Financing your Startup

8/6/2019 Financing your Startup

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@leozebaEng. Civil, UFPE, 1997

Eng. Civil, UFPE, 2001 (mestrado)

CriptografiaeSegurançaEmRedes, UFF, 2007 (especial ização)

EZTIVA

Sócio-fundador , 2008

LOOPS

Sócio-fundador , 2009

Personal Democracy Forum, NYPremium Member , 2010



Permite a criaçãoe amanifestação de apoio aprojetos de Lei deIniciativa Popular,utilizandoassinaturaldigital com

qualquercertificadoválidonaICP-Brasil. Visaeliminaroproblemadalogísticaassociadaàcoleta de

assinaturas, além depossibilitar averificaçãoprática dasmesmas.

eztiva.com/iniciativapopular



Mashup do GoogleMaps,com oFlickre YouTube,quepermitiaaosusuáriosdarem a suavisãosobreoRio de Janeiro, durante acampanha de 2008

denunciandoproblemas,apontandosoluçõesoumesmoelogiandoações. Osusuáriospodiamvotarecomentaros posts dos

outroseocandidato secomprometia a,casoeleito,utilizaresterelatóriocomodiagnósticoinicialdacidade.

gabeira43.com.br



É oagregador deconteúdo web 2.0 dospolíticos do Brasil.

Seu principalobjetivoéproporcionar um

ambienteonde apopulaçãopossainteragirdiretamente comospolíticosetambém seorganizar,

acompanhareexigirtransparênciaeéticadaclassepolítica.

eztiva.com/politweets



Mobilização socialdacampanha a presidentede 2010 do PSDB.Principal fonte deinformaçãoetroca deconteúdoeexperiências

entreosMobilizadoresespalhadospelopaíse no mundo.

redemobiliza.com.br



A startup is a

temporaryorganization designedtosearch for a scalable andrepeatable business model



A business model describes

the value logic of an organizationin terms of how it creates andcaptures and delivers value



Seed capitalSeed capitalis the initial capital used to start a

business. Seed capital often comes from the company founders· personal assets,from friends and family orangel investors.

AngelAngel

InvestorInvestor



Tech Startup FinancingIs Changing

http://mashable.com/2011/04/12/tech-financing-changes/



1.M

ost Capital RaisesHave Gotten Smaller




2.A

ngels Have GottenOrganized




3. Venture Capital Has

Gotten More ExpensiveCompared to the Risk

Exposure




4. There Are Far More

Financing AlternativesThan Existed Even

Five YearsA

go




http://www.avc.com/a_vc/2011/05/financing-options-for-startups.html




1) Friends and Family

it is easy to get a hearing from the people who knowyou best and they are positively inclined to say yes+they often cannot

come up with a lot of capital

you really don't want to lose moneythat friends and family have invested with you

20-25% discount.

10% Cap.




2) Contests/Prizes/Accelerator Programs

the biggest value comes from the mentoring and theopportunity to pitch to a large group of angel investors+excellent for teams that are just getting started and

that have not had a lot of startup experience

+money is sufficient to fund the founding team for thethree month program and often can last a bit longer

$ 20.000 - 30.000

5% - 6% equity




3) Government Grants

grants are usually "free money" in the sense that theydo not need to be paid back and they don't cost any equity+The application process is usually long, involved,

and distracting

grants come with strings attached; you can't move,you have to use it for a specific purpose

$ 20.000 - 60.0000

0% equity




4) Customer Financing

customer financing is typically non dilutive+building a product explicity for one customer often

makes it less applicable to the market as a whole

risk building a "fee for services culture" in yourcompany

$ convince

0% equity




6) Convertible Debt

dilute less if the company believes its equity will beworth more at a later date+transaction costs, mostly legal fees, are usually less

when issuing debt vs equity

+ sometimes there is compensation in the form of adiscount or a warrant, typically have some cap

$ ?

?% equity




7) Preferred Stock

is a class of stock that provides certain rights,privileges, and preferences to investorsif the value of the sale is below the valuation the

investors paid, then they will get their money back.

right to a board seat, information rights,right toparticipate in future rounds to protect their %, etc.

$ ?

?% equity



Discover Customers(Steve Blank, SteveBlank.com)



LEARN BUILD

MEASURE

IDEAS

CODE

DATA

Iterate: Learn, Measure, Build.(Eric Ries, StartupLessonsLearned.com)



Startup Metrics for Pirates

� Acquisition:users come to site from various channels

� Activation: users enjoy 1st visit: "happy´ experience

� Retention: users come back, visit site multiple times� Referral:users like product enough to refer others

� Revenue: users conduct some monetization behavior

AARRR !

(note: If youre in a hurry, Google

Startup Metrics & watch 5m video)



Example Conversion Metrics(note: *not* actuals your mileage may vary)

Stage Conversion Status Conv.%

Est. Value(*not* cost)

Acquisition Visitors -> Site/Widget/Landing Page

(2+ pages, 10+ sec, 1+ clicks = don¶t abandon)

60% $.05

Activation ³Happy´ 1st Visit; Usage/Signup

(clicks/time/pages, email/profile reg, feature usage)

15% $.25

Retention Users Come Back; Multiple Visits

(1-3x visits/mo; email/feed open rate / CTR)

5% $1

Referral Users Refer Others

(cust sat >=8; viral K factor > 1; )

1% $5

Revenue Users Pay / Generate $$$

(first txn, break-even, target profitability)

2% $50



10 Slides to an Awesome Pitch

1. Elevator Pitch

2. The Problem

3. Your Solution4. Market Size

5. Business Model ($)

6. Proprietary Tech

7. Competition

8. Marketing Plan9. Team / Hires

10. Money / Milestones

DemoGoes Here

Teaser Image

Goes Here



YES,Angels Fall from Sky!



In BrazilIn Brazil



In the rest of the WorldIn the rest of the World

VC Per Capita: Europe $7, US $72, Israel $142, Silicon Valley $ 1800



Does it work???



DON·T DO A STARTUP«YOU WILL FAIL



Youve worked at Microsoft for >5 yrs.

You Drive a Nice Car.

You Live in a Big House.

You Dont Worry About Paying Bills.

You Want to Kiss The Kids Goodnight.

Your Spouse > Your Startup.

You Dont Know or Use Social Platforms (Facebook, Twitter, YouTube).Youve never built Facebook or iPhone App, or a Social Game.

Youve never sent an email campaign, written a blog post, or run

an affiliate marketing campaign.

DON·T DO A STARTUP«YOU WILL FAIL



´If you·re not making mistakes you·re not trying.µ - WyntonMarsalis

fail fast and learn fast (ITERATE)

´Success is 99% Failure.µ - Soichiro Honda

´I failed my way to success.µ - Thomas Edison



´The problem is that

we don·t understandthe problem.µPaul MacCready



Value = Team* + Product + Traction



LESSONS!!!

1. Avoid sexy tools.2. Ask smarter people.3. Throw away hard work.4. You don·t have all the answers.

5. You could be wrong.6. You could be right.7. It·s a relationship with the investors.8. They aren·t investing in your ideas.9. They are investing in you as a person.10. Hire slowly, fire fast.11. Build your products based on customer development.12. Build the minimal viable product (MVP).



13. Choose your partners wisely.14. Seek excellent legal advice.15. Go with your gut.16. Get out of your house.

17. Always be prepared.18. Always remain determined.19. Read these books.`

LESSONS!!!



DO IT!

Financing your Startup

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