Slides of the Kick-Off 'Finance For Startups'

1. Finance for Startups
Martin van Wunnik
Xavier Corman
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2. Sponsors
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3. Finance for Startups
• Introduction
• Company Setup
• Accounting
• Financial Plan
• Funding your startup
• Valuation / Dilution
• Workshop’s details
• Q&A
• Pizza
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4. Who we are ?
Martin van Wunnik
Xavier Corman
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5. This presentation is available for free:
http://www.meetup.com/Finance-for-Startups
http://www.slideshare.net/xaviercorman
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6. Creativity
level
Finance & Accounting
level
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7. Creativity level
Reality check
Funding  Value ?
Investments, Costs, Revenues,
Cash
Financial Plan & Elevator pitch
Organization/Company
Finance & Accounting
Team/Partners
level
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8. Creativity level
1.000 EUR
21% VAT
(quarterly or monthly refund
request/compensation)
Investments 
Cash out: 1.210 EUR
Cash in: 210 EUR (>3m)
Profit impact: 200 EUR over 5y
Cost 
Cash out: 1.210 EUR
Cash in: 210 EUR (>3m)
Profit impact: 1.000 EUR
Discounted Cash Flows Finance & Accounting
level
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9. Why Finance for Startups ?
If you don't think about the future,
you cannot have one.
John Golsworthy
where you want to go
You need to know
how you are supposed to go
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10. CASH
Get payment
Buy product Pay product Sell product Waiting
payment
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11. Company Setup
» Why should I ?
» Capital
» Hats/Personalities
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12. Why should I ?
Limit your liabilities !
Professional touch
Fiscal 34% (24% for 3y)
Succession
...
Formalities & some costs
(bank, notary, KBO/CBE, social secretary)
Double entry accounting
Revisor for in-natura contributions
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13. Minimum capital
Legal
BVBA-SPRL (min.1)
CVBA-SCRL (flexible)
18.550 EUR  6.200 EUR
(or 12.400 EUR)
SA-NV (min.2):
61.500 EUR
REAL minimum = Business required !
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14. Shareholders  Control (>51%)
Absolute / Relative majority
40% - 60%
40% - 10% - 10% -10% -10% -10% -10%
Voting Rights
Class A & B
Minority (blocking) interest
Investors per phase (dilution)!
Stock options:
fiscal implications, buyer required
vesting conditions : targets, period (4y)
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15. Hats/Personalities
Founders – Shareholders Founders:
(Board) 3 years responsibility
Owners
CEO (gérant/zaakvoerder)
General Manager
Directors
CxO
Employees
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16. Accounting: notions
• Balance Sheet – Bilan – Balans
• Profit & Loss – Compte de résultat – Winst-en Verliesrekening
• Cash-flow – Trésorerie – Schatkist
• Financial Plan – Plan financier – Financieel Plan
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17. Accounting: Balance Sheet
ACTIVE PASSIVE
Equity (Capital/Kapitaal)
Non Current Assets
(Actifs Immobilisés/
Vast Activa)
LT Debts
Current Assets
(Actifs circulants/
Vlottend Activa) ST Debts
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18. Accounting: Profit & Loss (P&L)
COGS (Cost of Sales)
Personnel Costs
Gross margin
General Expenditures
Revenues (Sales…)
Added Value
Depreciation
EBITDA
Financial cost
Profit
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19. Financial Plan
Content
– Assumptions
– Profit & Loss
– Balance Sheet / Investment
– Cash-Flow -> Cash needed
– Valuation of the project
– Profitability / return of the project
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20. Financial Plan in 10 min
• Don’t waste your time in developing a huge
financial plan before to be sure that your
project is viable !
• In many case, in less than 10 minutes, you can
see if your idea worst something.
• How to make a very quick financial plan ?
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21. Financial Plan in 10 min /questions
What are your revenues ?
What are your costs ?
What are your investments ?
How many persons for your project ?
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22. Financial Plan / Prerequisites &
Assumptions
• Financial plan for 3 to 5 years
• Monthly or Quarterly base
• Excel or Calc is your friend
• Start by listing your main assumptions
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23. Financial Plan / Tips for assumptions
• Office: 25 m²/person
• Price of offices: EUR 100/m²/year + 15 % for
maintenance
• Insurances: 1 % of revenues
• Marketing: define a % of revenues + starting
investment
• Don’t forget lawyers, accountant, social
secretary, office supplies…
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24. Financial Plan / Profit & Loss
Revenues (Sales…)
COGS (Cost of Sales)
General Expenditures
COSTS
Personnel Costs
Financial cost
Depreciation CASH
CASH-FLOW IF NEGATIVE DRAIN
Profit
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25. Financial Plan / Investments
List all your scheduled investments
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
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26. Required Cash-Flow
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27. Funding
Some remarks
Principles
Options
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28. Funding, ‘Financing’
And entrepreneurs? They seem to have confused the definition of
entrepreneurship altogether.
Entrepreneurship, they mistakenly believe, equals financing!
This is wrong.
Over 99% of entrepreneurs who seek funding get rejected.
Yet, the entire world is focused on the 1% that is "fundable."
http://www.readwriteweb.com/start/2012/01/the-other-99-of-entrepreneurs.php
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29. http://www.ideaowl.com/blog/2011/06/microconf-2011-3-surprises-
and-learnings-from-best-conference-ever/
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30. Interest – Returns
100  102 Bank
100  0..1000 Stock market
100  100 F.F.F.
100  107 Bank
100  130 BA / VC
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31. 100+7=107 Bank
Principal & Interest
 Able to pay back over time
 Guarantees
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32. How to finance your start-up ?
Clients
FFF
Suppliers
BA
Banks
VC
Shareholders
Crowd
Equity
LT Debts
ST Debts
Public
Banks
Shareholders
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34. Valuation
• The value of any business is the present value
of the future income stream
• You sell future virtual profits for present real
money
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35. Valuation
Exit Money
Sweat Money
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
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36. Valuation - What is dilution ?
100%
15% 20%
90% 25%
80%
12%
70% 15% VC 2
60% 9% VC 1
50%
85% BA
40%
68% Founder(s)
30% 51%
20%
10%
0%
Start 1st Round 2nd Round
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37. Next Workshops
06/03/2012 | 18:30 – 20:30 • Company Setup
20/03/2012 | 18:30 – 20:30 • Accounting
17/04/2012 | 18:30 – 20:30 • Financial Plan
15/05/2012 |18:30 – 20:30 • Funding
29/05/2012 |18:30 – 20:30 • Valuation
Venues still to be defined (Brussels)
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38. There is no free-lunch*
Each workshop = 90 EUR vat incl.
WeStartup members: 50 EUR (VAT incl.)
MAX 10
pers/workshop
2 hours + Slides + Foods & Drinks
* Milton Friedman
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39. Questions & Answers
Free download:
http://www.slideshare.net/xavierCorman
http://www.meetup.com/Finance-for-Startups/messages/boards/
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