âStartup is an entrepreneurial team with innovative idea and target to grow fast with scalable business modelâ. Star
How to get your startup Funded ?
Building Successful Companies
Touko Kontro & Ari Seppänen Startup Advisors, Newco Helsinki
[email protected];
[email protected] 2
Before we get started on How to get Funded ? What is a startup ? “Startup is an entrepreneurial team with innovative idea and target to grow fast with scalable business model” Startup is a business in the form of a company, a partnership or temporary organization designed to search for a repeatable and scalable business model designed to grow fast in a big and/or fast growing market. – Steve Blank
Growth
Risk
Return / Reward
Investors don’t invest in ideas - Investors are looking for: Market Opportunity
Innovation / uniqueness
The Team will make it happen
About Fundability ”It is relatively easy to raise money for a company that is fundable. It is close to impossible to raise funding to a company that is considered a non-fundable one.” -Mika Marjalaakso, Tough Love Angel
Three things to make your startup fundable ØTeam ØProduct ØMarket fit 7 Picture: VisitHelsinki
The Team The Team should have enough skills and passion to execute everything planned and unplanned. Planning is 1%, execution is 99%
The Product Validate early with potential customers, start with a feature. Product shows the investor that the team can execute more than powerpoint slides.
The Market Fit There should be a market that is
Scalable, making hyper growth possible
Big enough total addressable market
Validated: customers are paying for your product
Crowded or not
Funding options in different stages Startup-grant (to entrepreneur) : http://www.teservices.fi/te/en/employers/for_e ntrepreneurs/services_new_entr epreneurs/startup_grant/index.ht ml Angel funding: http://etula.fi/pdfs/opas_enkelisij oituksen_hakemiseen.pdf TEMPO: https://www.businessfinland.fi/en /for-finnishcustomers/services/funding/start up/tempo-funding/ Finnvera loan: https://finnvera.fi/eng/Products/L oans SME Instrument I & II: https://ec.europa.eu/programme s/horizon2020/en/h2020section/sme-instrument
0-2 years
Angel funding SME Instrument I & II Bank loan guaranteed by Finnvera
Business Finland (former TEKES) a) Tempo b) R & D c) NYI
FORMATION
VALIDATION
GROWTH
Mission > Vision > Strategy
Lean Startup
Scale Up
● ●
Co-founder team formation What, to whom? & Why and how?
-2
Problem / Solution Fit
-1
Minimum Viable Product
0
Validate / Iterate (or pivot)
1
Vision / Founders Fit
Product / Market Fit
Pre-seed
Seed
1. Revenue from customers in all stages
1. Business Finland R&D
1. Angel rounds
2. Angel rounds
2. Business Finland R&D
2. Basic seed money from co-founders
3. Early stage funds
3. Early stage funds
3. Startup grant Tetoimisto
4. Horizon 2020 SME instrument Phase
4. Business Finland YIC
4. Tempo Business Finland
5. Equity/product Crowdfunding
5. Bank and Finnvera loans and guaranteees
6. Innovation voucher
Establish & Strengthen
2
3
Business Model / Market Fit
Start up
5. Equity/product crowdfunding
Startup Development Phases - From idea to business and team to organization. Version 3.0 - www.startupcommons.org
Venture Capital 1. Early VC 2. Seed Funds
3. Business Finland YIC 5. Loans from insititutions 6. EU Horizon 2020 SME instrument phase II 7. Early IPO (First North)
Business Finland (Tekes) Funding for start ups
How to get started with Business Finland (Tekes) https://www.businessfinland.fi/en/forfinnishcustomers/services/funding/startup/inbrief/
TEMPO - Test your concept Investigate the market www.tekes.fi/tempo
Investment study by Etula
THANK YOU ! https://newcohelsinki.fi/en/materialbank/ - Password: newcohelsinki - Get in touch -
[email protected]
19
Selection and valuation of target company based on ETULA model (Based on approximately 200 International studies) ØLevel of perfection of team 30-50% ØMarket opportunity 20-40% ØCompetitive advantage in market (10-20%) ØProduct/service and technology (30-40%) ØAttractiveness of investment (10-20%) ØCurrent situation achievements (0-20%) ØOwn added value for company (10-20%)
Level of perfection of team 30-50% ØWill ØKnow-how ØCourage ØRelationships ØMarketing spirit ØLearning ability ØRealiability Øheterogeneity
Market opportunity 20-40% ØMarket size ØTurnover potential in five yaers ØMarket niche ØCompetition situation ØMomentum
Competitive advantage in market (10-20%) ØIPR Protection ØTraceability of solution ØSales channels ØOperating model ØEarning model
Product/service and technology (30-40%) ØIdentified problem ØAdded value for customers ØScalability ØTechnology used
Attractiveness of investment (10-20%) ØImpact investment ØLeverage of financing ØFinancing need in future ØAdded value portfolio for other companies ØExit path
Current situation achievements (0-20%) ØMarketing ØSales ØProduct level of readiness ØAgreements ØCash
Own added value for company (10-20%) ØTime ØSweat equity ØNetwork equity ØPrivate equity
