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Howmuch to raise:Whe n,Why andHow

VijayAnand |TheStartu pCentre

Disclaimer
Youcannotplanentrepreneurship.Buttherearede=initelybest practiceswhenbuildinganenterprise.Adoptwhatseemstowork forothers,toyourownscenario.

VijayAnand|TheStartupCentre

BacktotheBasics

VijayAnand|TheStartupCentre

WhatisTech Entrepreneurship?
AnapproachtoManagementthatstartswith Opportunity

Technology/ Opportunity

Entrepreneurship

Value

VijayAnand|TheStartupCentre

Entrepreneurship: ThePursuitofOpportunity beyondtheresourcesyou currentlycontrol

VijayAnand|TheStartupCentre

TheEntrepreneursTask: MobilizePeople,Technology andMoney


People

Money

Technology
VijayAnand|TheStartupCentre

StagesofaVenture
Pure Entrepreneurship
Assumptiondriven BornoutofanInsight Prototype

EarlyStage
ValueProposition Solidi=ied BetaCustomersList? Productv0.1? StrategicFocus Knowswhatbusiness wearein

Emerging Company
ProductLaunched RevenueTrickling SignsofaModel Feedbacklook established Knowswhatbusiness weareNOTin SystemsBuilding

GrowthStage
WellDe=inedProduct TimetoPivotto enlargeUserbase TweakRevenuefunnel OptimizeConversion costs Makethedollargo furtherbranding HiringOutsiders

VijayAnand|TheStartupCentre

VisioningtheFutureintothe Present
ThePitch

VijayAnand|TheStartupCentre

Cash=lowScenario

VijayAnand|TheStartupCentre

WhyFundinSteps?
SeriesC SeriesB SeriesA (Mezanine) Seed Angel

VijayAnand|TheStartupCentre

ValueCreation Case:Manufacturing/Pharma
Market Introduction Regulatory Approvals Manufacturing Prototype Working Prototype Patents? Conceptand Feasibility

VijayAnand|TheStartupCentre

+MarketValue Case:Manufacturing/Pharma
Satis=ied Customers MarketLaunch BetaTest Technical Reports Published Backlog

Concept Testing Market Analysis PublishedData Qualitative Research

VijayAnand|TheStartupCentre

+ManagementValue Case:Manufacturing/Pharma
CFO Manufacturing VP President Technologist MarketingVP Controller SalesManager Human Resources Manager

VijayAnand|TheStartupCentre

AStartupisalean organizationridingona wholelotofassumptions, provingitshypothesisone stepatatime.


VijayAnand|TheStartupCentre

TechnologyxPeoplexMoney xConcept=ValueCreation
FirstEquation

VijayAnand|TheStartupCentre

OpportunityScreening Framework
HighPotential Market Harvest Competitive Management Current,Musthave Need Near,HighMargins HighBarriers LowPotential Weak.Needstobe developed Far,LowMargins SeverePricing Pressure

Complete,Strong(with InappropriateNeeds experienceinsimilar tobeproven =ield) None Oneormore

FatalFlaws

Timmons,NewVentureCreation

KindsofCapital

Loan(Debt)

Equity

Convertible(Hybrid)

LoveMoney
CapitalfromFriendsandFamily.NoreturnGuarantee

Ownpersonalmoney.

TheWrongCapitalatthe wrongstage,canprovetobe veryexpensive.

VijayAnand|TheStartupCentre

Investortermsheetsare designedtoreverse,andto grabcontrolifcompanygoes outofcontrol

VijayAnand|TheStartupCentre

WhatstheTrigger?
ItstheProjectionsmadeduringfundraising. Moststartups,nevermeettheprojectionstheybelievein.

VijayAnand|TheStartupCentre

Donotignorethe AssumptionsDashboard.
FirstSteponceyoumovefromPrototypetoProductwiththeaim ofbuildingastartup.

VijayAnand|TheStartupCentre

DoIneedabusinessplan?

VijayAnand|TheStartupCentre

Wherewillmy=irstroundof fundscomefrom?
AngelInvestmentpredominantlyhappensbecauseoftrustonthe entrepreneur,thantheplan.

VijayAnand|TheStartupCentre

AreyouLookingtoraise funds?
Howsureareyouaboutyourmodel? ExperimentwiththecheapestformofCapital Raiseaslittlecapitalrequired,withtheleastamountofequitythat youcanpartwith.

ThreeStepsofaVenture FundableCompany

EquityDilution

VijayAnand|TheStartupCentre

Vesting

VijayAnand|TheStartupCentre

TermSheets

VijayAnand|TheStartupCentre

Agoodvaluationcan sometimescometobiteyou back

VijayAnand|TheStartupCentre

HowmuchShouldIraise?

VijayAnand|TheStartupCentre

BetterQuestion: WhydoIneedmoney?
ToGofaster?ToProveanAssumption?Orjustbecause?

VijayAnand|TheStartupCentre

Discussions

ThankYou.