money
  136. 136. INCORPORATING Think global, act local: Head Quarters in a great ecosystem Patents & intellectual property in HQ Executive team in HQ Sales team hired as contractors Development team hire in local company
  137. 137. INCORPORATING MANAGEMENT: USA SALES: EVERYWHERE PRODUCTION: LOCAL
  138. 138. INCORPORATING HQ: USA SALES: EVERYWHERE MANAGEMENT & PRODUCTION: LOCAL
  139. 139. INCORPORATING HQs. Remember: Where investors feel safer? Where is your market? Where is best/cheaper ecosystem? Attorneys/accountants are not advisors
  140. 140. ATTORNEYS COSTS How much it cost to: Company registration + Bank ($1.500+) Visa & green cards ($4.000+) Patent filling ($3.000+) Brand registration ($1.500+)
  141. 141. US corporate governance + Set up: Online, 2 hours + TAX: 0% & VAT: 9% + Capital: NO + Investors TAX: NO + Other TAXES: NO + Accountant: NO + Residence: NO + Liability: NO + Valuation: 10 factors EU corporate governance - Set up: Offline, Months - TAX: 35% +, VAT 20%+ - Capital: YES - Investors TAX: YES - Other TAXES: YES plenty - Accountant: YES - Residence: YES - Liability: YES, all - Valuation: 2 factors COMPARISON
  142. 142. Factors in the US Revenue & profits Assets Funds raised Market size Competition size Innovation Technology Patents Registrations Critical mass Factors in EU Revenue & profits Assets VALUATION
  143. 143. BUSINESS VALUATION Valuation is everything! Raising funds (pre money/post money) Mergers & acquisitions Selling stock & IPO
  144. 144. This document is proprietary & confidential information summary STARTING UP
  145. 145. SUMMARY
  146. 146. DON’T FORGET How to start-up: Find a great team Form a business strategy Use any available help Launch the best product & get feedback Generate traction with great marketing Incorporate in a good ecosystem Raise money
  147. 147. WWW.AIVAL.COM
  148. 148. WWW.AIVAL.COM
  149. 149. This document is proprietary & confidential information Managing Partner, aival.com THANK YOU  TOLIS AIVALIS facebook.com/TolisAivalis linkedin.com/in/Aivalis @aivalis

×