GMBF Start-up strategy Budgeting and raising finance July 2012

© Copyright SALVUS  “ Why” rather than “how”  Forces you to think about all aspects  Brings organizational discipline critical in early stages  Essential for equity financing  Foundation for subsequent bank financing Budgeting & Business Planning

© Copyright SALVUS  Like planning a journey: where do you want to go? How best can you reach there?  What does our business stand for?  What are the serious challenges facing us and how do we respond to these?  How will we stay different from competition?  Do we have what it takes to get to our destination – what exactly do we need and when?  How will the plan be financed? but……… Business planning: a thought process

© Copyright SALVUS Business Planning: some pointers  Must address the short term (operating plan) and the medium term (growth plan)  Long term, strategic plan may not be not too meaningful for start-ups, but required for equity raising  Plans are meant to be flexible and proactive  Alignment with personal objectives  Are numbers are derived from plans or vice versa?

© Copyright SALVUS Bootstrapping for start-ups A different perspective on budgeting  Keep it lean and mean -- low-cost passionate staff, innovative compensation -- “use” technology  Minimize capital -- only to cover expenses -- retain control -- brings efficiency and economy culture  Get the cash flowing -- get the product out, even at break-even -- reduce liquidity pressures

© Copyright SALVUS Financing start-ups: Debt  Bank finance is almost impossible, universally  More so in this region  Private financing available, but short term and very expensive  Market for convertible/hybrid financing virtually non- existent  Friends and family often relied upon Prepare for bank debt from Day 1

© Copyright SALVUS Financing start-ups: Equity  Equity is the more common financing method. Typical equity financing stages are : Personal savings Friends and family Angel investors Venture capital Private equity funds