Download - Funding Your Venture for Website
Funding Your Venture
Frank MoyesLeeds School of Business
University of ColoradoBoulder, Colorado
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Goals for Tonight
Funding Financial Projections Cosmic Truths for Start-ups
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Types of FundingEquityDebtGrants
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Equity
Sell ownership in your companyAdvantage - permanent capitalLose control (dilution)Responsibilities to investor –
requires return
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Debt Loan for a set period & interest rate Source – banks, SBA, Guido No dilution Must pay back + interest Start-ups can’t get Vulnerable when things go south
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Grants Federal SBIR, CREDA Research – university
& corps. State, regional and
municipal development agencies
Foundations freemoney.com
No equity or debt Red tape and
strings Grant mentality
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Sources of Funding Friends & family Angels Venture capital Banks
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Friends & Family Get a good deal Maintain control Unsophisticated investors Different kind of obligation
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Angels Private investor early stage companies Value-added money - network, advice,
commitment Dilution No follow-on funds Over-control from angel
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Venture Capital Pool of capital invested in rapidly
growing companies Provide lots of money – multiple
rounds Greatest value-added money
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Disadvantages of Venture Capital
Want big opportunities > $100 million
Loss of equity, likely control Founder often “leaves”
Liquidity eventFund <0.5% of start-ups
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Best Source - Personal Resources Time to prove the concept, make mistakes Establishes value before go to investors Skin in the game – commitment Staying power Pressures on family
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Cosmic Truths for Start-Ups High Profit Margins Solve All
Problems Don’t Invest in Assets High Fixed Costs Are Bad Cash Is ?
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LIFEFrank Moyes
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What is Greatest Source of Cash?
Don’t’ Spend It
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