Welcome
“Start a Business And Change the
world???”.
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Agenda
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11:00 Welcome and Introductions
11:05: A new way to start a business – John Spindler
11-30: Turning an idea into a business- The Minimum Viable Product ExamplesRob Fitzpatrick
12.00 Business Canvas Model- ( Including Giff's exercise) – Rob Fitz-Patrick
13:00 Lunch
13:45 Lean Start-up Principles - Rob Fitz-Patrick
14:50 What Next? – Road-mapping your start-up - Tips.
15.00 Break
15-15 Still Need Money – How to fund a runway using alternative finance such as
crowd-funding, peer-to-peer lending, soft loans and seed investment – John
Spindler
16:00- Q&A
16:30 Networking and finish
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Start-up Growth pathways.
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25
Production/Earnings
20
15
Scalability
Lifestyle
10
5
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5
10
15
-5
-10
Investment
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20
25
Going Self-employed vs Starting a
Growth Business
Self Employed need :
Entrepreneurs need:
• To turn a pre-acquired
skill/know-how into a service
• Portfolio (Evidence)
• USP
• Easy access to customers (i.e.
contacts./ networks)
• Self-Confidence
• Basic business know-how
• Relatively high profit margin’s
• Cashflow
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A team
A large market opportunity.
A WOW
Key Partners/ Early Evangelists.
A solution/ offer customers will
buy/use.
• A “Market Validated Business
Model” that is both repeatable,
predictable and scalable.
• Profits
• Resources and Investment ££££
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“There is an opportunity gap when the scope
for growing income at a very fast rate is
limited for those who have too little to invest ,
but expands dramatically for those who can
invest a bit more.”
Banjaree &Duflo- Poor Economics
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Need a Business Model?
“A business model describes how your company
creates, delivers and captures value”
Or in English:
“A business model describes how your company
will make money”
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Traditional Start-Up Model
Pre-Start
Get Idea
Validation
Post- Start
Develop a
business plan
Source Funding/
Resources
Have an Idea
Get Set-Up
Guidelines
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Launch
Business
Valley of Death- See
if anyone will buy
my product.
New Start-up Model
Attempts to Premature Scale is the
No 1 reason that ambitious
business start-ups fail.- Source Start-up
Genome.
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See Steve Blank, Four Steps to the Epiphany
Whose the Customer?
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9
Do you know your customer?
The Problem
Solution?
• Do you know what their
problem is?
• How important is it to the
customer ?- £££
• Why is it not being solved?
• Why are present solutions
inadequate?
• Why now? – when does the
problem become in need of
a solution?
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Value Proposition- The hypothesis
• I intend to offer ( insert
product/ service) to a ( insert
name/type of customer) so
that they will be able to
(insert the benefit/value to the
customer).
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“In life a hypothesis that something
is superior to something else cannot
be scientifically proven but it can be
demonstrated”
Robert Hughes.
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The competition- your customers
perspective?
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Incredible Ignorance
Dr Do nothing
Mr Do it myself
Superman ( What’s
their kryptonite)
• Boy in costume
Who are you competing
against for your customers
attention?
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Minimum Viable Product-MVP
1. Hypothesis- “Product- Customer Fit”Customers will buy my product idea because…..?
2. Evidence- What can I do to disprove/ prove my hypothesis?
3. MVP- A product that will test the hypothesis with customers
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Whose your “first” customer
Customer- A person with a
problem you can solve?
Segment – A group of customers
that you can…
• Reach
• Convince to “test & trail”
your MVP
• Be you co-developers
• Be your Evangelizers - Lead
on to more custom/ new
customers.
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Customer Relations- Where there is
Love there is growth?
Love =
Growth
• Viral- Customers love you so they
get at least one other person to use/
buy i.e. Facebook, Spotify
• Customer Acquisition- You
pay £££ to market your product and
the profit from the customers you
gain is greater than the marketing
costs??? (N.B. Margins often need to be high)
• Stickiness- Customers “love” you
so they keeping coming back for
more e.g. Apple- MacDonalds.
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What is A Start-Up?
“a start-up is an organization formed to search
for a repeatable and scalable business model”
- Steve Blank- “4 Steps to an Epiphany”
“an organization dedicated to creating
something new under conditions of extreme
uncertainty”- Eric Reis- “Lean Start-up”
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Part 2
Business Canvas Model
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http://youtu.be/QoAOzMTLP5s?hd=1
www.be.foundercentric.com
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Part 3
Lean Start up Basics
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Part 5
Still Need Money
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Step1- Know the different types of
finance available
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Bootstrapping through Personal resources (time and money = sweat equity you are
investing)
FFF- Family Friends & Fools – People who will give you funds with little questions asked
including reward based crowd funders such as Peoplefundit.
Government Grants
Customers and Suppliers- “Build slowly at low risk by obtain credit from suppliers and
growing business through profits from paying customers”
Loan providers- “Increase business growth ambitions by increasing investment by
taking out debt”
– Banks ( Overdraft-unsecured and secured loans)
– Community Finance Institutions ( Soft/ unsecured loans for riskier ventures)
– Leasing Companies.
– Invoice lenders (Factoring, invoice discounting)
– New loan markets such as Market Invoice and Funding Circle.
Investors– Private Investors- Business Angels such as Angel Capital
– Venture Capitalist
– Crowdcube
– Government Backed Investment Funds
Matching the right mix of sources to the right stage and type of finance is the key to
successful fundraising
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Step 2- Match the funding need to purpose?
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24
Information:
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Capital Enterprise What’s On in London- www.capitalenterprise.org/whats-on
Business Link - www.businesslink.gov.uk
Start- up Britain - http://www.startupbritain.org
British Library- www.bl.uk/bipc
HMRC Small Company Enterprise Centre- Source of advice and help
http://www.hmrc.gov.uk/manuals/vcmmanual/VCM10050.htm
HMRC R& D Tax Credits www.ucl.ac.uk/advances/advances-news/hmrc
HMRC Guide & Support- http://capitalenterprise.org/guide-to-rd-tax-credits
British Business Angel Association: www.bbaa.org.uk
Guide to Early Stage Investment:
http://www.paloalto.co.uk/about_us/Early_Stage_Investment_by_Alan_Gleeson.pdf
Guide to 100 offers for start-ups – www.capitalenterprise.org
And if you have not checked them out please look at the latest schedule of advice and training events at :
www.ngfc.org.uk .
www.ngfc.org.uk
Need less than £10K to start?
Grantwww.j4b.co.uk
No Funds
Unemployed?
Need Less than
£10K to Launch a
business
New Enterprise
Allowance Scheme
Self Fund
Borrow
Write a simple
Business Plan & 12
month cashflow
Community
Development
Finance Institution
Bank
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Sources of Grants- www.j4b.co.uk
Competition funding £1000 issued to 10+ businesses per month- http://www.shell-livewire.org
Princes Trust http://www.princes-trust.org.uk/need_help/enterprise_programme.aspx
£3500 Enterprise Loans for Under 25’s- http://businessinyou.bis.gov.uk/start-up-loans/
http://www.facebook.com/freethebusinessinyou
New Enterprise Allowance Scheme – Check who delivers the scheme in London by e-mailing Capital Enterprise.
Community Development Finance Associations- http://www.cdfa.org.uk - Also check out North London Community Finance
ELSBC Access to Finance – Business Plan support for those looking to raise up to £10K
Soft loans for Creative Businesses- http://www.creativeindustryfinance.org.uk/
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You can’t a business loan from a bank because?
Banks only make a margin on loans of between 2-7% -so they can only afford very low default rates and
this means they will not lend to a business or entrepreneur that is deemed “risky”. And you are deemed
an unacceptable risk if:
1. You have a bad credit history
2. Failure rate in you business sector is high
3. You have no confirmed customer invoices- no evidence of sales = no evidence you can re-pay the
loan
4. The business has no trading history – difficult to get a loan unless been trading for over 6 months
5. You are unable to offer security to cover the bank if the business fails.
6. Your customers are overseas –so there is a risk they cannot be legally forced to pay for goods
ordered.
7. What you want to do with the borrowed money is widely regarded as having a poor success rate
e.g. Research and developing a new product and especially marketing.
Banks like RBS are the best source of relatively cheap loans for trading
businesses.
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Where do NGFC
members fit
Figure 1. 4 Steps to developing a high
growth business. ( Source HBR)
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Funding Product Development: Tech
Grants & Awards General
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J4B- Portal for grant finding http://www.j4b.co.uk
Technology Strategy Board ( R&D Funding) - http://www.innovateuk.org http://www.innovateuk.org/content/competition/grant-for-rd-single-business.ashx
Knowledge Transfer Networks- www.innovateuk.org
London European Enterprise Network- http://www.een-london.co.uk
E Funding for SME R&D - http://www.eurostars-eureka.eu/what.do
EU Funding for R&D collaborations: http://ec.europa.eu/research/participants/portal/page/calls
Knowledge Transfer Partnerships funding support- http://www.ktponline.org.uk/ktp-what-will-it-costmy-business
Translation/ Follow on research funds.
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www.rdfunding.org.uk/bulletin/queries/Search.asp?TheCloseMonth=July&TheYear=2011.
http://www.rcuk.ac.uk/kei/ktportal/Pages/Followon.aspx
https://ktn.innovateuk.org/web/145175/overview
http://www.ahrc.ac.uk/FundingOpportunities/Pages/BrowseOpportunitiesOld.aspx
http://www.ahrc.ac.uk/Pages/default.aspx
http://www.theculturecapitalexchange.co.uk/
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Funding the Runway
Accelerators : Training & Mentoring programmes that provide fast-track to seed funding for
Scalable new businesses
• Lean Camp : http://leanca.mp - http://be.foundercentric.com/
• Start-Up Weekend: http://london.startupweekend.org
• Launch 48: http://launch48.com
• Tech Hub : http://www.techhub.com – Google Campus- http://www.campuslondon.com/
• The Business Bootcamps- www.thebusinessbootcamp.org
• Y-combinator- http://ycombinator.com/
• Tech Stars- http://www.techstars.com/
• Seed Camp: http://www.seedcamp.com
• Springboard- http://springboard.com/ - http://www.f6s.com/profile/1961#programs/ajax-application
• Student Start-ups- http://studentupstarts.com
• Accelerator Academy- http://acceleratoracademy.com
• Wayra- http://wayra.org/en/wayra
• Euclid Opportunities- ( Fin Tech Only) http://euclidopportunities.com/
• Innovation Warehouse- http://www.theiw.org
• Hubventurelabs - http://hubwestminster.net/hubventurelabs
• Dreamstake- http://www.dreamstake.net/
• Green Accelerator- http://bertiinvestments.com/berti-green-accelerator/
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Crowdfunders
Crowd funding PlatformsReward based Crowdfunding platforms- will help you to raise funding to build a proto-type and market test a
great idea or product.•
www.kickstarter.com (USA)
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www.indiegogo.com (USA)
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www.peoplefund.it
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www.sponsume.com
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www.pleasefund.us
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www.wefund.com
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www.pozible.com
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www.crowdfunder.co.uk
Equity/ investment Crowd funding platforms:
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www.crowdcube.com
www.seedrs.com
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Business Angels
Angel Investment - £100-500K Seed Investment
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NESTA - www.nesta.org.uk/investments
British Business Angel Association- www.bbaa.org.uk
Capital 4 Enterprise- http://www.capitalforenterprise.gov.uk/portfolio
Angel Co-Fund- http://www.angelcofund.co.uk/
Capital Enterprise top 10 Angels in London
1. London Business Angels: http://www.lbangels.co.uk
2. Oxford Early Investments- http://www.oxei.co.uk/about.php
3. Envestors- www.envestors.co.uk
4. Finance South East- www.thefsegroup.com
5. Angels Den- www.angelsden.com
6. Venture Director- www.venturedirector.com- www.boundarycapital.com
7. Start-up Funding Club- http://www.startupfundingclub.com/
8. E100- London Business School http://www.london.edu/facultyandresearch/subjectareas/strategyandentrepreneurship/enterprise100.ht
ml
9. #1 seed- www.number1seed.co.uk
10. Keiretsu Forum- http://www.keiretsuforum.com
For an alternative list check out- http://www.designcity.co.uk/angelnews/edition_94.htm#article1
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SEIS- Tax breaks to encourage investment in start-ups
Seed Enterprise Investment Scheme-SEIS is a tax break launched in April 2012 for UK
tax payers to encourage them to buy shares in start-up companies registered in the
UK
The Facts:
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SEIS investors can input £100,000 in a single tax year rising to a maximum £150,000 over two
or more tax years in to a single company
Investors cannot control the company receiving their capital
Investors pick up 50% tax relief in the tax year the investment is made, regardless of their
marginal rate.
In the 2012-13 tax year, tax payers can roll any chargeable gain in the tax year in to a SEIS
with a full capital gains tax exemption (another 28%)
The business must be a start-up company -registered in the UK within 2 years of claim.
The company must not employ more than 25 workers.
The company must have assets of less than £200,000.
The company has to trade in an approved sector – generally not in finance or investment, for
example, a property company raise capital as a SEIS.
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Step 4: So remember –What’s important
when seeking finance
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The quality and “connections” of the management team
The size of the business opportunity/ funding need
The scope for building a sustainable competitive advantage
The level of risk/ security.
And the timeliness of the proposal
Will determine the attractiveness of your business to investors,
lenders and funders
• The ability of the entrepreneur to negotiate well and of the team to
execute the business plan convincinglyWill determine the type, price and quality of the deal that can be achieved
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Recommended Slide-deck
Ten slides. Ten is the optimal number of slides in a PowerPoint
presentation because a normal human being cannot comprehend
more than ten concepts in a meeting—and business angels are very
normal. If you must use more than ten slides to explain your
business, you probably don’t have a business. The ten topics that an
investors cares about are:
1. Summary and call to action/ what do you want?
2. Problem
3. Your solution
4. Business model
5. Underlying magic/technology
6. Marketing and sales
7. Competition
8. Team
9. Projections and milestones
10.
Status and timeline
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Part 6
Q &A
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The End
www.capitalenterprise.org
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