financing your startup
TRANSCRIPT
8/6/2019 Financing your Startup
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@leozebaEng. Civil, UFPE, 1997
Eng. Civil, UFPE, 2001 (mestrado)
CriptografiaeSegurançaEmRedes, UFF, 2007 (especial ização)
EZTIVA
Sócio-fundador , 2008
LOOPS
Sócio-fundador , 2009
Personal Democracy Forum, NYPremium Member , 2010
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Permite a criaçãoe amanifestação de apoio aprojetos de Lei deIniciativa Popular,utilizandoassinaturaldigital com
qualquercertificadoválidonaICP-Brasil. Visaeliminaroproblemadalogísticaassociadaàcoleta de
assinaturas, além depossibilitar averificaçãoprática dasmesmas.
eztiva.com/iniciativapopular
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Mashup do GoogleMaps,com oFlickre YouTube,quepermitiaaosusuáriosdarem a suavisãosobreoRio de Janeiro, durante acampanha de 2008
denunciandoproblemas,apontandosoluçõesoumesmoelogiandoações. Osusuáriospodiamvotarecomentaros posts dos
outroseocandidato secomprometia a,casoeleito,utilizaresterelatóriocomodiagnósticoinicialdacidade.
gabeira43.com.br
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É oagregador deconteúdo web 2.0 dospolíticos do Brasil.
Seu principalobjetivoéproporcionar um
ambienteonde apopulaçãopossainteragirdiretamente comospolíticosetambém seorganizar,
acompanhareexigirtransparênciaeéticadaclassepolítica.
eztiva.com/politweets
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Mobilização socialdacampanha a presidentede 2010 do PSDB.Principal fonte deinformaçãoetroca deconteúdoeexperiências
entreosMobilizadoresespalhadospelopaíse no mundo.
redemobiliza.com.br
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A startup is a
temporaryorganization designedtosearch for a scalable andrepeatable business model
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A business model describes
the value logic of an organizationin terms of how it creates andcaptures and delivers value
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Seed capitalSeed capitalis the initial capital used to start a
business. Seed capital often comes from the company founders· personal assets,from friends and family orangel investors.
AngelAngel
InvestorInvestor
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Tech Startup FinancingIs Changing
http://mashable.com/2011/04/12/tech-financing-changes/
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1.M
ost Capital RaisesHave Gotten Smaller
http://mashable.com/2011/04/12/tech-financing-changes/
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2.A
ngels Have GottenOrganized
http://mashable.com/2011/04/12/tech-financing-changes/
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3. Venture Capital Has
Gotten More ExpensiveCompared to the Risk
Exposure
http://mashable.com/2011/04/12/tech-financing-changes/
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4. There Are Far More
Financing AlternativesThan Existed Even
Five YearsA
go
http://mashable.com/2011/04/12/tech-financing-changes/
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http://www.avc.com/a_vc/2011/05/financing-options-for-startups.html
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http://www.avc.com/a_vc/2011/05/financing-options-for-startups.html
1) Friends and Family
it is easy to get a hearing from the people who knowyou best and they are positively inclined to say yes+they often cannot
come up with a lot of capital
you really don't want to lose moneythat friends and family have invested with you
20-25% discount.
10% Cap.
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http://www.avc.com/a_vc/2011/05/financing-options-for-startups.html
2) Contests/Prizes/Accelerator Programs
the biggest value comes from the mentoring and theopportunity to pitch to a large group of angel investors+excellent for teams that are just getting started and
that have not had a lot of startup experience
+money is sufficient to fund the founding team for thethree month program and often can last a bit longer
$ 20.000 - 30.000
5% - 6% equity
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http://www.avc.com/a_vc/2011/05/financing-options-for-startups.html
3) Government Grants
grants are usually "free money" in the sense that theydo not need to be paid back and they don't cost any equity+The application process is usually long, involved,
and distracting
grants come with strings attached; you can't move,you have to use it for a specific purpose
$ 20.000 - 60.0000
0% equity
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http://www.avc.com/a_vc/2011/05/financing-options-for-startups.html
4) Customer Financing
customer financing is typically non dilutive+building a product explicity for one customer often
makes it less applicable to the market as a whole
risk building a "fee for services culture" in yourcompany
$ convince
0% equity
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http://www.avc.com/a_vc/2011/05/financing-options-for-startups.html
6) Convertible Debt
dilute less if the company believes its equity will beworth more at a later date+transaction costs, mostly legal fees, are usually less
when issuing debt vs equity
+ sometimes there is compensation in the form of adiscount or a warrant, typically have some cap
$ ?
?% equity
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http://www.avc.com/a_vc/2011/05/financing-options-for-startups.html
7) Preferred Stock
is a class of stock that provides certain rights,privileges, and preferences to investorsif the value of the sale is below the valuation the
investors paid, then they will get their money back.
right to a board seat, information rights,right toparticipate in future rounds to protect their %, etc.
$ ?
?% equity
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Discover Customers(Steve Blank, SteveBlank.com)
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LEARN BUILD
MEASURE
IDEAS
CODE
DATA
Iterate: Learn, Measure, Build.(Eric Ries, StartupLessonsLearned.com)
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Startup Metrics for Pirates
� Acquisition:users come to site from various channels
� Activation: users enjoy 1st visit: "happy´ experience
� Retention: users come back, visit site multiple times� Referral:users like product enough to refer others
� Revenue: users conduct some monetization behavior
AARRR !
(note: If youre in a hurry, Google
Startup Metrics & watch 5m video)
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Example Conversion Metrics(note: *not* actuals your mileage may vary)
Stage Conversion Status Conv.%
Est. Value(*not* cost)
Acquisition Visitors -> Site/Widget/Landing Page
(2+ pages, 10+ sec, 1+ clicks = don¶t abandon)
60% $.05
Activation ³Happy´ 1st Visit; Usage/Signup
(clicks/time/pages, email/profile reg, feature usage)
15% $.25
Retention Users Come Back; Multiple Visits
(1-3x visits/mo; email/feed open rate / CTR)
5% $1
Referral Users Refer Others
(cust sat >=8; viral K factor > 1; )
1% $5
Revenue Users Pay / Generate $$$
(first txn, break-even, target profitability)
2% $50
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10 Slides to an Awesome Pitch
1. Elevator Pitch
2. The Problem
3. Your Solution4. Market Size
5. Business Model ($)
6. Proprietary Tech
7. Competition
8. Marketing Plan9. Team / Hires
10. Money / Milestones
DemoGoes Here
Teaser Image
Goes Here
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YES,Angels Fall from Sky!
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In BrazilIn Brazil
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In the rest of the WorldIn the rest of the World
VC Per Capita: Europe $7, US $72, Israel $142, Silicon Valley $ 1800
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Does it work???
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DON·T DO A STARTUP«YOU WILL FAIL
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Youve worked at Microsoft for >5 yrs.
You Drive a Nice Car.
You Live in a Big House.
You Dont Worry About Paying Bills.
You Want to Kiss The Kids Goodnight.
Your Spouse > Your Startup.
You Dont Know or Use Social Platforms (Facebook, Twitter, YouTube).Youve never built Facebook or iPhone App, or a Social Game.
Youve never sent an email campaign, written a blog post, or run
an affiliate marketing campaign.
DON·T DO A STARTUP«YOU WILL FAIL
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´If you·re not making mistakes you·re not trying.µ - WyntonMarsalis
fail fast and learn fast (ITERATE)
´Success is 99% Failure.µ - Soichiro Honda
´I failed my way to success.µ - Thomas Edison
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´The problem is that
we don·t understandthe problem.µPaul MacCready
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Value = Team* + Product + Traction
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LESSONS!!!
1. Avoid sexy tools.2. Ask smarter people.3. Throw away hard work.4. You don·t have all the answers.
5. You could be wrong.6. You could be right.7. It·s a relationship with the investors.8. They aren·t investing in your ideas.9. They are investing in you as a person.10. Hire slowly, fire fast.11. Build your products based on customer development.12. Build the minimal viable product (MVP).
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13. Choose your partners wisely.14. Seek excellent legal advice.15. Go with your gut.16. Get out of your house.
17. Always be prepared.18. Always remain determined.19. Read these books.`
LESSONS!!!
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DO IT!