How Investment Works - Debunking Common Myths About Raising Capital
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Investment: Busting the Myths - David Carvalhao
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How Investment Works - Debunking Common Myths About Raising Capital
- 2. 2 MYTH #1 IF THEY LIKE YOUR PROJECT YOU WILL GET INVESTED
- 4. 4 Thatās you right hereā¦ How investment works ā¦and your company + = Peanuts!
- 5. 5 Thatās you right hereā¦ How investment works ā¦and your company + = Still youā¦ Bigger is better + = WOW, now look at that! Peanuts!
- 6. 6 Thatās you right hereā¦ How investment works ā¦and your company + = Still youā¦ ā¦and your company + =
- 7. 7 MYTH #2 INVESTORS BUY SHARES FROM YOU
- 8. 8 The morning after valuation Someone offers you to put 20k into your company for 20%, valuing it at 100k P R E - M O N E Y You need the money and the valuation seems fair soā¦ why not Y O U TA K E I T Now your company is worth 120k and those 20% are actually worth 24k P O S T- M O N E Y
- 9. 9 MYTH #3 WHEN YOU GET INVESTED YOU BECOME RICH
- 10. 10 Tag alongs and other traps O R H O W Y O U R E A L L Y D O N ā T W A N T T O C O M E U P I N T H E N E W S
- 11. 11 MYTH #4 INVESTMENT WILL EMPOWER YOU
- 12. 12
- 13. 13 THE LONER Only you invest in your company because you have a great idea but donāt have any friends.
- 14. 14 THE DUET You found someone that believes in your idea and co-funds it with time and money. Youāre each otherās best friend because you still donāt have any others.
- 15. 15 FAMILY, FRIENDS &MOSTLY FOOLS Guess you have some friends after all, they are foolish enough to invest in you and you are going to waste their retirement money away. Leaving you again with no friends.
- 16. 16 YOUR ANGEL COMES ONBOARD Someone that seems to know what (s)heās doing comes on board with some money and a lot of advice. You wish for a little more money and a little less advice.
- 17. 17 THE RICHER YOU GET, THE LESS YOU CALL THE SHOTS Real money starts pouring in, you discover you a are a lot more attractive you ever thought you were and some people start telling you what to do. Youāre living the life and you donāt really care.
- 18. 18 THE RICH EMPLOYEE Anyone in the world can own your company, you are ofļ¬cially a puppet of your investors. They can and will ļ¬re you if you donāt do what they want!
- 19. 19 THE RICH EMPLOYEE Anyone in the world can own your company, you are ofļ¬cially a puppet of your investors and they can and will ļ¬re you if you donāt do what they want!
- 20. 20 MYTH #5 YOU GET MONEY BECAUSE YOU MAKE MONEY
- 21. 21 āreported an operating loss of $3 billion in 2018 afterĀ losingĀ more than $4 billion the previous year.ā
- 22. 22 āreported an operating loss of $3 billion in 2018 afterĀ losingĀ more than $4 billion the previous year.ā
- 23. 23 āĀ went public five years ago, made a profit of $91m (Ā£65m) in the fourth quarter of 2017, compared with a $167m loss a year earlierā
- 24. 24 āĀ went public five years ago, made a profit of $91m (Ā£65m) in the fourth quarter of 2017, compared with a $167m loss a year earlierā
- 25. 25
- 26. 26 EA BaU NC Early Adopters 20% 60% 20% Business as Usual CAC CAC CRC CRC
- 27. 27 EA BaU NC Early Adopters 20% 60% 20% Business as Usual CAC CAC CRC CRC Scenario: 1M Early Adopters CAC: 1ā¬ BaU CAC: 5ā¬ Customer base value: 4 Mā¬
- 28. 28 VALUATION Valuation = CTC x R x TTM CTC - Cost To Copy R - Risk Factor TTM - Time To Market Factor
- 29. 29 MYTH #6 ALL INVESTORS ARE MADE EQUAL
- 30. 30 The Greedagram Your investor knows what (s)heās doing but is willing to risk the long term viability of your company in exchange for short term returns. S M A R T G R E E D Y More prevalent than most investors like to admit, these will potentially help sink your business. D U M B G R E E D Y Your dream investor. If you find one of these, keep it! S M A R T N O T S O G R E E D Y Not terribly bad, these usually leave you mostly alone. D U M B N O T S O G R E E D Y S M A R T M O N E Y J U S T M O N E Y N O T S O G R E E D Y G R E E D Y
- 31. 31 MYTH #7 THE MORE MONEY THE BETTER
- 32. 32 2018 Too much money too early 100 Mā¬ 20 Mā¬ for 20% 2019 200 Mā¬ 2020 400 Mā¬ 2021 1000 Mā¬ 3 Mā¬ for 3% 7 Mā¬ for 3.5% 10 Mā¬ for 2.5%
- 33. 33 2018 Too much money too early 100 Mā¬ 20 Mā¬ for 20% 2019 200 Mā¬ 2020 400 Mā¬ 2021 1000 Mā¬ 3 Mā¬ for 3% 7 Mā¬ for 3.5% 10 Mā¬ for 2.5%
- 34. 34 2018 Too much money too early 100 Mā¬ 20 Mā¬ for 20% 2019 200 Mā¬ 2020 400 Mā¬ 2021 1000 Mā¬ 3 Mā¬ for 3% 7 Mā¬ for 3.5% 10 Mā¬ for 2.5% Equity retained: 91% Equity retained: 80%
- 35. 35 2018 Too much money too early 100 Mā¬ 20 Mā¬ for 20% 2019 200 Mā¬ 2020 400 Mā¬ 2021 1000 Mā¬ 3 Mā¬ for 3% 7 Mā¬ for 3.5% 10 Mā¬ for 2.5% Equity retained: 91% Equity retained: 80%
- 36. 36 MYTH #8 YOU NEED INVESTMENT TO GET FUNDING
- 37. 37 DIAGRAM SECTION Y O U C A N W R I T E H E R E A c o m p a n y i s a n a s s o c i a t i o n o r c o l l e c t i o n o f i n d i v i d u a l s , w h e t h e r n a t u r a l p e r s o n s , l e g a l p e r s o n s , o r a m i x t u r e o f b o t h . C o m p a n y m e m b e r s s h a r e a c o m m o n p u r p o s e a n d u n i t e i n o r d e r t o f o c u s . Free money given by the government, public or private institutions. G R A N T S Mostly banks, but also individuals. L O A N S Getting your clients to fund you in advance. C R O W F U N D I N G & I C O s Playing with cash-flow. F I N A N C I A L E N G I N E E R I N G A L T E R N A T I V E S
- 38. 38 BONUS MYTH THERE IS NO SUCH THING AS FREE MONEY
- 39. 39 āIf someone offers you FREE MONEY you go and GET ITā D AV I D ā S 1 S T L A W O F I N V E S T M E N T
- 40. 40 DAVID CARVALHĆO PROFESSIONAL DOER david@carvalhao.com +351 91 430 92 11 linkedin.carvalhao.com facebook.carvalhao.com SUBSCRIBE NOW!!! THE INNERPRENEUR TOOLBOX TELEGRAM.CARVALHAO.COM instagram.carvalhao.com