SlideShare a Scribd company logo
1 of 40
Is Your Business Funding Ready
Toozio Insight - Expert Talk
Hyatt, Bangalore
19th February 2014
Anjana Vivek
anjana@venturebean.com
Agenda
At the start
Kinds of Investors
Investee Perspectives
Investor Perspectives
Value Creation and Valuation
Practical Points to factor in
In Summary
VentureBean Consulting Private Limited

2

2
The Starting Points
YOU
Your Business Today
&
Where you Want to go

3
VentureBean Consulting Private Limited
Why do you want funding

WHY ??

4
VentureBean Consulting Private Limited
These companies want equity funding

WHY?
• One is not eligible for debt funding and thinks that
equity is the only option for growth
• One wants it for R&D and capital investment and
has calculated that the existing money in the bank
will be exhausted in 3 months
• One has a severe cash crunch and working capital
management issues and hence believes that
taking money from a VC would solve this problem
• One wants to expand from 3 retail outlets in
Bangalore to multiple outlets across South India
• One wants to buy a US Company
• If you are seeking funding; please list 2-3 key
reasons for this
VentureBean Consulting Private Limited

5
Funding Options Available
• Debt: Collateral based, Cash flow from business
should comfortably cover repayment of interest
and principal
• There are multiple alternate equity investment
options: VC/ PE/ Incubation/Acceleration, which
are detailed in the next few slides
• This session is focused on equity funding along
with emerging funding options; with some
contrasts between debt and VC/PE and
emerging funding options being highlighted
VentureBean Consulting Private Limited

6
Agenda
At the start
Kinds of Investors
Investee Perspectives
Investor Perspectives
Value Creation and Valuation
Practical Points to factor in
In Summary
VentureBean Consulting Private Limited

7

7
Investors: Equity (Linked)
•
•
•
•
•
•
•
•
•
•

Venture Capital
Private Equity
Strategic Investors
Corporate Funds
Impact Investors
Social Ventures
Angel Funds
Seed Funds
3 Fs
HNIs

• Incubators
• Accelerators
• .. And ??
VentureBean Consulting Private Limited

8
Contributors
•
•
•
•
•
•

Corporates
Banks and FIs
FIIs
Family Business Groups
HNIs
Combination / others

• Crowd sourcing platforms ?

VentureBean Consulting Private Limited

9
Investor Investment Horizon
• This varies across investor category
• Debt : The key focus is performance over the
period of the loan
• VC/PE/Other Structured Funds including but not
limited to Impact Funds etc.: depends on the
Fund Life

• HNIs/Angel/Seed etc.: May or may not have a
defined horizon
VentureBean Consulting Private Limited

10
Agenda
At the start
Kinds of Investors
Investee Perspectives
Investor Perspectives
Value Creation and Valuation
Practical Points to factor in
In Summary
VentureBean Consulting Private Limited

11

11
If you are looking for funding
• What is your funding strategy?
• Debt, equity or mix?
• Are you in a position to repay debt with
interest? Do you have collateral?
• Will you be able to generate returns expected
by an equity investor? How?

VentureBean Consulting Private Limited

12
Back to the Basics & Your Drawing Board
In 5 years:
• Top Level: How do you picture your business …
– Quantitative: In terms of turnover, profits, numbers, data etc.
??
– Qualitative: As best in country, innovative, great employer
??

• In more detail: What do you believe could be
achieved, for eg. in terms of …
–
–
–
–
–
–

Financials: Revenue, Profits, Cash Flow,
Value
Number of Employees, Number of Offices etc.
Lines of business/products/service
Kinds of customers / categories
etc..

VentureBean Consulting Private Limited

13
Back to the Basics & Your Drawing Board
In 5 years:
• Top Level: How do you picture your business …
• In more detail: What do you believe could be
achieved, for eg. in terms of …
• To Trigger Thinking
* Please attempt to answer the above questions. It is OK
if you have no answers or are unclear about the way in
which you need to proceed, this is a starting point, not a
decision point
* Home work for you post the session
VentureBean Consulting Private Limited

14
Back to the Basics & Your Drawing Board
• What are you willing to let go to reach your goals
–
–
–
–

Equity share i.e. ownership dilution
Revenue share
Profit share
Decision making, i.e. permitting others to take
decisions as the leadership team grows to beyond
initial founders/family members
– What else

VentureBean Consulting Private Limited

15
What do you have to give up
• If you are willing to let go of ownership, i.e if you are
willing to allow investors to fund your business growth,
what percentage of ownership are you willing to let go?
• Does the possible valuation of your business match this
percentage that you are willing to let go?
• To Trigger Thinking:
– * Please attempt to think about what you are willing to let go;
your thoughts on the above this will determine the way you
Negotiate and impact Deal Terms
– Some of these may well become Deal Issues or Post Deal
Issues, so do think through with care
* Home work for you post the session

VentureBean Consulting Private Limited

16
From your perspective as a business
• Which category of investor(s) will be the
right/best/optimum fit for you?
• Which specific investor in that category will be
the right/best/optimum fit for you?
• Investigate, check the investors out and then
approach them in a planned manner

VentureBean Consulting Private Limited

17
Funding and More …
What would you like from these investors

• Funding at a Valuation that You think is appropriate
• Networks and connections .. To potential customers,
suppliers, advisors, employers, next level of
investors .. and more..
• Brand Value Addition – market perception of your
company goes up when a marquee investor funds
the growth
• And … ??
VentureBean Consulting Private Limited

18
Agenda
At the start
Kinds of Investors
Investee Perspectives
Investor Perspectives
Value Creation and Valuation
Practical Points to factor in
In Summary
VentureBean Consulting Private Limited

19

19
A Moment Please: Before Fund Raising
Think of the Investor as a Customer

• What does this Customer want from you?
• Why does this Customer choose you instead of
going to competition?

VentureBean Consulting Private Limited

20
A Moment Please: Before Fund Raising
• Why will an investor in equity – PE/VC/Angel be
interested in your company?
• How will you stand out from the clutter
– The number of companies that get funded are a small
percentage..
– In India, less than 1% of the companies that seek
PE/VC/Angel funding get this
– Some even say 1 in 500 companies that seek VC funding
get it

• How can you work out a deal that is meaningful to
both You and the Potential Investor
VentureBean Consulting Private Limited

21
What an Equity Investor Looks For
• An increase in the value of the investment over a period of
time, for example
– 3 times in 3 years
– 5 times in 5 years
– For an illustration of exits, valuation and returns across
categories of investors please check
http://www.slideshare.net/anjanavivek/valuation-and-funding-casestudy

• Just because a business is profitable, does not mean it is of
interest to a VC
• In fact many PE investors put Crores of Rupees in loss
making companies
• Can you think of any examples of well known, VC
funded, loss making companies in India?
VentureBean Consulting Private Limited

22
An Investor Perspective
• What will an investor look for in your company
– ?? Revenue
– ?? Profit
– ?? Value

• It depends on
– The stage of your business: idea/growth/turnaround..
– The industry, the team, the business environment
– The investor category and the mandate/needs of the
fund (as applicable)
– Your growth plans and action plans
– The investor perception and reading of you and
your ability to grow and scale and Execute
VentureBean Consulting Private Limited

23
Agenda
At the start
Kinds of Investors
Investee Perspectives
Investor Perspectives
Value Creation and Valuation
Practical Points to factor in
In Summary
VentureBean Consulting Private Limited

24

24
Value Indicators
• How will you demonstrate that your business has the
potential to grow and create value, so that an investor
can get the required financial returns?

• Some possible indicators
– Key team, Board of Directors, Advisory Board
– Customer quantity and quality (Marquee customers, repeat
business etc.)
– Industry, Lines of business, sales verticals
– Intellectual property
– Brand perception
– Competitive advantage

• To Trigger Thinking
* Please attempt to think of the possible value indicators in your
company
* Home work for you post the session
VentureBean Consulting Private Limited

25
Eg. Value Creation: Revenue/Customers
• Review revenue categories/streams month on month for
this financial year. Which streams of revenue give you
less than 1-2% of your revenue, less than 5% .. Do you
want to continue to these lines, if yes, why? For strategic
reason, to penetrate a market .. ??
• What are direct costs for each revenue stream, what are
the indirect costs, how are you allocating indirect costs?
• Compare the % of sales from different categories,
customer lines, and the associated costs
• Cash flow is also to be considered, as a profitable
revenue stream may not give immediate cash flow. Cash
flow and profits are to be factored in

VentureBean Consulting Private Limited

26
Value Creation
• Where are you getting more revenue; which streams of
income are more profitable
• All customers may not be giving revenue: Illustrative
Example: An online social media platform has one set of
non-paying customers, who need to be serviced well in
order that paying customers also visit the platform
• This exercise, done with due care, will help understand
which category of customers are creating more value for
you now, and where you may like to go in future
• Similarly look at other areas of your business and
business model. Where do you see value being created,
how?

VentureBean Consulting Private Limited

27
Valuation
• Based on
–
–
–
–

Tangibles and intangibles
Data and assumptions
Subjectivity and objectivity
Future growth perceptions

• Many methods of computation including but not
limited to
– multiples of revenue; profit, EBIDTA etc.
– multiples of key drivers, eg.user base, capacity
– cash flow based, discounted

• Factor statutory, accounting, and tax implications
VentureBean Consulting Private Limited

28
Valuation
Driven by
• Markets including flavor of season, competitive scenario, team
at helm etc. ,
• Deal issues: deal breaker and deal maker issues

• Due diligence findings, both the number of issues flagged off as
well as the seriousness and materiality of these issues
• Percentage of stake offered
• The ability and skills brought to the negotiation table as also the
bargaining power of the persons on the two sides of this table
VentureBean Consulting Private Limited

29
Valuation
• Therefore, there can be divergent views on
valuation, with the same business showing varying
values when
– Different methods of valuation are employed
– Variations of the methods are used
– Different inputs are used in the methods, i.e when
assumptions made differ
– Growth is perceived differently based on who is viewing this

• Sometimes it is assumed that this is a mathematical
and number driven exercise and hence is scientific;
yes there is a logic to valuation, it can be a rigorous
mathematical exercise; however the underlying
assumptions and the rationale for doing a deal
dominate over the mathematics. Hence Valuation is
Both a Science and an Art
VentureBean Consulting Private Limited

30
Valuation
• Deals can sometimes be structured to
accommodate valuation perceptions; by linking
to future performance etc. But this is not
preferred by all
• For more on valuation: detailed notes are at
http://www.slideshare.net/anjanavivek/valuationbasics (from the popular set of the TOP 4%
viewed on SlideShare in 2013)

VentureBean Consulting Private Limited

31
Agenda
At the start
Kinds of Investors
Investee Perspectives
Investor Perspectives
Value Creation and Valuation
Practical Points to factor in
In Summary
VentureBean Consulting Private Limited

32

32
Practical Perspectives
• Funding takes time, it may take anywhere
between 6-12 months (sometimes even more) to
get money into your company, from the time you
start the process
• Funding takes Energy and the Bandwidth of the
Key Team.. Be prepared that to invest time in
this in addition to running your business
operations
• After all this, there is no guarantee that you can
raise Private Equity or VC money
VentureBean Consulting Private Limited

33
Practical Perspectives
• Funding takes money away, you need to pay for
Due Diligence, Legal and related fees
• Some of these are sunk fees, i.e. if the deal
does not materialize and you do not get money
from an investor, you would have still incurred
these costs
• Factor in the legal and tax matters when fund
raising, in addition to valuation and pricing

VentureBean Consulting Private Limited

34
A Moment Please: Before Fund Raising
• Is this the right time to get investment into the
business or should you wait for some time… for
example, if you get better customer traction, you
can get improved valuation
• Have you looked at business models which can
help you better manage cash flow, for example
your cost structures may be modified to improve
cash flow and improve the working capital
situation, you may then a) be able to manage
with less money from outside, or b) even
manage for some more time without funding
VentureBean Consulting Private Limited

35
Plan B
• What are the alternate plans if you do not get
funding
• Relook at the business model, financial plan and
funding strategy
• Perhaps you can grow the business to the next
stage and create value for yourself in the process ..
.. and then approach an investor
• Perhaps you can approach another investor or
category of investor .. This has to be done with
thought and care
• You may like to relook at your funding plan and
strategy
VentureBean Consulting Private Limited

36
Agenda
At the start
Kinds of Investors
Investee Perspectives
Investor Perspectives
Value Creation and Valuation
Practical Points to factor in
In Summary
VentureBean Consulting Private Limited

37

37
In Summary
• Articulate your Vision and Growth Plan, What
do You want
• Think through your Funding Strategy
• Select a Potential Investor with Due Care
• Plan for Fund Raising Time Lines, factor in
regulatory aspects
• Have an optimistic and a back up plan
• It is Not All About Funding.. all companies that
get funded do not succeed.. all companies
that do not get funded do not fail; Do not get
disheartened if Fund Raising looks difficult
GOOD LUCK in your Business…
VentureBean Consulting Private Limited

38
In Summary
• Thank you for the patient hearing
• Delighted to invite you to view/follow the link below
for periodic insights, class notes & more, from
thought leaders, academicians and others at the
VentureBean Consulting Knowledge Hub:
http://www.linkedin.com/company/venturebeanconsulting-private-limited
www.slideshare.net/anjanavivek
• Contact for more information and inputs:
beanie@venturebean.com
VentureBean Consulting Private Limited

39
Thank You!

VentureBean Consulting Private Limited

40

More Related Content

What's hot

PE and VC Funding: Embracing the New Normal
PE and VC Funding: Embracing the New NormalPE and VC Funding: Embracing the New Normal
PE and VC Funding: Embracing the New NormalAnjana Vivek
 
One slide checklist of investors and enablers
One slide checklist of investors and enablersOne slide checklist of investors and enablers
One slide checklist of investors and enablersAnjana Vivek
 
Angel investor valuation
Angel investor valuationAngel investor valuation
Angel investor valuationAnjana Vivek
 
Microsoft Ventures Masterclass - Business models growth and value creation
Microsoft Ventures Masterclass - Business models growth and value creationMicrosoft Ventures Masterclass - Business models growth and value creation
Microsoft Ventures Masterclass - Business models growth and value creationAnjana Vivek
 
Preparing A B Plan For Equity Investment
Preparing A B Plan For Equity InvestmentPreparing A B Plan For Equity Investment
Preparing A B Plan For Equity InvestmentAnjana Vivek
 
Private Equity: Money and More
Private Equity: Money and MorePrivate Equity: Money and More
Private Equity: Money and MoreAnjana Vivek
 
Proprietorship, Private Ltd. LLP or Partnership..??
Proprietorship, Private Ltd.  LLP or Partnership..?? Proprietorship, Private Ltd.  LLP or Partnership..??
Proprietorship, Private Ltd. LLP or Partnership..?? Anjana Vivek
 
Finance for Start-ups
Finance for Start-upsFinance for Start-ups
Finance for Start-upsAnjana Vivek
 
Joint Ventures and partnerships
Joint Ventures and partnershipsJoint Ventures and partnerships
Joint Ventures and partnershipsAnjana Vivek
 
Building resilience post lockdown
Building resilience post lockdownBuilding resilience post lockdown
Building resilience post lockdownAnjana Vivek
 
I Want / Need Funding
I Want / Need FundingI Want / Need Funding
I Want / Need FundingAnjana Vivek
 
Writing a Business Plan
Writing a Business PlanWriting a Business Plan
Writing a Business PlanAnjana Vivek
 
Leading in Changing Times: YourSelf and Your Business
Leading in Changing Times: YourSelf and Your BusinessLeading in Changing Times: YourSelf and Your Business
Leading in Changing Times: YourSelf and Your BusinessAnjana Vivek
 
One Two Four Entrepreneurial Financial Strategies
One Two Four  Entrepreneurial Financial StrategiesOne Two Four  Entrepreneurial Financial Strategies
One Two Four Entrepreneurial Financial StrategiesAnjana Vivek
 
Valuation for startups
Valuation for startupsValuation for startups
Valuation for startupsAnjana Vivek
 
Valuation of early stage companies
Valuation of early stage companiesValuation of early stage companies
Valuation of early stage companiesDayOne
 

What's hot (20)

PE and VC Funding: Embracing the New Normal
PE and VC Funding: Embracing the New NormalPE and VC Funding: Embracing the New Normal
PE and VC Funding: Embracing the New Normal
 
One slide checklist of investors and enablers
One slide checklist of investors and enablersOne slide checklist of investors and enablers
One slide checklist of investors and enablers
 
Angel investor valuation
Angel investor valuationAngel investor valuation
Angel investor valuation
 
Microsoft Ventures Masterclass - Business models growth and value creation
Microsoft Ventures Masterclass - Business models growth and value creationMicrosoft Ventures Masterclass - Business models growth and value creation
Microsoft Ventures Masterclass - Business models growth and value creation
 
Preparing A B Plan For Equity Investment
Preparing A B Plan For Equity InvestmentPreparing A B Plan For Equity Investment
Preparing A B Plan For Equity Investment
 
Private Equity: Money and More
Private Equity: Money and MorePrivate Equity: Money and More
Private Equity: Money and More
 
Proprietorship, Private Ltd. LLP or Partnership..??
Proprietorship, Private Ltd.  LLP or Partnership..?? Proprietorship, Private Ltd.  LLP or Partnership..??
Proprietorship, Private Ltd. LLP or Partnership..??
 
Start up math
Start up mathStart up math
Start up math
 
Finance for Start-ups
Finance for Start-upsFinance for Start-ups
Finance for Start-ups
 
Joint Ventures and partnerships
Joint Ventures and partnershipsJoint Ventures and partnerships
Joint Ventures and partnerships
 
Building resilience post lockdown
Building resilience post lockdownBuilding resilience post lockdown
Building resilience post lockdown
 
I Want / Need Funding
I Want / Need FundingI Want / Need Funding
I Want / Need Funding
 
Writing a Business Plan
Writing a Business PlanWriting a Business Plan
Writing a Business Plan
 
Leading in Changing Times: YourSelf and Your Business
Leading in Changing Times: YourSelf and Your BusinessLeading in Changing Times: YourSelf and Your Business
Leading in Changing Times: YourSelf and Your Business
 
One Two Four Entrepreneurial Financial Strategies
One Two Four  Entrepreneurial Financial StrategiesOne Two Four  Entrepreneurial Financial Strategies
One Two Four Entrepreneurial Financial Strategies
 
Valuation Basics
Valuation BasicsValuation Basics
Valuation Basics
 
Valuation of start up companies
Valuation of start up companiesValuation of start up companies
Valuation of start up companies
 
Valuation for startups
Valuation for startupsValuation for startups
Valuation for startups
 
The Price
The PriceThe Price
The Price
 
Valuation of early stage companies
Valuation of early stage companiesValuation of early stage companies
Valuation of early stage companies
 

Viewers also liked

Public-Private Partnerships - Public Infrastructure funding in America
Public-Private Partnerships - Public Infrastructure funding in AmericaPublic-Private Partnerships - Public Infrastructure funding in America
Public-Private Partnerships - Public Infrastructure funding in AmericaAlex Sproveri
 
Project Funding
Project FundingProject Funding
Project FundingRohan Kar
 
Ship Building and Marine Industry - Post Show report
Ship Building and Marine Industry - Post Show reportShip Building and Marine Industry - Post Show report
Ship Building and Marine Industry - Post Show reportritika
 
Final Report Tebma Shipyard
Final Report Tebma ShipyardFinal Report Tebma Shipyard
Final Report Tebma ShipyardGuddu Yadav
 
2.0 the tools to attract private funds
2.0 the tools to attract private funds 2.0 the tools to attract private funds
2.0 the tools to attract private funds Ramon Bartomeus
 
Cochin Shipyard Limited- Organisational Study
Cochin Shipyard Limited- Organisational StudyCochin Shipyard Limited- Organisational Study
Cochin Shipyard Limited- Organisational StudyKishore Raveendran
 
Mega Maroci Lines
Mega Maroci LinesMega Maroci Lines
Mega Maroci LinesHCI-IT
 
Konsep tabaruk
Konsep tabarukKonsep tabaruk
Konsep tabarukaswajanu
 
China ship building repairing industry profile isic3511 sample pages
China ship building repairing industry profile isic3511   sample pagesChina ship building repairing industry profile isic3511   sample pages
China ship building repairing industry profile isic3511 sample pagesBeijing Zeefer Consulting Ltd.
 
Writing for Funding
Writing for FundingWriting for Funding
Writing for Fundingunmgrc
 
Ajaran Syiah
Ajaran SyiahAjaran Syiah
Ajaran Syiahaswajanu
 
Advocacy and Coalition Building: Fighting Transit Opposition by Julie Gustafson
Advocacy and Coalition Building: Fighting Transit Opposition by Julie GustafsonAdvocacy and Coalition Building: Fighting Transit Opposition by Julie Gustafson
Advocacy and Coalition Building: Fighting Transit Opposition by Julie GustafsonRail~Volution
 
IMPACT OF COMPETENCY IN THE MALAYSIAN , MARINE INDUSTRY PERSPECTIVE – FOCUS O...
IMPACT OF COMPETENCY IN THE MALAYSIAN , MARINE INDUSTRY PERSPECTIVE – FOCUS O...IMPACT OF COMPETENCY IN THE MALAYSIAN , MARINE INDUSTRY PERSPECTIVE – FOCUS O...
IMPACT OF COMPETENCY IN THE MALAYSIAN , MARINE INDUSTRY PERSPECTIVE – FOCUS O...omahams
 
RV 2015: How to Start: Project Funding Lessons and Strategies by Henry Kay
RV 2015: How to Start: Project Funding Lessons and Strategies by Henry KayRV 2015: How to Start: Project Funding Lessons and Strategies by Henry Kay
RV 2015: How to Start: Project Funding Lessons and Strategies by Henry KayRail~Volution
 
Asia Days 2013 - Vietnam, Dung Quat Shipyard
Asia Days 2013 - Vietnam, Dung Quat Shipyard Asia Days 2013 - Vietnam, Dung Quat Shipyard
Asia Days 2013 - Vietnam, Dung Quat Shipyard Innovation Norway
 
Shipyard Management - Design, Planning & Operations
Shipyard Management - Design, Planning & OperationsShipyard Management - Design, Planning & Operations
Shipyard Management - Design, Planning & OperationsJune Tan
 
Loksa Shipyard presentation
Loksa Shipyard presentationLoksa Shipyard presentation
Loksa Shipyard presentationLoksaShipyard
 

Viewers also liked (20)

Means of Private Funding
Means of Private Funding Means of Private Funding
Means of Private Funding
 
Public-Private Partnerships - Public Infrastructure funding in America
Public-Private Partnerships - Public Infrastructure funding in AmericaPublic-Private Partnerships - Public Infrastructure funding in America
Public-Private Partnerships - Public Infrastructure funding in America
 
Project Funding
Project FundingProject Funding
Project Funding
 
Ship Building and Marine Industry - Post Show report
Ship Building and Marine Industry - Post Show reportShip Building and Marine Industry - Post Show report
Ship Building and Marine Industry - Post Show report
 
COMPANY-PROFILE-PT-KDM
COMPANY-PROFILE-PT-KDMCOMPANY-PROFILE-PT-KDM
COMPANY-PROFILE-PT-KDM
 
Final Report Tebma Shipyard
Final Report Tebma ShipyardFinal Report Tebma Shipyard
Final Report Tebma Shipyard
 
2.0 the tools to attract private funds
2.0 the tools to attract private funds 2.0 the tools to attract private funds
2.0 the tools to attract private funds
 
Cochin Shipyard Limited- Organisational Study
Cochin Shipyard Limited- Organisational StudyCochin Shipyard Limited- Organisational Study
Cochin Shipyard Limited- Organisational Study
 
Mega Maroci Lines
Mega Maroci LinesMega Maroci Lines
Mega Maroci Lines
 
Syiah Imamiyah, Ideologi dan Ajarannya
Syiah Imamiyah, Ideologi dan AjarannyaSyiah Imamiyah, Ideologi dan Ajarannya
Syiah Imamiyah, Ideologi dan Ajarannya
 
Konsep tabaruk
Konsep tabarukKonsep tabaruk
Konsep tabaruk
 
China ship building repairing industry profile isic3511 sample pages
China ship building repairing industry profile isic3511   sample pagesChina ship building repairing industry profile isic3511   sample pages
China ship building repairing industry profile isic3511 sample pages
 
Writing for Funding
Writing for FundingWriting for Funding
Writing for Funding
 
Ajaran Syiah
Ajaran SyiahAjaran Syiah
Ajaran Syiah
 
Advocacy and Coalition Building: Fighting Transit Opposition by Julie Gustafson
Advocacy and Coalition Building: Fighting Transit Opposition by Julie GustafsonAdvocacy and Coalition Building: Fighting Transit Opposition by Julie Gustafson
Advocacy and Coalition Building: Fighting Transit Opposition by Julie Gustafson
 
IMPACT OF COMPETENCY IN THE MALAYSIAN , MARINE INDUSTRY PERSPECTIVE – FOCUS O...
IMPACT OF COMPETENCY IN THE MALAYSIAN , MARINE INDUSTRY PERSPECTIVE – FOCUS O...IMPACT OF COMPETENCY IN THE MALAYSIAN , MARINE INDUSTRY PERSPECTIVE – FOCUS O...
IMPACT OF COMPETENCY IN THE MALAYSIAN , MARINE INDUSTRY PERSPECTIVE – FOCUS O...
 
RV 2015: How to Start: Project Funding Lessons and Strategies by Henry Kay
RV 2015: How to Start: Project Funding Lessons and Strategies by Henry KayRV 2015: How to Start: Project Funding Lessons and Strategies by Henry Kay
RV 2015: How to Start: Project Funding Lessons and Strategies by Henry Kay
 
Asia Days 2013 - Vietnam, Dung Quat Shipyard
Asia Days 2013 - Vietnam, Dung Quat Shipyard Asia Days 2013 - Vietnam, Dung Quat Shipyard
Asia Days 2013 - Vietnam, Dung Quat Shipyard
 
Shipyard Management - Design, Planning & Operations
Shipyard Management - Design, Planning & OperationsShipyard Management - Design, Planning & Operations
Shipyard Management - Design, Planning & Operations
 
Loksa Shipyard presentation
Loksa Shipyard presentationLoksa Shipyard presentation
Loksa Shipyard presentation
 

Similar to Is your business funding ready

The Science and Art of Startup Valuations - Anjana Vivek
The Science and Art of Startup Valuations - Anjana VivekThe Science and Art of Startup Valuations - Anjana Vivek
The Science and Art of Startup Valuations - Anjana VivekTiE Bangalore
 
Lecture 6 business p lan
Lecture 6 business p lanLecture 6 business p lan
Lecture 6 business p lanraiarpit
 
Business Planning and Preparing a Business Plan
Business Planning and Preparing a Business PlanBusiness Planning and Preparing a Business Plan
Business Planning and Preparing a Business PlanTiE Bangalore
 
Presentation Deck Yfk 2011
Presentation Deck Yfk 2011Presentation Deck Yfk 2011
Presentation Deck Yfk 2011Andre Peschong
 
Part 3 running your own business
Part 3 running your own businessPart 3 running your own business
Part 3 running your own businessJoachim Ravoth
 
Business plan presented by mdshadab sayed
Business plan presented by mdshadab sayedBusiness plan presented by mdshadab sayed
Business plan presented by mdshadab sayedMdshadab Sayed
 
Funding as an early entrepreneur presentation
Funding as an early entrepreneur presentationFunding as an early entrepreneur presentation
Funding as an early entrepreneur presentationTIP Admin
 
FinancementStartupsEDHEC
FinancementStartupsEDHECFinancementStartupsEDHEC
FinancementStartupsEDHECWilliam Caly
 
startup business.pptx
startup business.pptxstartup business.pptx
startup business.pptxAsif Beg
 
20 rules of angel investing
20 rules of angel investing20 rules of angel investing
20 rules of angel investingRikvin Pte Ltd
 
Valuation for Startups
Valuation for StartupsValuation for Startups
Valuation for StartupsTiE Bangalore
 
Beginner's Guide: How to raise Seed and Series A Funding for Your Tech Startups
Beginner's Guide: How to raise Seed and Series A Funding for Your Tech StartupsBeginner's Guide: How to raise Seed and Series A Funding for Your Tech Startups
Beginner's Guide: How to raise Seed and Series A Funding for Your Tech StartupsRakesh Soni
 
How Not to Fail Your Startup Fundraising by Ardent Capital VP Araya Hutasuwan
How Not to Fail Your Startup Fundraising by Ardent Capital VP Araya HutasuwanHow Not to Fail Your Startup Fundraising by Ardent Capital VP Araya Hutasuwan
How Not to Fail Your Startup Fundraising by Ardent Capital VP Araya HutasuwanArdent Capital
 
Angel investor engagement for entrepreneurs link
Angel investor engagement for entrepreneurs linkAngel investor engagement for entrepreneurs link
Angel investor engagement for entrepreneurs linklinkcaribbean
 
Entrepreneurship in Changing Times
Entrepreneurship in Changing TimesEntrepreneurship in Changing Times
Entrepreneurship in Changing TimesAnubha Rastogi
 

Similar to Is your business funding ready (20)

The Science and Art of Startup Valuations - Anjana Vivek
The Science and Art of Startup Valuations - Anjana VivekThe Science and Art of Startup Valuations - Anjana Vivek
The Science and Art of Startup Valuations - Anjana Vivek
 
Lecture 6 business p lan
Lecture 6 business p lanLecture 6 business p lan
Lecture 6 business p lan
 
Growth and Value Creation
Growth and Value CreationGrowth and Value Creation
Growth and Value Creation
 
Business Planning and Preparing a Business Plan
Business Planning and Preparing a Business PlanBusiness Planning and Preparing a Business Plan
Business Planning and Preparing a Business Plan
 
Presentation Deck Yfk 2011
Presentation Deck Yfk 2011Presentation Deck Yfk 2011
Presentation Deck Yfk 2011
 
The Importance of a Business Plan
The Importance of a Business PlanThe Importance of a Business Plan
The Importance of a Business Plan
 
Part 3 running your own business
Part 3 running your own businessPart 3 running your own business
Part 3 running your own business
 
Business plan presented by mdshadab sayed
Business plan presented by mdshadab sayedBusiness plan presented by mdshadab sayed
Business plan presented by mdshadab sayed
 
Funding as an early entrepreneur presentation
Funding as an early entrepreneur presentationFunding as an early entrepreneur presentation
Funding as an early entrepreneur presentation
 
Writing Business Plan
Writing Business PlanWriting Business Plan
Writing Business Plan
 
FinancementStartupsEDHEC
FinancementStartupsEDHECFinancementStartupsEDHEC
FinancementStartupsEDHEC
 
How to really start your own business
How to really start your own businessHow to really start your own business
How to really start your own business
 
startup business.pptx
startup business.pptxstartup business.pptx
startup business.pptx
 
Get your business funded
Get your business fundedGet your business funded
Get your business funded
 
20 rules of angel investing
20 rules of angel investing20 rules of angel investing
20 rules of angel investing
 
Valuation for Startups
Valuation for StartupsValuation for Startups
Valuation for Startups
 
Beginner's Guide: How to raise Seed and Series A Funding for Your Tech Startups
Beginner's Guide: How to raise Seed and Series A Funding for Your Tech StartupsBeginner's Guide: How to raise Seed and Series A Funding for Your Tech Startups
Beginner's Guide: How to raise Seed and Series A Funding for Your Tech Startups
 
How Not to Fail Your Startup Fundraising by Ardent Capital VP Araya Hutasuwan
How Not to Fail Your Startup Fundraising by Ardent Capital VP Araya HutasuwanHow Not to Fail Your Startup Fundraising by Ardent Capital VP Araya Hutasuwan
How Not to Fail Your Startup Fundraising by Ardent Capital VP Araya Hutasuwan
 
Angel investor engagement for entrepreneurs link
Angel investor engagement for entrepreneurs linkAngel investor engagement for entrepreneurs link
Angel investor engagement for entrepreneurs link
 
Entrepreneurship in Changing Times
Entrepreneurship in Changing TimesEntrepreneurship in Changing Times
Entrepreneurship in Changing Times
 

Recently uploaded

『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书
『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书
『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书rnrncn29
 
NO1 WorldWide Genuine vashikaran specialist Vashikaran baba near Lahore Vashi...
NO1 WorldWide Genuine vashikaran specialist Vashikaran baba near Lahore Vashi...NO1 WorldWide Genuine vashikaran specialist Vashikaran baba near Lahore Vashi...
NO1 WorldWide Genuine vashikaran specialist Vashikaran baba near Lahore Vashi...Amil baba
 
毕业文凭制作#回国入职#diploma#degree美国宾夕法尼亚大学毕业证成绩单pdf电子版制作修改#毕业文凭制作#回国入职#diploma#degree
毕业文凭制作#回国入职#diploma#degree美国宾夕法尼亚大学毕业证成绩单pdf电子版制作修改#毕业文凭制作#回国入职#diploma#degree 毕业文凭制作#回国入职#diploma#degree美国宾夕法尼亚大学毕业证成绩单pdf电子版制作修改#毕业文凭制作#回国入职#diploma#degree
毕业文凭制作#回国入职#diploma#degree美国宾夕法尼亚大学毕业证成绩单pdf电子版制作修改#毕业文凭制作#回国入职#diploma#degree ttt fff
 
Financial analysis on Risk and Return.ppt
Financial analysis on Risk and Return.pptFinancial analysis on Risk and Return.ppt
Financial analysis on Risk and Return.ppttadegebreyesus
 
1:1原版定制美国加州大学河滨分校毕业证成绩单pdf电子版制作修改
1:1原版定制美国加州大学河滨分校毕业证成绩单pdf电子版制作修改1:1原版定制美国加州大学河滨分校毕业证成绩单pdf电子版制作修改
1:1原版定制美国加州大学河滨分校毕业证成绩单pdf电子版制作修改yuu sss
 
Market Morning Updates for 16th April 2024
Market Morning Updates for 16th April 2024Market Morning Updates for 16th April 2024
Market Morning Updates for 16th April 2024Devarsh Vakil
 
Global Economic Outlook, 2024 - Scholaride Consulting
Global Economic Outlook, 2024 - Scholaride ConsultingGlobal Economic Outlook, 2024 - Scholaride Consulting
Global Economic Outlook, 2024 - Scholaride Consultingswastiknandyofficial
 
Amil Baba In Pakistan amil baba in Lahore amil baba in Islamabad amil baba in...
Amil Baba In Pakistan amil baba in Lahore amil baba in Islamabad amil baba in...Amil Baba In Pakistan amil baba in Lahore amil baba in Islamabad amil baba in...
Amil Baba In Pakistan amil baba in Lahore amil baba in Islamabad amil baba in...amilabibi1
 
House of Commons ; CDC schemes overview document
House of Commons ; CDC schemes overview documentHouse of Commons ; CDC schemes overview document
House of Commons ; CDC schemes overview documentHenry Tapper
 
Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...
Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...
Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...Amil baba
 
NCDC and NAFED presentation by Paras .pptx
NCDC and NAFED presentation by Paras .pptxNCDC and NAFED presentation by Paras .pptx
NCDC and NAFED presentation by Paras .pptxnaikparas90
 
Role of Information and technology in banking and finance .pptx
Role of Information and technology in banking and finance .pptxRole of Information and technology in banking and finance .pptx
Role of Information and technology in banking and finance .pptxNarayaniTripathi2
 
《加拿大本地办假证-寻找办理Dalhousie毕业证和达尔豪斯大学毕业证书的中介代理》
《加拿大本地办假证-寻找办理Dalhousie毕业证和达尔豪斯大学毕业证书的中介代理》《加拿大本地办假证-寻找办理Dalhousie毕业证和达尔豪斯大学毕业证书的中介代理》
《加拿大本地办假证-寻找办理Dalhousie毕业证和达尔豪斯大学毕业证书的中介代理》rnrncn29
 
Bladex 1Q24 Earning Results Presentation
Bladex 1Q24 Earning Results PresentationBladex 1Q24 Earning Results Presentation
Bladex 1Q24 Earning Results PresentationBladex
 
The Inspirational Story of Julio Herrera Velutini - Global Finance Leader
The Inspirational Story of Julio Herrera Velutini - Global Finance LeaderThe Inspirational Story of Julio Herrera Velutini - Global Finance Leader
The Inspirational Story of Julio Herrera Velutini - Global Finance LeaderArianna Varetto
 
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...Amil baba
 
NO1 WorldWide Love marriage specialist baba ji Amil Baba Kala ilam powerful v...
NO1 WorldWide Love marriage specialist baba ji Amil Baba Kala ilam powerful v...NO1 WorldWide Love marriage specialist baba ji Amil Baba Kala ilam powerful v...
NO1 WorldWide Love marriage specialist baba ji Amil Baba Kala ilam powerful v...Amil baba
 
Call Girls Near Delhi Pride Hotel, New Delhi|9873777170
Call Girls Near Delhi Pride Hotel, New Delhi|9873777170Call Girls Near Delhi Pride Hotel, New Delhi|9873777170
Call Girls Near Delhi Pride Hotel, New Delhi|9873777170Sonam Pathan
 
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...Amil baba
 
Stock Market Brief Deck for "this does not happen often".pdf
Stock Market Brief Deck for "this does not happen often".pdfStock Market Brief Deck for "this does not happen often".pdf
Stock Market Brief Deck for "this does not happen often".pdfMichael Silva
 

Recently uploaded (20)

『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书
『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书
『澳洲文凭』买科廷大学毕业证书成绩单办理澳洲Curtin文凭学位证书
 
NO1 WorldWide Genuine vashikaran specialist Vashikaran baba near Lahore Vashi...
NO1 WorldWide Genuine vashikaran specialist Vashikaran baba near Lahore Vashi...NO1 WorldWide Genuine vashikaran specialist Vashikaran baba near Lahore Vashi...
NO1 WorldWide Genuine vashikaran specialist Vashikaran baba near Lahore Vashi...
 
毕业文凭制作#回国入职#diploma#degree美国宾夕法尼亚大学毕业证成绩单pdf电子版制作修改#毕业文凭制作#回国入职#diploma#degree
毕业文凭制作#回国入职#diploma#degree美国宾夕法尼亚大学毕业证成绩单pdf电子版制作修改#毕业文凭制作#回国入职#diploma#degree 毕业文凭制作#回国入职#diploma#degree美国宾夕法尼亚大学毕业证成绩单pdf电子版制作修改#毕业文凭制作#回国入职#diploma#degree
毕业文凭制作#回国入职#diploma#degree美国宾夕法尼亚大学毕业证成绩单pdf电子版制作修改#毕业文凭制作#回国入职#diploma#degree
 
Financial analysis on Risk and Return.ppt
Financial analysis on Risk and Return.pptFinancial analysis on Risk and Return.ppt
Financial analysis on Risk and Return.ppt
 
1:1原版定制美国加州大学河滨分校毕业证成绩单pdf电子版制作修改
1:1原版定制美国加州大学河滨分校毕业证成绩单pdf电子版制作修改1:1原版定制美国加州大学河滨分校毕业证成绩单pdf电子版制作修改
1:1原版定制美国加州大学河滨分校毕业证成绩单pdf电子版制作修改
 
Market Morning Updates for 16th April 2024
Market Morning Updates for 16th April 2024Market Morning Updates for 16th April 2024
Market Morning Updates for 16th April 2024
 
Global Economic Outlook, 2024 - Scholaride Consulting
Global Economic Outlook, 2024 - Scholaride ConsultingGlobal Economic Outlook, 2024 - Scholaride Consulting
Global Economic Outlook, 2024 - Scholaride Consulting
 
Amil Baba In Pakistan amil baba in Lahore amil baba in Islamabad amil baba in...
Amil Baba In Pakistan amil baba in Lahore amil baba in Islamabad amil baba in...Amil Baba In Pakistan amil baba in Lahore amil baba in Islamabad amil baba in...
Amil Baba In Pakistan amil baba in Lahore amil baba in Islamabad amil baba in...
 
House of Commons ; CDC schemes overview document
House of Commons ; CDC schemes overview documentHouse of Commons ; CDC schemes overview document
House of Commons ; CDC schemes overview document
 
Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...
Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...
Uae-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Ra...
 
NCDC and NAFED presentation by Paras .pptx
NCDC and NAFED presentation by Paras .pptxNCDC and NAFED presentation by Paras .pptx
NCDC and NAFED presentation by Paras .pptx
 
Role of Information and technology in banking and finance .pptx
Role of Information and technology in banking and finance .pptxRole of Information and technology in banking and finance .pptx
Role of Information and technology in banking and finance .pptx
 
《加拿大本地办假证-寻找办理Dalhousie毕业证和达尔豪斯大学毕业证书的中介代理》
《加拿大本地办假证-寻找办理Dalhousie毕业证和达尔豪斯大学毕业证书的中介代理》《加拿大本地办假证-寻找办理Dalhousie毕业证和达尔豪斯大学毕业证书的中介代理》
《加拿大本地办假证-寻找办理Dalhousie毕业证和达尔豪斯大学毕业证书的中介代理》
 
Bladex 1Q24 Earning Results Presentation
Bladex 1Q24 Earning Results PresentationBladex 1Q24 Earning Results Presentation
Bladex 1Q24 Earning Results Presentation
 
The Inspirational Story of Julio Herrera Velutini - Global Finance Leader
The Inspirational Story of Julio Herrera Velutini - Global Finance LeaderThe Inspirational Story of Julio Herrera Velutini - Global Finance Leader
The Inspirational Story of Julio Herrera Velutini - Global Finance Leader
 
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...
 
NO1 WorldWide Love marriage specialist baba ji Amil Baba Kala ilam powerful v...
NO1 WorldWide Love marriage specialist baba ji Amil Baba Kala ilam powerful v...NO1 WorldWide Love marriage specialist baba ji Amil Baba Kala ilam powerful v...
NO1 WorldWide Love marriage specialist baba ji Amil Baba Kala ilam powerful v...
 
Call Girls Near Delhi Pride Hotel, New Delhi|9873777170
Call Girls Near Delhi Pride Hotel, New Delhi|9873777170Call Girls Near Delhi Pride Hotel, New Delhi|9873777170
Call Girls Near Delhi Pride Hotel, New Delhi|9873777170
 
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
 
Stock Market Brief Deck for "this does not happen often".pdf
Stock Market Brief Deck for "this does not happen often".pdfStock Market Brief Deck for "this does not happen often".pdf
Stock Market Brief Deck for "this does not happen often".pdf
 

Is your business funding ready

  • 1. Is Your Business Funding Ready Toozio Insight - Expert Talk Hyatt, Bangalore 19th February 2014 Anjana Vivek anjana@venturebean.com
  • 2. Agenda At the start Kinds of Investors Investee Perspectives Investor Perspectives Value Creation and Valuation Practical Points to factor in In Summary VentureBean Consulting Private Limited 2 2
  • 3. The Starting Points YOU Your Business Today & Where you Want to go 3 VentureBean Consulting Private Limited
  • 4. Why do you want funding WHY ?? 4 VentureBean Consulting Private Limited
  • 5. These companies want equity funding WHY? • One is not eligible for debt funding and thinks that equity is the only option for growth • One wants it for R&D and capital investment and has calculated that the existing money in the bank will be exhausted in 3 months • One has a severe cash crunch and working capital management issues and hence believes that taking money from a VC would solve this problem • One wants to expand from 3 retail outlets in Bangalore to multiple outlets across South India • One wants to buy a US Company • If you are seeking funding; please list 2-3 key reasons for this VentureBean Consulting Private Limited 5
  • 6. Funding Options Available • Debt: Collateral based, Cash flow from business should comfortably cover repayment of interest and principal • There are multiple alternate equity investment options: VC/ PE/ Incubation/Acceleration, which are detailed in the next few slides • This session is focused on equity funding along with emerging funding options; with some contrasts between debt and VC/PE and emerging funding options being highlighted VentureBean Consulting Private Limited 6
  • 7. Agenda At the start Kinds of Investors Investee Perspectives Investor Perspectives Value Creation and Valuation Practical Points to factor in In Summary VentureBean Consulting Private Limited 7 7
  • 8. Investors: Equity (Linked) • • • • • • • • • • Venture Capital Private Equity Strategic Investors Corporate Funds Impact Investors Social Ventures Angel Funds Seed Funds 3 Fs HNIs • Incubators • Accelerators • .. And ?? VentureBean Consulting Private Limited 8
  • 9. Contributors • • • • • • Corporates Banks and FIs FIIs Family Business Groups HNIs Combination / others • Crowd sourcing platforms ? VentureBean Consulting Private Limited 9
  • 10. Investor Investment Horizon • This varies across investor category • Debt : The key focus is performance over the period of the loan • VC/PE/Other Structured Funds including but not limited to Impact Funds etc.: depends on the Fund Life • HNIs/Angel/Seed etc.: May or may not have a defined horizon VentureBean Consulting Private Limited 10
  • 11. Agenda At the start Kinds of Investors Investee Perspectives Investor Perspectives Value Creation and Valuation Practical Points to factor in In Summary VentureBean Consulting Private Limited 11 11
  • 12. If you are looking for funding • What is your funding strategy? • Debt, equity or mix? • Are you in a position to repay debt with interest? Do you have collateral? • Will you be able to generate returns expected by an equity investor? How? VentureBean Consulting Private Limited 12
  • 13. Back to the Basics & Your Drawing Board In 5 years: • Top Level: How do you picture your business … – Quantitative: In terms of turnover, profits, numbers, data etc. ?? – Qualitative: As best in country, innovative, great employer ?? • In more detail: What do you believe could be achieved, for eg. in terms of … – – – – – – Financials: Revenue, Profits, Cash Flow, Value Number of Employees, Number of Offices etc. Lines of business/products/service Kinds of customers / categories etc.. VentureBean Consulting Private Limited 13
  • 14. Back to the Basics & Your Drawing Board In 5 years: • Top Level: How do you picture your business … • In more detail: What do you believe could be achieved, for eg. in terms of … • To Trigger Thinking * Please attempt to answer the above questions. It is OK if you have no answers or are unclear about the way in which you need to proceed, this is a starting point, not a decision point * Home work for you post the session VentureBean Consulting Private Limited 14
  • 15. Back to the Basics & Your Drawing Board • What are you willing to let go to reach your goals – – – – Equity share i.e. ownership dilution Revenue share Profit share Decision making, i.e. permitting others to take decisions as the leadership team grows to beyond initial founders/family members – What else VentureBean Consulting Private Limited 15
  • 16. What do you have to give up • If you are willing to let go of ownership, i.e if you are willing to allow investors to fund your business growth, what percentage of ownership are you willing to let go? • Does the possible valuation of your business match this percentage that you are willing to let go? • To Trigger Thinking: – * Please attempt to think about what you are willing to let go; your thoughts on the above this will determine the way you Negotiate and impact Deal Terms – Some of these may well become Deal Issues or Post Deal Issues, so do think through with care * Home work for you post the session VentureBean Consulting Private Limited 16
  • 17. From your perspective as a business • Which category of investor(s) will be the right/best/optimum fit for you? • Which specific investor in that category will be the right/best/optimum fit for you? • Investigate, check the investors out and then approach them in a planned manner VentureBean Consulting Private Limited 17
  • 18. Funding and More … What would you like from these investors • Funding at a Valuation that You think is appropriate • Networks and connections .. To potential customers, suppliers, advisors, employers, next level of investors .. and more.. • Brand Value Addition – market perception of your company goes up when a marquee investor funds the growth • And … ?? VentureBean Consulting Private Limited 18
  • 19. Agenda At the start Kinds of Investors Investee Perspectives Investor Perspectives Value Creation and Valuation Practical Points to factor in In Summary VentureBean Consulting Private Limited 19 19
  • 20. A Moment Please: Before Fund Raising Think of the Investor as a Customer • What does this Customer want from you? • Why does this Customer choose you instead of going to competition? VentureBean Consulting Private Limited 20
  • 21. A Moment Please: Before Fund Raising • Why will an investor in equity – PE/VC/Angel be interested in your company? • How will you stand out from the clutter – The number of companies that get funded are a small percentage.. – In India, less than 1% of the companies that seek PE/VC/Angel funding get this – Some even say 1 in 500 companies that seek VC funding get it • How can you work out a deal that is meaningful to both You and the Potential Investor VentureBean Consulting Private Limited 21
  • 22. What an Equity Investor Looks For • An increase in the value of the investment over a period of time, for example – 3 times in 3 years – 5 times in 5 years – For an illustration of exits, valuation and returns across categories of investors please check http://www.slideshare.net/anjanavivek/valuation-and-funding-casestudy • Just because a business is profitable, does not mean it is of interest to a VC • In fact many PE investors put Crores of Rupees in loss making companies • Can you think of any examples of well known, VC funded, loss making companies in India? VentureBean Consulting Private Limited 22
  • 23. An Investor Perspective • What will an investor look for in your company – ?? Revenue – ?? Profit – ?? Value • It depends on – The stage of your business: idea/growth/turnaround.. – The industry, the team, the business environment – The investor category and the mandate/needs of the fund (as applicable) – Your growth plans and action plans – The investor perception and reading of you and your ability to grow and scale and Execute VentureBean Consulting Private Limited 23
  • 24. Agenda At the start Kinds of Investors Investee Perspectives Investor Perspectives Value Creation and Valuation Practical Points to factor in In Summary VentureBean Consulting Private Limited 24 24
  • 25. Value Indicators • How will you demonstrate that your business has the potential to grow and create value, so that an investor can get the required financial returns? • Some possible indicators – Key team, Board of Directors, Advisory Board – Customer quantity and quality (Marquee customers, repeat business etc.) – Industry, Lines of business, sales verticals – Intellectual property – Brand perception – Competitive advantage • To Trigger Thinking * Please attempt to think of the possible value indicators in your company * Home work for you post the session VentureBean Consulting Private Limited 25
  • 26. Eg. Value Creation: Revenue/Customers • Review revenue categories/streams month on month for this financial year. Which streams of revenue give you less than 1-2% of your revenue, less than 5% .. Do you want to continue to these lines, if yes, why? For strategic reason, to penetrate a market .. ?? • What are direct costs for each revenue stream, what are the indirect costs, how are you allocating indirect costs? • Compare the % of sales from different categories, customer lines, and the associated costs • Cash flow is also to be considered, as a profitable revenue stream may not give immediate cash flow. Cash flow and profits are to be factored in VentureBean Consulting Private Limited 26
  • 27. Value Creation • Where are you getting more revenue; which streams of income are more profitable • All customers may not be giving revenue: Illustrative Example: An online social media platform has one set of non-paying customers, who need to be serviced well in order that paying customers also visit the platform • This exercise, done with due care, will help understand which category of customers are creating more value for you now, and where you may like to go in future • Similarly look at other areas of your business and business model. Where do you see value being created, how? VentureBean Consulting Private Limited 27
  • 28. Valuation • Based on – – – – Tangibles and intangibles Data and assumptions Subjectivity and objectivity Future growth perceptions • Many methods of computation including but not limited to – multiples of revenue; profit, EBIDTA etc. – multiples of key drivers, eg.user base, capacity – cash flow based, discounted • Factor statutory, accounting, and tax implications VentureBean Consulting Private Limited 28
  • 29. Valuation Driven by • Markets including flavor of season, competitive scenario, team at helm etc. , • Deal issues: deal breaker and deal maker issues • Due diligence findings, both the number of issues flagged off as well as the seriousness and materiality of these issues • Percentage of stake offered • The ability and skills brought to the negotiation table as also the bargaining power of the persons on the two sides of this table VentureBean Consulting Private Limited 29
  • 30. Valuation • Therefore, there can be divergent views on valuation, with the same business showing varying values when – Different methods of valuation are employed – Variations of the methods are used – Different inputs are used in the methods, i.e when assumptions made differ – Growth is perceived differently based on who is viewing this • Sometimes it is assumed that this is a mathematical and number driven exercise and hence is scientific; yes there is a logic to valuation, it can be a rigorous mathematical exercise; however the underlying assumptions and the rationale for doing a deal dominate over the mathematics. Hence Valuation is Both a Science and an Art VentureBean Consulting Private Limited 30
  • 31. Valuation • Deals can sometimes be structured to accommodate valuation perceptions; by linking to future performance etc. But this is not preferred by all • For more on valuation: detailed notes are at http://www.slideshare.net/anjanavivek/valuationbasics (from the popular set of the TOP 4% viewed on SlideShare in 2013) VentureBean Consulting Private Limited 31
  • 32. Agenda At the start Kinds of Investors Investee Perspectives Investor Perspectives Value Creation and Valuation Practical Points to factor in In Summary VentureBean Consulting Private Limited 32 32
  • 33. Practical Perspectives • Funding takes time, it may take anywhere between 6-12 months (sometimes even more) to get money into your company, from the time you start the process • Funding takes Energy and the Bandwidth of the Key Team.. Be prepared that to invest time in this in addition to running your business operations • After all this, there is no guarantee that you can raise Private Equity or VC money VentureBean Consulting Private Limited 33
  • 34. Practical Perspectives • Funding takes money away, you need to pay for Due Diligence, Legal and related fees • Some of these are sunk fees, i.e. if the deal does not materialize and you do not get money from an investor, you would have still incurred these costs • Factor in the legal and tax matters when fund raising, in addition to valuation and pricing VentureBean Consulting Private Limited 34
  • 35. A Moment Please: Before Fund Raising • Is this the right time to get investment into the business or should you wait for some time… for example, if you get better customer traction, you can get improved valuation • Have you looked at business models which can help you better manage cash flow, for example your cost structures may be modified to improve cash flow and improve the working capital situation, you may then a) be able to manage with less money from outside, or b) even manage for some more time without funding VentureBean Consulting Private Limited 35
  • 36. Plan B • What are the alternate plans if you do not get funding • Relook at the business model, financial plan and funding strategy • Perhaps you can grow the business to the next stage and create value for yourself in the process .. .. and then approach an investor • Perhaps you can approach another investor or category of investor .. This has to be done with thought and care • You may like to relook at your funding plan and strategy VentureBean Consulting Private Limited 36
  • 37. Agenda At the start Kinds of Investors Investee Perspectives Investor Perspectives Value Creation and Valuation Practical Points to factor in In Summary VentureBean Consulting Private Limited 37 37
  • 38. In Summary • Articulate your Vision and Growth Plan, What do You want • Think through your Funding Strategy • Select a Potential Investor with Due Care • Plan for Fund Raising Time Lines, factor in regulatory aspects • Have an optimistic and a back up plan • It is Not All About Funding.. all companies that get funded do not succeed.. all companies that do not get funded do not fail; Do not get disheartened if Fund Raising looks difficult GOOD LUCK in your Business… VentureBean Consulting Private Limited 38
  • 39. In Summary • Thank you for the patient hearing • Delighted to invite you to view/follow the link below for periodic insights, class notes & more, from thought leaders, academicians and others at the VentureBean Consulting Knowledge Hub: http://www.linkedin.com/company/venturebeanconsulting-private-limited www.slideshare.net/anjanavivek • Contact for more information and inputs: beanie@venturebean.com VentureBean Consulting Private Limited 39
  • 40. Thank You! VentureBean Consulting Private Limited 40