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Welcome
“Start a Business And Change the world???”.
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Our Agenda
- Introduce you to new thinking of how to start a business
- Introduce you to the Lean Start-up principles including MVP
- Demonstrate how to use the Business Model Canvas
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Investment
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Going Self-employed vs Starting a Growth Business
Self Employed need • To turn a pre-acquired
skill/know-how into a service• Portfolio (Evidence)• USP• Easy access to customers (i.e.
contacts./ networks)• Self-Confidence • Basic business know-how• Low volume/ high margin• Cashflow
Entrepreneurs need• A team• A large market opportunity. • A WOW• Key Partners/ Early Evangelists. • A solution/ offer customers will
buy/use.• A “Market Validated Business
Model” that is both repeatable, predictable and scalable.
• Resources and Investment ££££• ROC X 10 ?
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“There is an opportunity gap when the scope for growing income at a very fast rate is
limited for those who have too little to invest , but expands dramatically for those who can
invest a bit more.”
Banjaree &Duflo- Poor Economics
What is A Start-Up?
“a start-up is an organization formed to search for a repeatable and scalable business model”- Steve Blank- “4 Steps to an Epiphany”
“an organization dedicated to creating something new under conditions of extreme uncertainty”- Eric Reis- “Lean Start-up”
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Traditional Start-Up Model
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Have an Idea
Get Idea Validation
Develop a business plan
Source Funding/ Resources
Launch Business
Valley of Death- See if anyone will buy
my product.
Get Set-Up Guidelines
Post- StartPre-Start
See Steve Blank, Four Steps to the Epiphany
Attempts to Premature Scale is the No 1 reason that ambitious business start-ups fail.- Source Start-up Genome.
New Start-up Model
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Customer Discovery
http://www.businessmodelgeneration.com/downloads/value_proposition_designer_draft.pdf
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Importance of FIT
Problem Solution
“In life a hypothesis that something is superior to something else cannot be scientifically proven
but it can be demonstrated”
Robert Hughes. RIP
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Part 5
Still Need Money
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Funding Runway • How much/ little money is
needed to set-up the business, get a MVP prototyped & beta tested, launch the business and get to breakeven or next round of funding.
• Going to need a Budget/ Cashflow/P&L forecast….
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Step1- Know the different types of finance available
• Bootstrapping through Personal resources (time and money = sweat equity you are investing)• FFF- Family Friends & Fools – People who will give you funds with little questions asked including
reward based crowd funders such as Peoplefundit. • Government Grants• Customers and Suppliers- “Build slowly at low risk by obtain credit from suppliers and growing
business through profits from paying customers”• Loan providers- “Increase business growth ambitions by increasing investment by taking out
debt”– Banks ( Overdraft-unsecured and secured loans)– Community Finance Institutions ( Soft/ unsecured loans for riskier ventures)– Leasing Companies.– Invoice lenders (Factoring, invoice discounting)– New loan markets such as Market Invoice and Funding Circle.
• Investors-– Private Investors- Business Angels such as Angel Capital– Venture Capitalist– Crowdcube– Government Backed Investment Funds
Matching the right mix of sources to the right stage and type of finance is the key to successful fundraising
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Step 2- Match the funding need to purpose?
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Information:
• Capital Enterprise What’s On in London- www.capitalenterprise.org/whats-on • Business Link - www.businesslink.gov.uk • Start- up Britain - http://www.startupbritain.org • British Library- www.bl.uk/bipc • HMRC Small Company Enterprise Centre- Source of advice and help
http://www.hmrc.gov.uk/manuals/vcmmanual/VCM10050.htm• HMRC R& D Tax Credits www.ucl.ac.uk/advances/advances-news/hmrc• HMRC Guide & Support- http://capitalenterprise.org/guide-to-rd-tax-credits • British Business Angel Association: www.bbaa.org.uk • Guide to Early Stage Investment: http://
www.paloalto.co.uk/about_us/Early_Stage_Investment_by_Alan_Gleeson.pdf
• Guide to 100 offers for start-ups – www.capitalenterprise.org
And if you have not checked them out please look at the latest schedule of advice and training events at :www.ngfc.org.uk .
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Need less than £10K to start?
- Sources of Grants- www.j4b.co.uk - Competition funding £1000 issued to 10+ businesses per month- http://www.shell-livewire.org - Princes Trust http://www.princes-trust.org.uk/need_help/enterprise_programme.aspx - £2500 Enterprise Loans for Under 25’s- http://www.startuploans.co.uk/ - New Enterprise Allowance Scheme – Check who delivers the scheme in London by e-mailing Capital Enterprise.- Community Development Finance Associations- http://www.cdfa.org.uk - Also check out North London Community Finance- ELSBC Access to Finance – Business Plan support for those looking to raise up to £10K• Soft loans for Creative Businesses- http://www.creativeindustryfinance.org.uk/
Need Less than £10K to Launch a
business
No Funds
Grant- www.j4b.co.uk
Unemployed? New Enterprise Allowance Scheme
Self Fund
BorrowWrite a simple
Business Plan & 12 month cashflow
Community Development
Finance Institution
Bank
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Banks only make a margin on loans of between 2-7% -so they can only afford very low default rates and this means they will not lend to a business or entrepreneur that is deemed “risky”. And you are deemed an unacceptable risk if:1. You have a bad credit history2. Failure rate in you business sector is high3. You have no confirmed customer invoices- no evidence of sales = no evidence you can re-pay the loan4. The business has no trading history – difficult to get a loan unless been trading for over 6 months5. You are unable to offer security to cover the bank if the business fails.6. Your customers are overseas –so there is a risk they cannot be legally forced to pay for goods ordered. 7. What you want to do with the borrowed money is widely regarded as having a poor success rate e.g.
Research and developing a new product and especially marketing.
Banks like RBS are the best source of relatively cheap loans for trading businesses.
You can’t a business loan from a bank because?
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Where do NGFC members fit
Figure 1. 4 Steps to developing a high growth business. ( Source HBR)
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Funding Product Development: Tech
Grants & Awards General• J4B- Portal for grant finding http://www.j4b.co.uk• Technology Strategy Board ( R&D Funding) - http://www.innovateuk.org -
http://www.innovateuk.org/content/competition/grant-for-rd-single-business.ashx• Knowledge Transfer Networks- www.innovateuk.org • London European Enterprise Network- http://www.een-london.co.uk • E Funding for SME R&D - http://www.eurostars-eureka.eu/what.do• EU Funding for R&D collaborations: http://ec.europa.eu/research/participants/portal/page/calls • Knowledge Transfer Partnerships funding support-
http://www.ktponline.org.uk/ktp-what-will-it-cost-my-business
Translation/ Follow on research funds. • www.rdfunding.org.uk/bulletin/queries/Search.asp?TheCloseMonth=July&TheYear=2011.• http://www.rcuk.ac.uk/kei/ktportal/Pages/Followon.aspx• https://ktn.innovateuk.org/web/145175/overview• http://www.ahrc.ac.uk/FundingOpportunities/Pages/BrowseOpportunitiesOld.aspx • http://www.ahrc.ac.uk/Pages/default.aspx • http://www.theculturecapitalexchange.co.uk/
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Funding the RunwayAccelerators : Training & Mentoring programmes that provide fast-track to seed funding forScalable new businesses• Lean Camp : http://leanca.mp - http://be.foundercentric.com/ • Start-Up Weekend: http://london.startupweekend.org • Launch 48: http://launch48.com• Tech Hub : http://www.techhub.com – Google Campus- http://www.campuslondon.com/ • FIG- http://www.findinvestgrow.com/ • Y-combinator- http://ycombinator.com/ • Tech Stars- http://www.techstars.com/ • Seed Camp: http://www.seedcamp.com • Hackfwd: http://hackfwd.com • Emerge Venture Labs- http://www.theemergelab.org • Ignite 100- http://ignite100.com • BBC Worldwide Labs- http://www.bbcworldwide.com/digital/labs.aspx • Springboard- http://springboard.com/ - http://www.f6s.com/profile/1961#programs/ajax-application • Student Start-ups- http://studentupstarts.com • Accelerator Academy- http://acceleratoracademy.com • Wayra- http://wayra.org/en/wayra • Euclid Opportunities- ( Fin Tech Only) http://euclidopportunities.com/ • Innovation Warehouse- http://www.theiw.org • Hubventurelabs - http://hubwestminster.net/hubventurelabs • Green Accelerator- http://bertiinvestments.com/berti-green-accelerator/ • Healthbox- http://www.healthboxaccelerator.com/
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CrowdfundersCrowd funding Platforms- Reward based Crowdfunding platforms- will help you to raise funding to build a proto-type and market test a great idea or product.- • www.kickstarter.com (USA)• www.indiegogo.com (USA)• www.peoplefund.it• www.sponsume.com • www.pleasefund.us • www.wefund.com • www.pozible.com • www.crowdfunder.co.uk
Equity/ investment Crowd funding platforms:
- www.crowdcube.com - www.seedrs.com
http://crowdfundingtech.eventbrite.com
Business AngelsAngel Investment - £100-500K Seed Investment
• NESTA - www.nesta.org.uk/investments • British Business Angel Association- www.bbaa.org.uk • Capital 4 Enterprise- http://www.capitalforenterprise.gov.uk/portfolio • Angel Co-Fund- http://www.angelcofund.co.uk/
Capital Enterprise top 10 Angel Networ in London1. London Business Angels: http://www.lbangels.co.uk 2. Oxford Early Investments- http://www.oxei.co.uk/about.php3. Envestors- www.envestors.co.uk4. Finance South East- www.thefsegroup.com5. Angels Den- www.angelsden.com6. Venture Director- www.venturedirector.com- www.boundarycapital.com 7. Start-up Funding Club- http://www.startupfundingclub.com/ 8. E100- London Business School - http://
www.london.edu/facultyandresearch/subjectareas/strategyandentrepreneurship/enterprise100.html 9. #1 seed- www.number1seed.co.uk 10. Keiretsu Forum- http://www.keiretsuforum.comFor an alternative list check out- http://www.designcity.co.uk/angelnews/edition_94.htm#article1
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Seed Enterprise Investment Scheme-SEIS is a tax break launched in April 2012 for UK tax payers to encourage them to buy shares in start-up companies registered in the UK The Facts: • SEIS investors can input £100,000 in a single tax year rising to a maximum £150,000 over two or
more tax years in to a single company• Investors cannot control the company receiving their capital• Investors pick up 50% tax relief in the tax year the investment is made, regardless of their
marginal rate.• In the 2012-13 tax year, tax payers can roll any chargeable gain in the tax year in to a SEIS with a
full capital gains tax exemption (another 28%)• The business must be a start-up company -registered in the UK within 2 years of claim. • The company must not employ more than 25 workers.• The company must have assets of less than £200,000.• The company has to trade in an approved sector – generally not in finance or investment, for
example, a property company raise capital as a SEIS.
SEIS- Tax breaks to encourage investment in start-ups
Specialist FundsWomen
- Stargate Capital- Trapezia- http://www.stargatecapital.co.uk/trapezia_1.aspx- FSE- Incito- http://thefsegroup.com/investors/business-angels/incito-ventures/- Aspire Fund - http://www.capitalforenterprise.gov.uk/files/Aspire%20Information%20Leaflet%20(v%202)%20Flyer%20brochure.pdf
Green- Bridges Sustainable Fund- http://www.bridgesventures.com/sustainable-growth-funds - Ingenious Media- Cleantech Fund http://
www.ingeniousmedia.co.uk/investments/investment-opportunities/clean-energy - Carbon Trust- http://www.carbontrust.com/about-us/our-investments - Low Carbon Accelerator- http://www.lowcarbonaccelerator.com - CT Investment Partners- http://www.ctip.co.uk - Wellington Partners- http://www.wellington-partners.com/wp/index.html
Social- Big Society Capital- http://www.bigsocietycapital.com - Sources of Social Finance- http://www.bigsocietycapital.com/finding-the-right-investment - Bridges Venture Fund http://www.bridgesventures.com/social-entrepreneurs-fund - Big Issue Investment- http://www.bigissueinvest.com - Social Finance- http://www.socialfinance.org.uk - Social Investment Fund- http://www.thesocialinvestmentbusiness.org
Early Stage VC’s & Supper AngelsAccel Partners: Stage agnostic, see their
portfolio here.
Anthemis Investment- Stage Agnostic, see their portfolio
here
Eden Ventures- Early- mid stage – see there portfolio here
Index Ventures: Stage agnostic, see their
portfolio here.
Passion Capital: Early Stage, see their portfolio
here.
Delta Partners: Early to mid-stage, see their
portfolio here.
Atomico: Stage agnostic, see their portfolio here.
Profounders: Early and mid-stage, see their
portfolio here.
AIB Seed Capital Fund: Managed by two funds
which invest under-€250k and over-€250k, see
their portfolio here.
• ACT: Early to mid-stage, see their portfolio here.
• Bloom Equity: Early to mid-stage angel syndicate, see their portfolio here.
• DFJ Esprit: Early to mid-stage, see their portfolio here.
• Charlotte St: Early to Mid Stage, see there portfolio here
• Dawn Capital: Early to mid-stage, see their portfolio here.
• Doughty Hanson- Stage Agnostic, see portfolio here
• Seraphim Capital – Early-mid stage see there portfolio here.
• Kernel Capital: Early stage, see their portfolio here.
• Octopus Ventures: Early to mid-stage, see their portfolio here.
• Hoxton Ventures ; Early stage with disruptive tech.
• EC1 Capital: Early stage, see their portfolio here
• Connect Ventures- Early stage and very New.
• Pen Tech Ventures- Early Stage to mid- See portfolio Here
Alternatively you can check out Crunch Base http://www.crunchbase.com/financial-organizations
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Active London Angels…
• http://bamlondon.blogspot.co.uk/p/angels_16.html
• https://angel.co/
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• The quality and “connections” of the management team• The size of the business opportunity/ funding need• The scope for building a sustainable competitive advantage• The level of risk/ security. • And the timeliness of the proposal
Will determine the attractiveness of your business to investors, lenders and funders
• The ability of the entrepreneur to negotiate well and of the team to execute the business plan convincingly-
Will determine the type, price and quality of the deal that can be achieved
Step 4: So remember –What’s important when seeking finance
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Recommended Slide-deck Ten slides. Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting—and business angels are very normal. If you must use more than ten slides to explain your business, you probably don’t have a business. The ten topics that an investors cares about are:
1. Summary and call to action/ what do you want?
2. Problem
3. Your solution
4. Business model
5. Underlying magic/technology
6. Marketing and sales
7. Competition
8. Team
9. Projections and milestones
10. Status and timeline
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The End
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