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Funding for innovative startups - Part 2 of 5

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Practical funding masterclass: a series of 5 presentations by Benno Groosman.
Session 1: Introduction to funding language + business planning.
Session 2: Determining funding need + milestone-based funding.
Session 3: Building your financial investment plan.
Session 4: Investor readiness.
Session 5: Advanced funding and wrap-up.

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Funding for innovative startups - Part 2 of 5

  1. 1. SESSION TWO: MILESTONE FUNDING & FUNDING NEED Benno Groosman MScBA – www.groosman.info –Athens, February 24 –
  2. 2. MASTERCLASS FUNDING FOR INNOVATIVE STARTUPS Benno Groosman MScBA – www.groosman.info –Athens, February 16 – OrangeGrove
  3. 3. MASTERCLASS SCHEDULE  Session 1: Introduction to funding language + business planning;  Session 2: Determining funding need + milestone-based funding;  Session 3: Building your financial investment plan;  Session 4: Investor readiness;  Session 5: Advanced funding and wrap-up. www.groosman.infoFUNDING MASTERCLASS
  4. 4. INTHIS PRESENTATION Do you need investor funding? Value-adding activities Milestone-based funding Your funding need and match with stages What’s next? www.groosman.infoFUNDING MASTERCLASS
  5. 5. DOYOU NEED INVESTOR FUNDING? First, get money from:  Selling your test product;  Make customers pay in advance (or sell MVP);  Use government subsidies and grants;  Consultancy (but don’t loose your focus!);  (Ask to) pay your suppliers later. ...TO BE ABLETO MAKE A BETTER DEAL. www.groosman.infoFUNDING MASTERCLASS
  6. 6. VALUE-ADDING ACTIVITIES Investors don’t like to pay for marketing, big office space and high salaries.They want to build the business by investing in prototypes, production, sales, patents, strategic positions etc. Use all funding to increase the valuation of your venture. www.groosman.infoFUNDING MASTERCLASS
  7. 7. VALUE-ADDING ACTIVITIES/RESULTS  Work on prototype (R&D)  Direct customer acquisition  Successful patent applications  Strategic partnerships  Improve product/market fit  Clear go-to-market strategy  Improve your team  … and more www.groosman.infoFUNDING MASTERCLASS
  8. 8. VALUE-ADDING ACTIVITIES/RESULTS Not: beautiful logo, business cards and website Not: a great CRM system without customers Not: adding more and more features to product Not: visiting events or exhibitions without a clear goal and result Not: Facebook likes or blog readers you didn’t monetize www.groosman.infoFUNDING MASTERCLASS
  9. 9. VALUE-ADDING ACTIVITIES/RESULTS What shouldYOU do to add value to your startup? www.groosman.infoFUNDING MASTERCLASS
  10. 10. FUNDING NEED AND STARTUP STAGE www.groosman.infoFUNDING MASTERCLASS
  11. 11. FUNDING FROM EARLYTO LATER STAGE  Friends, family and fools  Governments, universities, larger companies  Crowdfunding and crowd-investing  Business angels (informal investors)  Launching customers  Venture capital funds  Private equity / IPO / exit  … and more www.groosman.infoFUNDING MASTERCLASS
  12. 12. FUNDING NEED AND STARTUP STAGE Do you know what source of money fits your startup stage? www.groosman.infoFUNDING MASTERCLASS
  13. 13. MY DEFINITION: MILESTONE A milestone is the concrete achievement of a significant step in your venture planning, which adds financial value to your venture. www.groosman.infoFUNDING MASTERCLASS
  14. 14. MILESTONE-BASED FUNDING Define the milestones in your startup plan Determine the amount of money and time you need to reach each milestone Match milestones with available funding sources Can you combine the milestones for funding? www.groosman.infoFUNDING MASTERCLASS
  15. 15. MILESTONE-BASED FUNDING QUICK SHEET www.groosman.infoFUNDING MASTERCLASS
  16. 16. MILESTONE-BASED FUNDING QUICK SHEET Download at: www.groosman.info/#!funding/cbvu www.groosman.infoFUNDING MASTERCLASS
  17. 17. www.groosman.infoFUNDING MASTERCLASS
  18. 18. MILESTONE-BASED FUNDING QUICK SHEET Take 10 minutes to fill in the sheet and 15 minutes to discuss with your neighbor. www.groosman.infoFUNDING MASTERCLASS
  19. 19. MILESTONE-BASED FUNDING It’s easier to get milestones funded than activities or the total costs for years in the future Milestones make you and your financers focus on the big picture, instead of daily operations It’s possible to secure the funding of different milestones by combining the commitment of different (types of) funding sources in advance: you could capture these in one investment contract (with options) www.groosman.infoFUNDING MASTERCLASS
  20. 20. FUNDING NEED Ask the money that you really need, not too little, and about 10-20% extra for unforeseen expenses, to achieve the milestone(s) you are aiming for. www.groosman.infoFUNDING MASTERCLASS
  21. 21. SNEAK PREVIEW NEXT SESSION In order to raise money you have to show financial projections for the future For these projections you have to make estimates of costs and revenues In new ventures these estimates are assumptions The number is not the most important, the assumptions you made to get to this number is! www.groosman.infoFUNDING MASTERCLASS
  22. 22. FOLLOW ME Benno Groosman MScBA Experienced startup entrepreneur www.groosman.info www.groosman.infoFUNDING MASTERCLASS

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