Startup funding options for Student Entrepreneurs


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Presented at Imperial College University on the 17th November 2012

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Startup funding options for Student Entrepreneurs

  1. 1. Early Stage Funding . Presented by John Spindler CEO ofCapital Enterprise @ Imperial College 17th November 2012 @capenterprise 1
  2. 2. Steve Blank- The Start-up Owners ManualSee Steve Blank, Four Steps to the Epiphany
  3. 3. Start- Up Funding Roadmap. Idea Bootstrap- FFF Problem/ Space Exploration Design/ Innovation Awards Prototype Start-up LoansSeedrs/ Crowdcube Beta Test Kickstarter Adapt/ PivotX2 SEIS Collective Funds Super Angels/ Launch Angel Groups Early Stage VC’s @capenterprise 3
  4. 4. “There is an opportunity gap when the scope for growing income at a very fast rate islimited for those who have too little to invest, but expands dramatically for those who can invest a bit more.”- i.e. to win requires scale Banjaree &Duflo- Poor Economics @capenterprise 4
  5. 5. Start-up Growth Pathway 50 40 30Net Income 20 10 0 0 2 4 6 8 10 12 14 16 -10 -20 Investment
  6. 6. @capenterprise 6
  7. 7. 14291829 Examples of the top 10 Business Models in 2011- 2012 @capenterprise 7
  8. 8. Runway Milestones are…? • How much/ little money is needed to achieve the key milestones? • Going to need a Budget, Cashflow forecast and “burn rate” @capenterprise 8
  9. 9. Proving the Business Model Key Milestones• Human Resources - Hiring key people that will make a huge impact on your organization (not just employees for workload purposes, but like a shit-hot marketing person, for example).• Product – Minimum Viable Product- Beta Test- First Pivot-Full Launch- On-going iterations• Market – Market validation. As in, first customers, or first paying customers, etc• Funding – Maybe some money being committed to a round that the investor in question can lead or participate in.Other examples of milestones include*:• Proof that you can work together as a team, usually historical evidence• Proof that you can build something, i.e. working prototype• Proof that it’s useful to someone – first users and clients• Proof that you can talk to investors – every financing round, even small ones• Proof that you can talk to audiences – 100k users or 1M users or 10M users…• Proof that the initial team is able to attract talent –• Proof that ecosystem agrees with your ideas – bringing respected industry advisors partners on board• Proof that there is market – £1M annually/ Proof that the market is big! – £25M annually and beyond• Proof that you can manage your finances – cash-flow positive operation• Proof that you can scale – £10M annually within 3-5 years. @capenterprise 9
  10. 10. Funding OptionsInformation:• Capital Enterprise What’s On in London-• Start- up Britain -• British Library-• Bootlaw-• HMRC Small Company Enterprise Centre- Source of advice and help• HMRC R& D Tax Credits• HMRC Guide & Support-• British Business Angel Association:• Guide to Early Stage Investment:• Start-ups on Air at Google Campus-• Hubventurelabs - @capenterprise 10
  11. 11. Need less than £10K to start? Grant- No Funds New Enterprise Unemployed? Allowance Scheme Need Less than £10K to Launch a Self Fund business Community Development Write a simple Finance Institution Borrow Business Plan & 12 month cashflow Bank- Sources of Grants- Competition funding £1000 issued to 10+ businesses per month- Princes Trust £1000- £10,000 Enterprise Loans for Under 25’s- or New Enterprise Allowance Scheme – Check who delivers the scheme in London by e-mailing Capital Enterprise.- Community Development Finance Associations- - Also check out North London Community Finance- ELSBC Access to Finance – Business Plan support for those looking to raise up to £10K• Soft loans for Creative Businesses- @capenterprise 11
  12. 12. Funding Product DevelopmentGrants & Awards General• J4B- Portal for grant finding• Technology Strategy Board ( R&D Funding) - -• Knowledge Transfer Networks-• London European Enterprise Network-• E Funding for SME R&D -• EU Funding for R&D collaborations:• Knowledge Transfer Partnerships funding support- my-businessTranslation/ Follow on research funds.•••••• @capenterprise 12
  13. 13. Investors want ….? 1. Skilled and credible management teamInvestors want to find.. 2. BIG Market Opportunity- a big problem for a potential large set of customers that you can solve? 3. The Idea/ Prototype to be proven and market validated. 4. No Technical Risk 5. Evidence that the Business Model is both repeatable and scalable. 6. Business Model ready to execute 7. Road Map & Forecasts based on proven assumptions 8. Adequate financial returns ( 10X within 3 years?) 9. People they can trust/ work with 10. A clear exit route- How will they claim there reward?? @capenterprise 13
  14. 14. SEIS is…… “a game changer”?Seed Enterprise Investment Scheme-SEIS is a tax break launched in April 2012 for UKtax payers to encourage them to buy shares in start-up companies registered in theUKThe Facts:• SEIS investors can input £100,000 in a single tax year rising to a maximum £150,000 over two or more tax years in to a single company• Investors cannot control the company receiving their capital• Investors pick up 50% tax relief in the tax year the investment is made, regardless of their marginal rate.• In the 2012-13 tax year, tax payers can roll any chargeable gain in the tax year in to a SEIS with a full capital gains tax exemption (another 28%)• The business must be a start-up company -registered in the UK within 2 years of claim.• The company must not employ more than 25 workers.• The company must have assets of less than £200,000.• The company has to trade in an approved sector – generally not in finance or investment, for example, a property company raise capital as a SEIS. @capenterprise 14
  15. 15. My slide deck is… slides. Ten is the optimal number of slides in a PowerPointpresentation because a normal human being cannot comprehendmore than ten concepts in a meeting—and business angels are verynormal. If you must use more than ten slides to explain yourbusiness, you probably don’t have a business. The ten topics that aninvestors cares about are: 1. Summary and call to action/ what do you want? 2. Problem 3. Your solution 4. Business model 5. Underlying magic/technology 6. Marketing and sales 7. Competition 8. Team 9. Projections and milestones 10. Status and timeline @capenterprise 15
  16. 16. Funding the RunwayAccelerators : Training & Mentoring programmes that provide fast-track to seed funding forScalable new businesses• Lean Start-up : -• Start-Up Weekend:• Launch 48:• Tech Hub : – Google Campus-• FIG-• Y-combinator-• Tech Stars-• Seed Camp: ( Applications open)• Hackfwd:• Emerge Venture Labs-• Ignite 100-• BBC Worldwide Labs-• Springboard- -• Student Start-ups-• Accelerator Academy-• Fintech Innovation Labs-• Wayra-• Euclid Opportunities- ( Fin Tech Only)• Nreduce- Virtual Y-Combinator-• Innovation Warehouse-• Healthbox-• Collider12- @capenterprise 16
  17. 17. CrowdfundersCrowd funding Platforms-Reward based Crowdfunding platforms- will help you to raise funding to build a proto-type and market test agreat idea or product.- Great for pre-selling cool tech hardware.• (UK from the 31st October)• (USA)•••••• @capenterprise 17
  18. 18. Seed Funders (SEIS)1. http://www.boundarycapital.com2. http://www.dfjesprit.com4. http://www.ascensionmedia.com6. http://www.findinvestgrow.com8. http://www.oxfordtechnology.com9. http://jensonseedeis.comCrowd SEIS funders.- @capenterprise 18
  19. 19. Business Angels Angel Investment - £100-500K Seed Investment• NESTA -• British Business Angel Association-• Capital 4 Enterprise-• Angel Co-Fund- Seed/ Early stage Investment Platforms:- Capital Enterprise top 10 Angel Network in London1. London Business Angels: Oxford Early Investments- Envestors- Finance South East- www.thefsegroup.com5. Angels Den- www.angelsden.com6. Venture Director- www.boundarycapital.com7. Start-up Funding Club- E100- London Business School - #1 seed- Ascension Ventures- an alternative list check out- @capenterprise 19
  20. 20. Early Stage VC’s & Super AngelsAccel Partners: Stage agnostic, see their portfolio here. • ACT: Early to mid-stage, see their portfolio here. • Bloom Equity: Early to mid-stage angel syndicate, seeAnthemis Investment- Stage Agnostic, see portfolio here their portfolio here. • DFJ Esprit: Early to mid-stage, see their portfolio here.Balderton- Stage Agnostic- See there portfolio here • Charlotte St: Early to Mid Stage, see there portfolio hereEden Ventures- Early- mid stage – see there portfolio here • Dawn Capital: Early to mid-stage, see their portfolio here.Index Ventures: Stage agnostic, see their portfolio here. • Notion Capital – • Doughty Hanson- Stage Agnostic, see portfolio herePassion Capital: Early Stage, see their portfolio here. • Seraphim Capital – Early-mid stage see there portfolio here.Delta Partners: Early to mid-stage, see their portfolio • Kernel Capital: Early stage, see their portfolio • Octopus Ventures: Early to mid-stage, see their portfolio here.Atomico: Stage agnostic, see their portfolio here. • Hoxton Ventures ; Early stage with disruptive tech.Profounders: Early and mid-stage, see their portfolio • EC1 Capital: Early stage, see their portfolio herehere. • Connect Ventures- Early stage and very New.AIB Seed Capital Fund: Managed by two funds which • Pen Tech Ventures- Early Stage to mid- See portfolio Hereinvest under-€250k and over-€250k, see theirportfolio here. Alternatively you can check out Crunch Base / Angel List @capenterprise 20
  21. 21. Active London Angels… • http://bamlondon.blogs html • @capenterprise 21
  22. 22. Specialist FundsWomen- Stargate Capital- Trapezia- FSE- Incito- Aspire Fund - Bridges Sustainable Fund- Ingenious Media- Cleantech Fund opportunities/clean-energy- Carbon Trust- Low Carbon Accelerator- CT Investment Partners- Wellington Partners- Big Society Capital- Sources of Social Finance- Bridges Venture Fund Big Issue Investment- Social Finance- Social Investment Fund- @capenterprise 22
  23. 23. Q &A@capenterprise 23
  24. 24. The @capenterprise 24