wip yale entrepreneurial institute (yei) early stage capital yale
TRANSCRIPT
WIP
Yale Entrepreneurial Institute (YEI)Early Stage Capital
Yale
WIPCreating the Most Possibilities to Excel
Tech Boot Camp
Start Something
Venture Creation Program
Summer Fellowship Program (Accelerator)
YEI Innovation Fund
2
YEI is equipped to help students start scalable ventures by providing:
1. Funding2. Resources3. Mentors4. Space
WIP
3
~$2K
Growing the Pool of Funds
~$15K ~$100K
Academic Year Fellowship
Promising start-ups have more opportunities to secure funding
Fu
nn
el of
Sta
rt-u
ps
Tim
e
Student ventures are eligible for ~$120K in fundingStudent ventures are eligible for ~$120K in funding
YEI Innovation Fund
WIP
YEI Funding Success
Started in 2007 More than 70 companies accelerated 3 companies acquired $70M raised in outside funding 305+ jobs created YEI grads have gone onto
MassChallenge, Ycombinator, TechStars, etc.
WIP
5
Successful YEI Teams
Panorama Education
Aaron Feuer, Xan Tanner and David Carel
$4M Funding – Google Ventures, Zuckerburg, Yale
School systems engaged with students, parents and teachers participating in highly-focused, digital opinion surveys.
2012 YEI Summer Fellows
WIP
Successful YEI Teams
6
• Complex analytics for cloud computing• Founded in 2010 by Faculty Member and
SOMer• 35 Employees• Raised $17+ Million
Justin Borgman, SOM ’11, YEI ‘10Dr. Daniel Abadi, Computer Science
WIP
NSF, NIHAcademic
Academia
Small Business
Investors
Industry
Valley of Death
Re
sou
rces
Ava
ilab
le (
$)
Discovery Development Commercialization
Level of Technology Maturity
FromAngus Kingon
Funding Technology Innovation
SBIR AngelVenture Capital
Senior Debt
WIP
Venture Capital Threshold
Angel Capital ThresholdEconomicDevelopmentFunds Threshold
NSFSBIR/STTRThreshold
Technology Risk
Market Risk
People RiskFinance Risk
Friends,Family (and Fools)Threshold
What is your Enterprise Risk Profile?
Senior DebtThreshold
WIP
Bootstrap Techniques
What you have in your pocket!Pros+ Protection of Entrepreneur’s Equity+ No Outside Oversight+ Low Cycle Time and Transaction Costs+ Certain Consulting Activities May Augment Technology
Development
Cons- Self-Funding Brings High Level of Personal Exposure- Consulting May Dilute Core Development Activities- Licensing May Erode Downstream Revenue Potential - Equity-for-Service Trades Dilute Entrepreneur Ownership
WIP
Federal and State Funding
SBIR, STTR ($3B available annually) and other grants
Pros+ Non-Dilutive+ May Offer Federal Customer Entrée+ Potential Adjunct to Development Roadmap and Business Direction+ Clear Milestone Expectations+ Validating of Technology Direction
Cons- Government Funding Sources May Bring Less Business Expertise Than
Equity Investors - If Grants Define and Drive Development Roadmap and Business Direction,
Cancellation of Requirement Could Leave Business Without a Customer- Generally Insufficient to Bridge “Valley of Death”- May Not Be Anchored to End-User Requirements- Not All States Offer Incentives
WIP
11
BioHaven Event (November)
Office Hours – – Dec. 4, 11 – Merrie London from CT Innovations
SBIR “How To” – February 11-12
*** Additional Resources Available
Yale Support for SBIR/STTR
WIP
Angel Investment
>2M individuals w/ Net Worth > $1M “Qualified Investors”
May have investment motivations beyond Rate of Return (ROR)
Various structures – Angel funds, Individuals, Super Angels
Pros+ May be Active Advisors+ May Assist in Business-Building Activities + Less Structured Monitoring and Control than Venture Capital+ Shorter Due Diligence Cycle than Venture Capital+ Relatively Loose Terms and Conditions+ Option Pool Likely not Required+ May be Widely Accessible
Cons- May be Active Advisors- Valuation Sensitive- High Expected Rate of Return (ROR)- Limited Ability to Support Follow-On- Availability / Access Subject to Macroeconomic Climate
** TERMS VERY IMPORTANT TO POSITION COMPANY FOR DOWNSTREAM CAPITAL**
WIP
Venture Capital
Private Equity Class Focused on Funding and Building Early Stage, High-Growth Enterprises
Pros+ Investment Validates Business Plan+ Adds Significant Value to Business+ Ability to Significantly Assist in Business-Building Activities+ Well-Structured Terms and Conditions Designed to Balance Management and Investor
Objectives+ Assistive in Finding Follow-On Financing
Cons- Extensive Due Diligence Cycle- Heavy Company Monitoring and Control- High ROR Expected- Moderately – Highly Dilutive- Expectation of Preferred Stock- Option Pool Required
WIP
Strategic Partners
Any alliance between commercial entities that furthers business interests (Formal to informal)
– Financing– R&D– Marketing / Sales / Distribution
Pros
+ Able to Add Meaningful Business Value+ Able to Assist in Business Building Activities+ Source for Technology, Market, or Business Model Validation+ Numerous Industry contacts+ Investment from Partner May Be Relatively Valuation Insensitive+ Expect Lower ROI+ courtship by Prospective Acquirer
Cons- Restrictive Terms and Conditions- May Require Certain Preferences to the Business Partner- Can Sometimes Limit Attractiveness of Company for Future Investment
WIP
15
Panelists “Advice for Accessing Early Capital”
Kyp Sirinakis – Managing Partner, Rock Spring Ventures
Adrian Horotan – Principal, Elm Street Capital
WIP
Resources
National Venture Capital Association. Provides listings of venture capital firms and entrepreneur education. http://www.nvca.org.
Kauffman Foundation Entrepreneurship Resource Center. Education on the A to Zs of business, including venture capital. http://www.entrepreneurship.org.
National Associate of Seed and Venture Funds. Provides lists of state venture capital funds and other resources. http://www.nasvf.org.
Angel Capital Association. Provides lists of angel groups. http://www.angelcapitalassociation.org.
Small Business Administration (SBA). http://www.sba.gov
• Connecticut Innovations http://www.ctinnovations.com/
• CVG http://www.cvg.org/