Capital Enterprise Presentation at Show Me the Money London 2015 #TMUMoney
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Financing a Tech Startup . . John Spindler CEO of Capital Enterprise 1 @capenterprise
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Transcript of Capital Enterprise Presentation at Show Me the Money London 2015 #TMUMoney
Financing a Tech Startup..
John Spindler CEO of Capital Enterprise
1@capenterprise
…to start you need..
@capenterprise 2
No 1 source of Finance…
@capenterprise 3
Your Money, the money you can borrow, your family and friends money…
Sound advice is…
Don’t Raise… …unless
• Can’t launch a product into market without external funds..
• Need to get big fast to compete.
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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.”- i.e. to win requires scale
Banjaree &Duflo- Poor Economics
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..only raise to SCALE..
… and the world is changing…
..So a Start-up in want of investment needs..
• Team, Tech & resources that is FIT for the task of creating an awesome company
• Product that is the best solution FIT for the target customers problems.
• Business Model that is FIT to be scaled.
• Smart Ass Team
• with a Kick Ass Product
• With a Business model that can “capture” a Big Ass Market
( Jeff Clavier 3 Ass-es rule)
+ Capital Efficient to create a repeatable and scalable business.
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Idea to Tech Business- Three Chasms.
Funding Product Development & BETA Testing
Grants & Awards General
• 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
• IC Tomorrow- https://connect.innovateuk.org/web/ictomorrow
• NESTA- http://www.nesta.org.uk/
• London European Enterprise Network- http://www.een-london.co.uk
• EU 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
• J4B- Portal for grant finding http://www.j4b.co.uk
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Are you Investment Ready?
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1Idea Stage
2 Commitment Stage- Secure Co-Founders
3FFF funding round –Build & Beta Test Minimum Viable Product
4Seed Investment Round (Angels + Early VC’s)- Prove Business model & acquire metrics to prove scalability
5Series A Round (Angels, VC’s & Strategic Investors) – Go for scale, build out team, technology-EXECUTE
6 Exit
(Average 7 years and after many rounds) – Trade Sale or IPO
££££££££££££££
How Start-Up Funding Works ?-Why 100% of Nothing is worth Less than 10% of something big
Investment Essentials
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Round Amount Purpose London Pre-Money
Valuation Guideline
Source of Investment What investors
like to see
Pre Seed £25K-£150K
(SEIS eligible)
Assemble Team/ Build & Test
MVP/ Proof of Concept R&D
Zero- £500K Own Money/ FFF/
Crowdfunding/ SEIS Funds/
TSB
Unfair Advantages
Seed £150-£350K BETA Test/ Launch into
Beachhead/ Proof of Product
Solution Fit
£500K-£1.5m Business Angels/
Crowdfunders/Seed VC's/
Co-Investment Funds
SMART Team- Early
Evidence of Product/
Solution Fit- Validating
customers/ users
Super Seed
(Bridging
round)
£500K- £1m Working Business
Model/Proof of Product/
Market Fit/ Demonstration of
Growth
£1.5M-£4m Super Angels/ Seed VC's Product Solution FIT
Proved- Early
Indications of Product-
Market Fit ( i.e.
revenues)
Series A £2m-£15M+ Scale £8m- £50m VC's/ Family offices and
Corporate Ventures
Revenues & METRICS
proving scalability.
@capenterprise
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 2013-14 tax year, tax payers can roll 50% of a chargeable gain in the tax year in to a
SEIS with a full capital gains tax exemption (another 14%)• 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 is…… “a game changer”?
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POC P/S Fit P/M Fit
SEIS LCIF VC
What stage is your business at?
FF
Investors tend to invest for transitions..
Send a slide deck and get introducedhttp://www.slideshare.net/slidesthatrock/how-to-pitch-a-vc-redesigned
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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
@capenterprise
Send to : [email protected]
7 Types of Early Stage Investors in London Market
1. Crowdfunders/ Platforms2. Tax Relieve Seeking SEIS/EIS Funds3. Government Backed ECF’s4. Traditional Angel Syndicates5. Super Angels6. VC’s 7. Strategic Investors ( Corporate Venture)
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Seed/ Early stage Investment Platforms
Crowdfunders.www.crowdcube.comwww.seedrs.comwww.crowdbnk.comhttps://www.crowd2fund.com
Angel Platforms- www.angel.co- www.syndicateroom.com
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“Pay to Play” Funds.
Top SEIS Funding Syndicates1. Jenson Solutions-
www.jensonsolutions.com2. Ingenious Media-
www.ingeniousmedia.co.uk3. Ascension Ventures-
http://www.ascensionmedia.com/ascension-ventures.php
4. Start-up Funding Club-http://www.startupfundingclub.com/
5. Ascot SEIS –www.ascotwm.com
Top Traditional Angel Syndicates
1. London Business Angels: http://www.lbangels.co.uk/
2. E100 (LBS)
3. Oxford Angels: http://www.oxei.co.uk
4. Cambridge: http://cambridgeangels.com
5. Envestors- www.envestors.co.uk
6. Angels Den- www.angelsden.com
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Super Seed Investors
• Playfair Capital- http://playfaircapital.com• Angel Lab- http://angellab.co.uk/• Firestartr- www.firestartr.com• Kima Ventures- http://www.kimaventures.com• Boundary Capital - www.boundarycapital.com• Venerex ( Fashion Tech- see Capital List) • Jam Jar Investments-
http://jamjarinvestments.com• No 1 Seed - www.number1seed.co.uk• Angel List Syndicates – www.angel.co
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Enterprise Capital Funds.
ECF’s
• Notion Capital – SAAS specialist- See portfolio here
• Passion Capital: Early Stage, see their portfolio here.
• Sussex Place Ventures- Early stage ( linked to LBS)
• Amadeus Capital: Early and mid-stage- just launched new fund.
• Episode1: Early Stage Software Companies
• Longwall – Oxford Based – Science backed Start-ups focus
• Dawn Capital - Fintech and SAAS
• IQ Capital – Seed and Series A
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Active Seed VC’s in London. Big 7
Accel Partners: Stage agnostic, see their portfolio here.
Balderton- Stage Agnostic- See there portfolio here
Index Ventures: Stage agnostic, see their portfolio here.
Wellington Partners: Stage Agnostic, see there portfolio here
Octopus Ventures: Early to mid-stage, see their portfolio here.
DN Capital : Early and mid-stage, see their portfolio here
DFJ Esprit: Early to mid-stage, see their portfolio here.
Cool Cats
• Profounders: Early and mid-stage, see their portfolio here.
• MMC Ventures - Series A Fund- Co-Investment fund with Mayor of London
• Piton Capital: Early and mid-stage specialize in market places.
• White Star Capital- Early stage – See portfolio here
• EC1 Capital: Early stage, see their portfolio here
• Connect Ventures- Early stage and very cool.
• Hoxton Ventures – New and focus on seed with next move to USA.
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Specialist FundsSocial/ Tech for Good
- NESTA - www.nesta.org.uk/investments
- Unltd – www.ubltd.org.uk
- 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
Women
- Stargate Capital- Trapezia- http://www.stargatecapital.co.uk/trapezia_1.aspx- FSE-- 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
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Who can Capitallist introduce a start-up to..
http://capitallist.co/our-investors
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