Welcome

Start a Business And Change the world???.

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Agenda
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.

30

25

20

Production/Earnings

15

Scalability Lifestyle

10

0 0 -5 5 10 15 20 25

-10

Investment

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Going Self-employed vs Starting a Growth Business

Self Employed 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 margins Cashflow

Entrepreneurs need:
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 Post- Start

Get Idea Validation Have an Idea Get Set-Up Guidelines

Develop a business plan

Source Funding/ Resources

Launch Business

Valley of Death- See if anyone will buy my product.

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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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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?

Incredible Ignorance Dr Do nothing Mr Do it myself Superman ( Whats 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 FitCustomers 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

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:
Capital Enterprise Whats 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 .

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Need less than 10K to start?

Grantwww.j4b.co.uk No Funds Unemployed? Need Less than 10K to Launch a business Self Fund Community Development Finance Institution New Enterprise Allowance Scheme

Borrow

Write a simple Business Plan & 12 month cashflow

Bank

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 25s- 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 cant 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
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 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/

Translation/ Follow on research funds.

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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) www.indiegogo.com (USA) www.peoplefund.it www.sponsume.com www.pleasefund.us www.wefund.com www.pozible.com www.crowdfunder.co.uk Equity/ investment Crowd funding platforms: www.crowdcube.com www.seedrs.com

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Business Angels
Angel Investment - 100-500K Seed Investment 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:
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 Whats important when seeking finance 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 convincingly-

Will 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 meetingand business angels are very normal. If you must use more than ten slides to explain your business, you probably dont 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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