Start up a business and change the world vs4
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This document provides information about starting a business and growing it successfully. It introduces lean startup principles like the minimum viable product and business model canvas. It discusses the differences between self-employed and high-growth businesses and outlines a new startup model focused on customer discovery. Finally, it addresses common challenges like accessing funding and provides resources for entrepreneurs.
Start up a business and change the world vs4
- 1. Welcome “Start a Business And Change the world???”. www.capitalenterprise.org
- 2. 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 www.capitalenterprise.org 2
- 3. Start-up Growth Pathway 50 40 30 20 Income 10 0 0 2 4 6 8 10 12 14 16 -10 -20 Investment
- 4. Going Self-employed vs Starting a Growth Business Self Employed need Entrepreneurs need • To turn a pre-acquired • A team skill/know-how into a service • A large market opportunity. • Portfolio (Evidence) • A WOW • USP • Key Partners/ Early Evangelists. • Easy access to customers (i.e. • A solution/ offer customers will buy/use. contacts./ networks) • A “Market Validated Business • Self-Confidence Model” that is both • Basic business know-how repeatable, predictable and • Low volume/ high margin scalable. • Cashflow • Resources and Investment ££££ • ROC X 10 ? www.capitalenterprise.org 4
- 5. “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 www.capitalenterprise.org 5
- 6. 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” www.capitalenterprise.org
- 7. Traditional Start-Up Model Pre-Start Post- Start Valley of Death- See Get Idea Develop a Source Funding/ Launch if anyone will buy Validation business plan Resources Business my product. Have an Idea Get Set-Up Guidelines www.capitalenterprise.org
- 8. New Start-up Model Attempts to Premature Scale is the No 1 reason that ambitious business start-ups fail.- Source Start-up Genome. www.capitalenterprise.org See Steve Blank, Four Steps to the Epiphany
- 10. Importance of FIT Problem Solution 10
- 11. “In life a hypothesis that something is superior to something else cannot be scientifically proven but it can be demonstrated” Robert Hughes. RIP www.capitalenterprise.org
- 12. Part 5 Still Need Money www.capitalenterprise.org
- 13. 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…. 13
- 14. 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 www.capitalenterprise.org
- 15. Step 2- Match the funding need to purpose? www.capitalenterprise.org 15
- 16. 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 . www.capitalenterprise.org 16
- 17. Need less than £10K to start? Grant- www.j4b.co.uk No Funds New Enterprise Unemployed? Allowance Scheme Need Less than £10K to Launch a Self Fund business Community Development Write a simple Finance Institution Borrow Business Plan & 12 month cashflow Bank - 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/ www.capitalenterprise.org
- 18. You can’t a business loan from a bank because? 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 history 2. Failure rate in you business sector is high 3. You have no confirmed customer invoices- no evidence of sales = no evidence you can re-pay the loan 4. The business has no trading history – difficult to get a loan unless been trading for over 6 months 5. 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. www.capitalenterprise.org
- 19. Where do NGFC Figure 1. 4 Steps to developing a high growth business. ( Source HBR) members fit www.capitalenterprise.org 19
- 20. 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/ www.capitalenterprise.org 20
- 21. Funding the Runway Accelerators : Training & Mentoring programmes that provide fast-track to seed funding for Scalable 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/ www.capenterprise.org
- 22. Crowdfunders Crowd 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 www.capitalenterprise.org 22
- 23. Business Angels Angel 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 London 1. London Business Angels: http://www.lbangels.co.uk 2. Oxford Early Investments- http://www.oxei.co.uk/about.php 3. Envestors- www.envestors.co.uk 4. Finance South East- www.thefsegroup.com 5. Angels Den- www.angelsden.com 6. 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.ht ml 9. #1 seed- www.number1seed.co.uk 10. Keiretsu Forum- http://www.keiretsuforum.com For an alternative list check out- http://www.designcity.co.uk/angelnews/edition_94.htm#article1
- 24. SEIS- Tax breaks to encourage investment in start-ups 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. www.capitalenterprise.org
- 25. Specialist Funds Women - 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
- 26. Early Stage VC’s & Supper Angels Accel Partners: Stage agnostic, 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. Anthemis Investment- Stage Agnostic, see their portfolio here • DFJ Esprit: Early to mid-stage, see their portfolio here. • Charlotte St: Early to Mid Stage, see there portfolio here Eden Ventures- Early- mid stage – see there portfolio here • Dawn Capital: Early to mid-stage, see their portfolio here. Index Ventures: Stage agnostic, see their portfolio here. • Doughty Hanson- Stage Agnostic, see portfolio here • Seraphim Capital – Early-mid stage see there Passion Capital: Early Stage, see their portfolio here. portfolio here. • Kernel Capital: Early stage, see their portfolio here. Delta Partners: Early to mid-stage, see their portfolio • Octopus Ventures: Early to mid-stage, see their portfolio here. here. • Hoxton Ventures ; Early stage with disruptive tech. Atomico: Stage agnostic, see their portfolio here. • EC1 Capital: Early stage, see their portfolio here • Connect Ventures- Early stage and very New. Profounders: Early and mid-stage, see their portfolio here. • Pen Tech Ventures- Early Stage to mid- See portfolio Here AIB Seed Capital Fund: Managed by two funds which Alternatively you can check out Crunch Base invest under-€250k and over-€250k, see their http://www.crunchbase.com/financial-organizations portfolio here.
- 27. Active London Angels… • http://bamlondon.blogs pot.co.uk/p/angels_16. html • https://angel.co/ 27
- 28. Step 4: So remember –What’s important when seeking finance • 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 www.capitalenterprise.org
- 29. 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 www.capitalenterprise.org
- 30. The End www.capitalenterprise.org #capenterprise www.capitalenterprise.org