Ryla Rotary Cyprus; Raising Funds to Start a Business

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Demetris C. Hadjisofocli. This presentation was presented at a Cyprus Rotary Club to inform the members on the various issues on how to setup a business venture. A definition of systemic entrepreneurship, a termed and a process that I developed and coined and use the last 2 years, was given out.

Transcript of Ryla Rotary Cyprus; Raising Funds to Start a Business

  • 1. RYLA-Cyprus Rotary District 2452Unleashing The Power of . ALL TogetherRaising FundsDemetris C. HadjisofocliManaging Director, Helix Business Incubator, Ltd.Managing Director, Entrepreneurship Frontier Network, Ltd.Director, Liaison Office University of NicosiaCoordinated Induction of Entrepreneurship Education in SchoolsMarch 22, 2014

2. Entrepreneurship & Car ParadigmCommon: Wheel, Tires, Body, Engine 3. Definition - Systemic Entrepreneurship______________________________________ Systemic Entrepreneurship is a holistic approach toentrepreneurship execution were the stakeholder environment allowsthe user to use general frameworks and principles in a modular wayduring the development of business leaders, business models,monetization strategies and while the corporate strategic objectivesare met, to ensure that the end target of Economic, Political, Social,Legal, Environmental equality across the societal graph is reached. 4. Definition - Social Entrepreneurship__________________________________ Social entrepreneurship is the process of pursuing suitable solutions to socialproblems. More specifically, social entrepreneurs adopt a mission to create andsustain social value. They pursue opportunities to serve this mission, whilecontinuously adapting and learning. Possible Social Problems Unemployment among youth Poverty Civil Unrest Recession Closure of large number of SMEs Productive Entrepreneurship 5. Entrepreneurship_______________________________ Entrepreneurship is an agent of creative distraction Individuals NOT Corporations are the driving force Small agile companies as opposed to traditionally large companies Knowledge intensive Needs Policy shifts 6. What is the contribution to systemicsocietal development_________________________________ Entrepreneurship focuses Solely on economic growth Blind focus on straight forward monetization contributes to scorch earth businessmodels, business strategies, business systems How does society as a whole contributes to the development of responsiblebusiness leaders Education Culture Values discussion Ethics (not just business ethics but ethics in general) 7. What do we need Entrepreneurship toaddress?______________________________________ How do we address the issue of social and financial equality? Society and quality of life should move forward in unison; not necessarily at thesame level but in unison The gap between social groups at worst should remain the same, but weshould strive to shrink it (capitalism needs free willing customers) Disparities, inequalities Entrepreneurship that brings economic justice, equality, environmental sustenance Economic, Political, Social, Legal, Cultural, Technological, Environmental Perspectivesocial, economic, political, religious considerations Correlation between Entrepreneurship and Development 8. Example of Systemic Entrepreneurship Developing agribusinesses in rural Africa, that strives to empower individuals andcommunities It operates in several African countries. Researchers have introduced a system of vegetable productionthat combines conventional farming with hydroponic technologies for healthy and high value cropcultivation In partnership with the Sun International hotel group, a vegetable production network hasbeen established, allowing local groups of farmers to produce vegetables for sale to tophotels serving the international tourism market This has led to the emergence of agri-entrepreneurs, and overall, the farmers benefiting earned income of$1million annually since 2006. Beneficiaries include vulnerable groups like homeless, the visually disabled,widows and orphans These are examples of the kind of systemic entrepreneurship that are needed. It takes asocial problem and utilizes knowledge transfer to come up with a solution that is notabout economic growth per se, but about human development 9. Funding - Due Diligence____________________________________ The process through which investments are decided Detailed, Broad, Deep Has some fixed elements Has some local elements Need expertise to perform It is important and critical to the success of an investor but itshould not delay the process Ideas will fail for sure; better chances are 2 in 50 10. Entrepreneurship Drive________________________________________ The ability to identify new ideas Passion, determination and the drive to try them outWillingness to listen and learn Have the character to know when it is time to pivot to abetter version 11. Team____________________________________ Not everyone can become an Entrepreneur but ALMOSTeveryone can be Enterprising ..Teams that have GREAT Technologists EngineersOperations Legal Individuals who are Agile and Flexible If someone is not an Entrepreneur but has those qualities, puta GREAT Entrepreneur on their team Know what the team does not know No Ego! 12. Position for Success____________________________________ KNOW A PITCHING EAR . Not all money is created (or given) equally Not all investment people have the same philosophy, psychology,interests, knowhow.. Not all cultures/ecosystems are the same A pitching angle Tech, Business Model, Operations, Monetization.ADJUST IT 13. Value Proposition_______________________________________ KNOW Numbers KNOW Markets WHAT is the Problem to be Solved WHAT is the Monetization of the Solution HAVE a TEAM 14. Tool Box Major Points____________________________________ To the point Business Plan; Executive Summary (short & sweet) Only the justified & confirmed Facts; no blah blah!!! Sustainable Competitive Advantage Know your business inside-out Know what you dont know Avoid Tunnel Vision Syndrome Confirm the viability of your idea Know and Respect your competition Think & Plan 2 steps ahead (market trends) Team with Chemistry & Know-How; Build a balanced team-gene pool Assess & know your cost Sales pipeline 15. Tool Box Use of Funds!___________________________________ Why do you need the money? How will the money be used? Legitimate reasons Grow Sales Product Development Marketing Recruiting Training Infrastructure 16. Tool Box Transparency___________________________________ What are the controls which guarantee legitimate use offunds? Established Audit processes Weekly/Monthly reports Knowledgeable/Functional Board of Directors 17. What is all about?____________________________________ How is a company established, expand or grow? Finding money (capital) at a reasonable cost to try make yourdreams a reality.Who: Business Incubators, Crowd Funding, Administration,Venture Capital, Equity Markets, Angel Investors, InvestmentBanks, Friends & Family. Cost: Equity, Interest 18. Angel Investors, Friends & Family_____________________________________ What is it? Where entrepreneurs and start ups usually go to get money for an ideaor proof of concept. Type of Financing Seed & Mezzanine Cost? Give away a piece of the company to investors. Around 20% of your idea. Examples Wealthy individuals, The Morino Institute, Corporate Investments 19. Crowd Funding_____________________________________ What is it? It is a public forum where Entrepreneurs go to get money for an idea or proofof concept Type of Financing Startup, Seed Cost? Give away various incentives i.e. first products, lower price, incentives Around 5% fee to the site Examples Gofundme, kickstarter, indiegogo 20. Local Government and EU Level Funding______________________________________ What is it? Local Government/European Commission agencies make funding available throughvarious schemes Type of Financing Project specific Cost? Administrative Investment Low Interest rates Examples Jeremie program loans, Partnership Alliances, SME Instrument 21. Business Incubators_____________________________________ What is it? Where entrepreneurs, and start ups usually go to get money to develop & executea business plan at the early stages Type of Financing Start up Cost? Equity position in the company! Give away a piece of the company to the peoplewith the money. Relatively ok cost! No more than 20% equity position Examples Helix Business Incubator , Diogenes et al 22. Venture Capital____________________________________ What is it? Where entrepreneurs, and startups usually go to get money to execute a businessplan at a later stageafter prototype, prove of concept stage Type of Financing Round A, B, C, D , Bridge Cost? Equity position in the company! Give away a piece of the company to the people with the money. Very expensive! Examples Columbia Capital, Kleiner Perkins, The Raja Group etc 23. Equity Markets_____________________________________ What is it? Where established companies go to get money for extraordinary growthplanning. Type of Financing Stock markets Cost? Give away a piece of the company to investors. Market defines price. Examples DowJones, NASDAQ, FUTSE etc. 24. Investment Banks_____________________________________ What is it? Where established companies go to get money for extraordinary growthplanning, or to address critical cash/liquidity issues Type of Financing Bridge, Loan, Growth Cost? Give away a piece of the company to investors or Loan type Terms. Need and Market defines price. Examples Most large banks and other financial institutions 25. Final Caution!____________________________________Until the Money is in the Bank, in an account youcontrol, the deal is not done!