Start up a business and change the world vs4

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Welcome “Start a Business And Change the world???”. www.capitalenterprise.org
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Opionio piece on starting a scalable business in the UK

Transcript of Start up a business and change the world vs4

Page 1: Start up a business and change the world vs4

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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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0 2 4 6 8 10 12 14 16

-20

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10

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50Start-up Growth Pathway

Investment

Inco

me

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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

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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

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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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Importance of FIT

Problem Solution

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“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

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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

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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

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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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• 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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