The Purpose of this Presentation

What we’ll cover

1.  Why one person cannot build a company

2.  How do you know if you should seek funding?

3.  From where should you seek funding?

4.  How much funding should you seek?

Entrepreneurs Need Time

To concentrate on: » Their Business » Their Customers » Their Employees » Their Sales » Their Expansion

And They Need Time

To be human

14.7.2011

Unfortunately

We cannot do everything on our own

Why?

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And the entrepreneurs that try to do everything on their

own…  Are bound to fail

Advice: Network

 Be networked and Get help!

Advice: Outsource

 Outsourcing mandatory tasks like your bookkeeping will spare you a lot of time

 You should only concentrate on the things that will make your company successfull

Advice: Plan your Cash-flow

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WHY DO YOU NEED TO PLAN YOUR CASH-FLOW?

Because you will have bills to pay

+ And you will often have to pay them

before you receive money for your sales.

=

A CASH-FLOW PLAN CAN SAVE YOU FROM GOING BANKRUPT

And a good cash-flow plan

1.  Will tell you if you need funding and how much

2.  Is demanded by all potential investors in your company

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Should You Bootstrap or Get Funded?

Option 1: Bootstrap

 “The art of creating a company without funding”

 Entrepreneurs that bootstrap their way to success will have to pay all of the company’s expenses, and will have to keep a tight cost

control

How do you bootstrap a startup?

 Concentrate on Cash Flow –  Start selling from day 1. Create a liquidity plan!

 Make your customers fund your R&D  Ask yourself, If you had to launch your product next

week, what are the features that it absolutely has to have? –  Then get to work and forget the rest!!!

 Recruit slowly  Minimize your costs

Time to market is critical, especially when bootstrapping

”If you’re not embarrassed when you ship your first version

you waited too long..”

Matt Mullenweg, CEO & Cofounder of Wordpress

Option 2: Get Funded

 What you will need: –  A Strategy –  A Business Plan

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 From who? –  Business Angels –  Government –  VC, Private Equity

–  For funding opportunities in Finland check www.rahoituskone.fi

Getting funded will not only bring you money

  It is also a very good way to transfer the knowledge of the investor to you

 Business Angels and Venture Capitalists are often smart people who can give you good advice –  And they usually spread the word of your company to

their personal networks

Pro’s and Con’s

 Bootstrap –  You can decide

everything on your own –  You bare the risk –  Less administrative work –  Harder to grow

 Get Funded –  You share the risk –  More administrative

work –  Less distractions (you

can outsource) –  Easier to grow –  The investors are likely

to act as mentors for your company

–  Fast to market –  You can get fired!

What is the difference between VC and Angel funding?

 Business Angels –  Invest their own money –  Typical investment:

10k-1m –  Prefer to invest early in

the seed-stage –  Invest their passion

 Venture Capital Firms –  Invest someone elses

money –  Typical investment: over

1m –  Prefer to invest in

established companies that seek exponential growth

If you realize that you must raise capital

 Raise enough capital so that you can survive for the next 18-24 months

 Start to raise capital ahead of time – normal funding rounds will take you 4-5

months

And please have a look at all of your options before choosing one..

The best investors

 Have either founded or managed companies before

 Have some of their own money in play

 Can see the problem and are excited about your solution!

I hope..

And remember to Enjoy the Ride!

 Get Help before it is too late..

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And Please

 Get Help before it is too late..

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You cannot do everything on your own!

 You must seek help: – There are 18 accounting and financial

professionals working at Greenstep and they would all love to help your company become successful

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Br, Fredrik Teir

 Marketing Director of Greenstep & Chief Editor of rahoituskone.fi

+358 440 16 1288 fredrik.teir@greenstep.fi

@rahoituskone