Funding your Project - Raising Capital

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Funding your Project - Raising Capital

  1. 1. FUNDING YOUR PROJECTMark Renner and Phil Taylor<br />
  2. 2. SOURCES OF MONEY<br />Friends and Family<br />Bank<br />Professional Investors/Funds<br />
  3. 3. PROFESSIONAL INVESTORS<br />Angel Investors<br />Venture Capital<br />Private Equity<br />
  4. 4. ANGEL ORGANISATIONS CAN HELP FILL CAPITAL GAP<br />
  5. 5. SOURCE OF EQUITY FUNDS – TYPICAL YEAR<br />New Company Formation<br />
  6. 6. MARKET IN NEW ZEALAND<br />$300 million invested into 100 companies<br />Of the 100 companies:<br /><ul><li>79 are exporting
  7. 7. 29 have received investment from offshore investors
  8. 8. 23 emerged from either universities or Crown Research Institutes, and 19 have been part of business incubators
  9. 9. Auckland is home to 53 of the companies, with Christchurch hosting 16
  10. 10. 9 have been sold and 7 have been written off or liquidated
  11. 11. 28 of the investments were into seed stage enterprises, 56 were into start-up companies, 15 into early expansion companies, and 1 company at the expansion stage</li></li></ul><li>INVESTOR MINDSET<br />Profit<br />Risk<br />Valuation<br /><ul><li>Almost no pre-market company will be worth $1m
  12. 12. 1 or 2 of every 10 investments brings most of return
  13. 13. Hard to tell which companies will return
  14. 14. Angels looking for 10 to 30X potential
  15. 15. 30% of all exits in 2010 were in bankruptcy</li></li></ul><li>STATE OF THE MARKET<br />Its hard to raise new money<br />But money is available<br />Investors active in this space: <br /><ul><li>Endeavour Capital
  16. 16. BioPacific Ventures
  17. 17. University commercialisation arms
  18. 18. NZ Venture Investment Fund
  19. 19. Angel Associations</li></li></ul><li>DEAL FLOW STATISTICS – ANGEL GROUPS<br />Prescreening 1 in 4 to screening<br />Screening 1 in 3 to DD/present<br />Due Diligence 1 in 3 to investment meeting<br />Investment 1 in 2 raise money<br />OVERALL 1 to 4 in 100 who apply receive investment<br />
  20. 20. INVESTOR TERMS<br />Type of Security<br /><ul><li>Preference shares? Liquidation Preference.
  21. 21. Convertible note?</li></ul>Board seat<br />Protective provisions<br />Drags/tags<br />Pre-emptive rights<br />Exit<br />

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