Sife Presentation

Sponsorship SeekingFUNDING THE CHANGE

Karim Amadebrightideas*

Business Financing

• INTRODUCTION• DO YOU NEED SPONSORSHIP?• PREPARATION• CONSIDERING THE OPTIONS• MISTAKES TO AVOID• PLACES TO START


Introduction


Introduction

• Capital is what keeps businesses moving.• But raising that capital is not always easy when

you are just starting out – and your business is just an idea.

• It is one of the great hurdles, especially in this economic climate.

• But don’t despair, where there’s a will, there’s a way.


Do you need sponsorship?


Do you need funding?

• Some business can start with little or no capital.• Before you try to get sponsorship, hang on to

your equity by bootstrapping.– Essentially this means to use your own resources.

• Use any savings you might have, money under the mattress.

• Consider using some of your existing assets as part of your business or to raise funds.


Preparation


Preparation

• Any sponsors will require information about your business.

• They will also require confidence in you– Your business should be an area you have

experience in or have very good knowledge of.– It is a good idea to do some research, to become

a real expert in your chosen field.– It will be significantly easier to obtain funding if

sponsors can trust you.


Preparation

• Business plan is key.• A business plan consists of a number of

elements.– What is your big idea?– What need does it address?– What is your business model?– What’s the difference?– How big is the market and are there competitors?– Who is on the team?– How much money will you need?– Where is the money going to come from?

• The most important of which is referred to as “the money story”– Once you know how much money you will need,

you can start examining your options.


Preparation

• A number of resources exist for the preparation of the business plan.– Do some online searches, there are scores of

templates online (ex: score.org)– Speak to some of your Faculty Members.– Consultancies such as BizStartup exist that can

help for a fee.– The DTI also provides support and a SME Toolkit

to upstart businesses.


The options


The options

• The 3 F’s– Friends, Family and... Fools.– Treat them like any other investor (have

agreements written etc).– VIP: Prospects must pass the Christmas Party

test.• Debt Financing

– Loan from a bank.– Can be hard without a track record.– Needs to be paid back

• Angel Investors– People with money who want to invest into small

upstarts.– In return for equity and often involvement in

running the business.


The options

• Venture capital– Only a small part of the market.– Look for businesses with established leadership.– Invest large amounts of money, but want even

more money back in a short time– 10x ROI– Unlikely but not impossible at this level.

• Government Grants– The DTI SMEDP provide grants and support to

companies in a number of sectors (such as tourism, water transport and others).


The options

CONCEPT FEASABILITY PROTOTYPING COMMERCIAL

3 F’s

Grants (ex: Gov)

Angel Investors

Banks

Venture Capital

Personal Funds

Sales


Mistakes to avoid


Mistakes to avoid

• The ‘three-killer-uns”– Being unprepared– Being unorganised– Being ‘unprecise’

• These are the main reasons businesses fail to raise the funds needed for a successful launch.

• Be confident, well prepared and take some chances – and soon you’ll be the next great South African entrepreneur.


Places to start


Places to start

• Business Partners South Africa– Information and funding

• Small Enterprise Development Agency– DTI support and information

• The Investment Network– A network for connecting Entrepreneurs with

Angel investors• Venture capital online

– Connects you with venture capitalists, also provide information and support.

• Banks– All major banks provide loans and business

financing.– Islamic Banks will provide interest free loans.


Event and project sponsorship

• PREPARATION• SCOUTING• HOMEWORK• PITCHING


Preparation


Preparation

• Similar to a business plan you need a project plan.

• Outline what your project or activity will be.– What is the benefit?– Who is the audience?– Why will the audience be interested/what is the

value?– What are your credentials as an organiser?– Who else will be on the organising team?– Who are the other (potential) sponsors?– What is the competition like?– What is the cost?

• A number of resources on how to prepare a project plan are available online.


Scouting


Scouting

• You will need to find a partner that is a good ‘fit’ with your project or event.

• Corporate websites will often provide information about the type of causes the company will usually sponsor and which activities they will shun.

• Usually companies will avoid:– Religious or politically related events or activities.– Blood sports (ex: boxing) or gambling (ex: poker

or horse racing)– Environmentally unfriendly activities– Once-off unsustainable activities– Activities or events engaging direct competitor

activity or other high-profile sponsors


Scouting

• The scope and size of the event will often determine the sponsor– Large initiatives will attract large national or

multinational sponsors.– Local initiatives are better served by seeking the

help of local enterprises in the region.• All sponsors are not created equal, but it is

important to treat them all with the same respect.– Very important, do not treat smaller sponsors

more informally, keep in place the same paperwork as you would with a giant corporation - it prevents problems.


Homework


Homework

• Select a list of targets that are good fits with the goals and objectives of the project or event.

• Next step is to research these targets and identify a number of important factors:– Who makes the decision.

• Is it the Marketing Department?• Is it the CSR Department?• Is it the owner/CEO?• Is it an individual or a group of persons?

– Will you be able to meet this person or persons face to face?

• This will determine if you can prepare a presentation.

– Has this organisation been involved in similar activities in the past?

• In which case you might have competition.


Pitching


Pitching

• You may be granted the opportunity to come speak to the decision makers and try to convince them.– Prepare a presentation – practice!– Have all the necessary information available.– Observe business etiquette.– Link the project objectives to those of the

company – why should they help you, what is in it for them?

– Apply the OODA loop• Observe, Orient, Decide, Act.

– Finally, ask for recommendations to other potential sponsor partners – these are more likely to succeed.

– If unsuccessful, always keep the door open – don’t burn the bridges.


Happily Ever After


Happily Ever After

• Success! You have a sponsor!• Some guidelines:

– Keep the sponsors involved in the running of the project or event.

– Keep them informed of any developments/change of plans.

– After the event, remember to say thanks (perhaps a gift of some sort, pictures.

– Keep the relationship alive even after the event, you might need their help again soon!


Happily Ever After


Resources

• Tuks Alumni sponsors many Tuks Projects.• Search company websites, if you find they have

sponsored events of your scope before, they’ll be willing to do it again.

• Alcohol re-distributers often sponsor University projects, if appropriate they are often a good source of sponsorships.

• Government departments will usually only sponsor large projects.

• The business world is all about networking, be sure to meet as many people as you can – attend events, fairs, seminars.– Friends or friends or relatives – fair game but

handle with care.


The END!


Sife Presentation

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