Kick-Off - finance for startups

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  • Introduction2 : 00:05-00:10 - Xavier
  • Introduction2 : 00:05-00:10 – XavierMake profit.Value PropositionCore BusinessDetails can cost money
  • Accounting: 00:25-00:30 – XavierAs the future CEO, Chairman or simply shareholder of your company, you need some knowledge about accounting. Today, I will show you in 10 minutes the logic behind accounting and I will try to convince you that accounting is the first financial tool to manage your company.
  • Accounting: 00:30-00:35 - XavierBalance Sheet is a picture of what your company own and how your company financed all its assets.
  • Accounting: 00:35-00:40 - XavierYou have on your left all the revenues of your company.On the right, all the spending.The Blue is the purpose of your business: PROFIT
  • Financial Plan : 00:40-00:42 - XavierDon’tstartwithdetails. Go to the important figures.
  • Financial Plan : 00:43-00:44 - Xavier
  • Financial Plan : 00:45-00:46 - Xavier
  • Financial Plan : 00:47-00:48 - Xavier
  • Financial Plan : 00:49-00:50 – XavierHow many square meter you need per person ?Who knows the price per square meter of offices in Brussels ?
  • Financial Plan : 00:51-00:52 - Xavier
  • Financial Plan : 00:53-00:54 - Xavier
  • Financial Plan : 00:54-00:55 - XavierNext: MARTIN
  • Funding : 00:55-01:10 - MartinFriends Family and FoolsNext: LEO
  • Valuation : 01:10-01:15 - Xavier
  • Valuation : 01:15-01:20 - XavierConvertibles bonds, sharelholder’s agreement, made-to-measure
  • Valuation : 01:20-01:25 – XavierNext: MartinNow, you have to convince yourself, your partners and business angels to invest in your project
  • Q&A – 01:30-01:45 – Xavier & Martin
  • Kick-Off - finance for startups

    1. 1. Finance for Startups Martin van Wunnik Xavier Corman07/02/2012 Xavier Corman | Martin van Wunnik 1
    2. 2. Sponsors07/02/2012 Xavier Corman | Martin van Wunnik 2
    3. 3. Finance for Startups • Introduction • Company Setup • Accounting • Financial Plan • Funding your startup • Valuation / Dilution • Workshop’s details • Q&A • Pizza07/02/2012 Xavier Corman | Martin van Wunnik 3
    4. 4. Who we are ? Martin van Wunnik Xavier Corman07/02/2012 Xavier Corman | Martin van Wunnik 4
    5. 5. This presentation is available for free: http://www.meetup.com/Finance-for-Startups http://www.slideshare.net/xaviercorman07/02/2012 Xavier Corman | Martin van Wunnik 5
    6. 6. Creativity level Finance & Accounting level07/02/2012 Xavier Corman | Martin van Wunnik 6
    7. 7. Creativity level Reality check Funding  Value ? Investments, Costs, Revenues, Cash Financial Plan & Elevator pitch Organization/Company Finance & Accounting Team/Partners level07/02/2012 Xavier Corman | Martin van Wunnik 7 7
    8. 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 level07/02/2012 Xavier Corman | Martin van Wunnik 8
    9. 9. Why Finance for Startups ? If you dont think about the future, you cannot have one. John Golsworthy where you want to go You need to know how you are supposed to go07/02/2012 Xavier Corman | Martin van Wunnik 9
    10. 10. CASH Get payment Buy product Pay product Sell product Waiting payment 07/02/2012 Xavier Corman | Martin van Wunnik 10
    11. 11. Company Setup » Why should I ? » Capital » Hats/Personalities07/02/2012 Xavier Corman | Martin van Wunnik 11 11
    12. 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 contributions07/02/2012 Xavier Corman | Martin van Wunnik 12 12
    13. 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 !07/02/2012 Xavier Corman | Martin van Wunnik 13 13
    14. 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)07/02/2012 Xavier Corman | Martin van Wunnik 14 14
    15. 15. Hats/Personalities Founders – Shareholders Founders: (Board) 3 years responsibility Owners CEO (gérant/zaakvoerder) General Manager Directors CxO Employees07/02/2012 Xavier Corman | Martin van Wunnik 15 15
    16. 16. Accounting: notions • Balance Sheet – Bilan – Balans • Profit & Loss – Compte de résultat – Winst-en Verliesrekening • Cash-flow – Trésorerie – Schatkist • Financial Plan – Plan financier – Financieel Plan07/02/2012 Xavier Corman | Martin van Wunnik 16
    17. 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 Debts07/02/2012 Xavier Corman | Martin van Wunnik 17
    18. 18. Accounting: Profit & Loss (P&L) COGS (Cost of Sales) Personnel Costs Gross margin General Expenditures Revenues (Sales…) Added Value Depreciation EBITDA Financial cost Profit07/02/2012 Xavier Corman | Martin van Wunnik 18
    19. 19. Financial PlanContent – Assumptions – Profit & Loss – Balance Sheet / Investment – Cash-Flow -> Cash needed – Valuation of the project – Profitability / return of the project07/02/2012 Xavier Corman | Martin van Wunnik 19
    20. 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 ?07/02/2012 Xavier Corman | Martin van Wunnik 20
    21. 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 ?07/02/2012 Xavier Corman | Martin van Wunnik 21
    22. 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 assumptions07/02/2012 Xavier Corman | Martin van Wunnik 22
    23. 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…07/02/2012 Xavier Corman | Martin van Wunnik 23
    24. 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 Profit07/02/2012 Xavier Corman | Martin van Wunnik 24
    25. 25. Financial Plan / Investments List all your scheduled investments YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 507/02/2012 Xavier Corman | Martin van Wunnik 25
    26. 26. Required Cash-Flow07/02/2012 Xavier Corman | Martin van Wunnik 26
    27. 27. Funding Some remarks Principles Options07/02/2012 Xavier Corman | Martin van Wunnik 27 27
    28. 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.php07/02/2012 Xavier Corman | Martin van Wunnik 28 28
    29. 29. http://www.ideaowl.com/blog/2011/06/microconf-2011-3-surprises- and-learnings-from-best-conference-ever/07/02/2012 Xavier Corman | Martin van Wunnik 29
    30. 30. Interest – Returns 100  102 Bank 100  0..1000 Stock market 100  100 F.F.F. 100  107 Bank 100  130 BA / VC07/02/2012 Xavier Corman | Martin van Wunnik 30 30
    31. 31. 100+7=107 Bank Principal & Interest  Able to pay back over time  Guarantees07/02/2012 Xavier Corman | Martin van Wunnik 31 31
    32. 32. How to finance your start-up ? Clients FFF Suppliers BA Banks VCShareholders Crowd Equity LT Debts ST Debts Public Banks Shareholders 07/02/2012 Xavier Corman | Martin van Wunnik 32
    33. 33. 07/02/2012 Xavier Corman | Martin van Wunnik 33 33
    34. 34. Valuation• The value of any business is the present value of the future income stream• You sell future virtual profits for present real money07/02/2012 Xavier Corman | Martin van Wunnik 34
    35. 35. Valuation Exit Money Sweat Money Year 1 Year 2 Year 3 Year 4 Year 5 Year 607/02/2012 Xavier Corman | Martin van Wunnik 35
    36. 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 Round07/02/2012 Xavier Corman | Martin van Wunnik 36
    37. 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)07/02/2012 Xavier Corman | Martin van Wunnik 37
    38. 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 Friedman07/02/2012 Xavier Corman | Martin van Wunnik 38
    39. 39. Questions & Answers Free download: http://www.slideshare.net/xavierCorman http://www.meetup.com/Finance-for-Startups/messages/boards/07/02/2012 Xavier Corman | Martin van Wunnik 39

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