Entrepreneurial Funding Sources for Australia

Metamorph Consulting Group


Entrepreneurial Funding Sources

• 1 Hour

• 3 Full Presentations Compressed

Presented by Metamorph Consulting Group

save time & money today, empower for tomorrow

Metamorph Consulting Group is a team of Entrepreneurs, MBA’s and Engineers who work alongside Successful and Emerging Companies;

we provide the Analytical, Technical and Strategic horsepower that's saves time and money from

existing operations, and empowers businesses for a sustainable future.

Ways we can Help

• Training – Develop the Internal Capability to “Do it Yourself”. Best Suited for Companies with Cash

flow Restrictions or investing in staff development.

• Collaboration – Additional Horsepower and augmented staff capability to “Do it Together”.

• Outsource – Suited for Companies with limited resources or time constraints. “Do it for Me”

approach means we do the heavy lifting, you get the benefits.

Today’s EFS Program

• Introduction

• FFF, AI & VC Funding

• Bootstrapping

• Crowdsourcing

• Summary

• 3 Slides of Shameless Self Promotion

Legal Disclaimer

• We are not financial advisors.

• Recommend you seek financial advice before pursuing any of the ideas presented in this online seminar

Business need money to grow

$$$$$

$

Why Do Businesses Seek Funding?

• 6% Export Activities

• 63% to cover Start-Up costs

• 7 % for R&D

• 24% to Buy new Equipment

POLL – Why do you need funding?

Business Financing

•Angel investors

•Venture capitalists

•Banks

•IPO

•Crowdfunding

•Personal Financing

•Friends family & fools

•Bootstrapping

•Government grants

•Friends family

Financing Life Cycle

How much money you get

• Family and Friends: (FFF) Invests before anyone else at the lowest price. Typically $10-15k

• Angel Investors: (AI) has at least $1,000,000 or $200,000 annually – is an accredited investor. Invests own money

• Venture Capitalist: (VC) persuades others to put money into his fund. Invests that money, starting at $500,000 series A funding

• Investment Banker: (IB) does IPO paperwork and sells a lot of stock, gets 7% of the whole IPO for it

When and How Much?

• Idea Stage –It’s an Idea you should seek $0 (You)

• Start-up – $100k Valuation you should seek $15k (FFF)

• Seed Round –$1M Valuation you should seek $200k (AI)

• Series A –$4M Valuation you should seek $2M (VC)

• IPO –$2.6B Valuation you should seek $265M (IB)

What’s your business valuation?

• Basic Method

– P&E – (Plant & Equipment)

– EBPITD - (Earnings before proprietor drawings, interest, tax & depreciation)

– SaVP – (Stock at Valuation Price)

$$$ = P&E + EBPITD + SaVP

POLL – What’s your business worth?

What do Investors look for?

•Risk vs. Return

• Action – That You’ve made progress

• An strong & executable plan

• Key Management team members

• A viable business model

• A financial model & financing roadmap

• Clean & Clear IP position

How Metamorph can Help

• Strategic Planning, remove risk and develop a strong executable plan.

• Leadership & Organisation Development, develop a recruitment strategy & development plan for staff.

• Sustainable Competitive Advantage strategies to ensure IP is captured and exploited.

More Info?Google: #metabiz investor

Start a Conversation#metabiz

What is Bootstrapping?

“To finance your company’s startup and growth without the assistance of or input

from others”

POLL: Who’s heard of bootstrapping?

Who is it For?

• Startups on a shoestring budget

• Growing Businesses with stretched resources

• Lean operations that want to maintain equity stake

• Bad Credit/No Credit Business in Early Development

• Cashflow constrained businesses wanting to expand

What it’s Not

• Magic Pill that will solve all your financial/cashflow problems

• Easy - It requires Discipline and Effort

• Something that only small businesses do

Advantages

• Your business will be worth more because less money has been borrowed, and therefore, no equity positions had to be

relinquished.

• You won't have to pay the high interest on borrowed money.

• Coming from a stronger position (with less debt on hand), you look more desirable to external lenders and investors when the time does come to raise money through these routes.

• You can be creative in finding ways to raise profits, without having to look to external sources. It will give you the added

confidence of business savvy.

6 Sources of Bootstrap Finance

Trade credit for regular purchases

Factoring from Invoices

Customer Financing

Real Estate Equity / Lines of Credit

Vendor Finance

Leasing

•How the Apple I was born

•Steve Jobs Went to Byte Shop and got purchase order, went to Crammer electronics and got parts on

trade credit after presenting purchase order.

•It wasn’t easy, even for Jobs, with no history.

• Latrobe Valley Based

• Formed in 2001 by Darren Kelly & Lance Willis

• Focused on developing long-term supplier relationships with customers in the Pulp & Paper and Power

Industries asking for cash in advance

• Employing over 100 Employees at peak periods

• Melbourne Based Manufacturer

• Monique & Danielle Started on Personal Savings and in 2009

• Won Multiple Design/Product awards and continues to expand in Clayton on a mix of bootstrapping

principles

• No marketing Budget - All PR

More Info?Google: #metabiz bootstrapping

Crowdfunding

“Collective effort of individuals who network & pool their money usually initiated via the internet, to support

efforts by other people or organisations.”

POLL: Who’s Used Crowdfunding before?

Crowdfunding Basics

Is it Legitimate?

• Make up your own mind

• Massolution put out data showing the overall crowdfunding industry has raised $2.7 billion in 2012, across more than 1 million individual campaigns globally. In 2013 the industry is projected to grow to $5.1 billion. (Confirmed that it did)

2 Types of Crowdfunding

•Donation based funding• Donate via collaborative goal process in return for products,

perks or rewards.

•Investment Crowdfunding• Individuals become owners & shareholders for financial return

potential

Recent Scrutiny

•Funding of a company by selling small amounts of equity to many investors.

• Scrutiny in the US

• Mentioned in JOBS Act.

• Awaiting tighter Legislation

What can be Crowdfunded?

•Disaster Relief

•Artistic Creation

•Political Campaigns

•Not-For Profit Initiatives

•Startup Company Funding

•New Product Developments

Top 10 Crowdfund Platforms

• Kickstarter

• Indiegogo

• Crowdfunder

• RocketHub

• Crowdrise

• Somolend

• appbackr

• AngelList

• Invested.in

• Quirky

POLL: Which have you heard of?

What’s your Network Worth?

• How much could you potentially raise?

• A. How many people are in your network• Social Media Connections and Beyond

• B. Average amount per Contributor• Average US contribution is $75

Network Value = A x B

Funding Catalysts

3rd Degree3rd Degree

2nd Degree2nd Degree

1st Degree1st Degree

CoreCore

Plan your Funding

Basic$1K – 10K

Intermediate $10K - $100K

Advanced$100K+

Contributors 40 to 20 150 or more 1000+

Campaign (days) 30-45 30-60 30-75

Time required (per day) 15 mins to 2 hrs 1 to 2 hrs 2 to 4

Campaign activityMethodical, yet flexible & dynamic plan

involving consistent emails and social media conversations.

Same as basic, plus.

Blog influence

Same as Intermediate plus.

Press support and broader reach

Relationship with networkEstablished trust between the Project

Leaders and their Tier 1 and part of their Tier 2 Network

Established trust between the Project Leaders and their Tier 1 and Tier 2 Networks, and part of their tier 3.

Established trust between the Project Leaders and their Tier 1 and Tier 2 Networks, and part of their tier 3.

Many times the project leaders are stars in their niche/community and have an engaged and energised fan

base

Review and Launch

How Metamorph can Help

• Strategic Planning, develop your Crowdsource strategy, choose the right platform, develop the best campaign and ensure the greatest Crowdfunding success.

• Strategic Marketing to get you the best platform to communicate your crowdfunding initiative. Get your campaign to go Viral!

More Info?Google: #metabiz crowdfund

Government Grants

www.grantslink.gov.au

http://www.business.vic.gov.au

http://www.business.gov.au

http://www.grantslink.gov.au/

http://www.business.vic.gov.au/

http://www.business.gov.au/

More Info?Google: #metabiz grants

Metamorph Services

• Business Intelligence & Data Analysis

• Strategic Planning & Innovation

• Asset Optimisation & Reliability

• R&D & Advanced Engineering

Entrepreneurial Funding Sources for Australia

Business

Transcript of Entrepreneurial Funding Sources for Australia