1. START UP FINANCE

2. LEARNING OBEJCTIVE Start up Introduction to start up Finance
Basic Financing patterns
Pitch Presentation
Modes of Financing for Start ups
Bootstrapping
Angel Investors
Venture Capital Funds
Start up India

3. Start up

4. START UP Are you ready ? It’s a big commitment
It needs Energy and Passion
It needs lots of time
It needs patience
It needs financial sources
It will need lot of friends and supporters
It will need mentor who can keep our person positive
Are you ready ?
To guys before we go ahead with financing, its worth to stop and think
are we ready

5. START UP
Objective
Product
Business

6. About our objective
Why are we doing business – what do we want to achieve
Money ?
Fame ?
Lifestyle ?
Change ?
How long are we ready to commit ?
What level of risk are we ready to take ?
Are we mentally and Physically prepared to deal with the stress of business
are we ready

7. Business and Product Can the idea be converted into a product
Ideas done sell – product does
Can the product be monetized
Does the society is in need of the Product / Service
How big can be the market
Do we have it us to build the system that needs to make this product.
What will be the level of competition
are we ready

9. START UP FINANCE
Startup financing means some initial infusion of money needed to turn an idea (by starting a business) into reality. While starting out, big lenders like banks etc. are not interested in a startup business. The reason is that when you are just starting out, you're not at the point yet where a traditional lender or investor would be interested in you. So that leaves one with the option of selling some assets, borrowing against one’s home, asking loved ones i.e. family and friends for loans etc. But, that involves a lot of risk, including the risk of bankruptcy and strained relationships with friends and family.
So, the pertinent question is how to keep loans from family and friends strictly businesslike. This is the hard part behind starting a business -- putting so much at risk. But doing so is essential. It's what sets entrepreneurs apart from people who collect regular salaries as employees.
A good way to get success in the field of entrepreneurship is to speed up initial operations as quickly as possible to get to the point where outside investors can see and feel the business venture, as well as understand that a person has taken some risk reaching it to that level.

10. Financing Personal Financing Personal Credit Lines Family and Friends
Micro Loans
Crowd Funding
Peer to Peer Lending
Vendor Financing
Purchase order Financing
Factoring Accounts Receivable

11. PITCH PRESENTATION
Pitch deck presentation is a short and brief presentation (not more than 20 minutes) to investors explaining about the prospects of the company and why they should invest into the startup business. So, pitch deck presentation is a brief presentation basically using PowerPoint to provide a quick overview of business plan and convincing the investors to put some money into the business. Pitch presentation can be made either during face to face meetings or online meetings with potential investors, customers, partners, and co-founders.

12. PITCH PRESENTATION

13. PITCH PRESENTATION Introduction Projections Team Competitions Problem
Business Model
Solution
Financing
Marketing / Sales

14. Financing For Start-ups
Venture Capital
Angel Investors
Boot Strapping

15. Bootstrapping DOING MORE WITH LESS
Technique for getting by on as few resources as possible and using other people’s resources whenever feasible
Bootstrapping tips:
Hire as few employees as possible
Lease or share everything
Use other people’s money

16. Yard Sale, Auction, On the Side Consulting
Bootstrapping
Modes of Finance
Factoring
Trade Credit
Leasing and Mortgage
Customer Credit
Yard Sale, Auction, On the Side Consulting

17. Exposure to Alternatives
Bootstrapping
Advantages of Bootstrapping
Bootstrapping
Control
Efficiency
Involvement
More time to Work
More profit to you
Exposure to Alternatives

18. Angel Investors
Angel investors invest in small startups or entrepreneurs.
Often, angel investors are among an entrepreneur's family and friends.
Invest money in seed, startup and early stage companies
Invest time in entrepreneurs and their companies
Business acumen
Mentoring and coaching
Serve on boards
Make business introductions

19. Angel Investors
They are successful and often retired entrepreneurs or highly successful company executive
They invest both – “Time and Money”
Time – Because they act as a mentor and guide the company at each and every stage
They use there contacts to get business going – like they get supplier and customers or various vendors.

20. Angel Investors Entrepreneur Money Time Mentor Deep Pockets
Serve on Boards
Entrepreneur
Not much for profits
Money
Deep Pockets
Time
Business Acumen
Mentor

21. Venture Capitalist Evolution
1970 – GOI set up a committee to tackle the issue of lack of funding to start ups
1988 – Controller of Capital Issue – Was very restrictive
1995 – Abolition of CCI – Foreign finance companies were allowed to invest in India
1996 – New set of guidelines were issued to counter the charge that it favoured foreign players and did not give any inventive to the domestic individuals
1997 – IT revolution got the venture capital of the hook – however dotcom bust left many crying and the surviving once started financing at much later stage – leaving risky see capital and start up financing to a few daring ones.

22. Venture Capitalist Definition
Venture Capital is “Equity support to Fund a new concept that involve a higher risk and at the same time, have a high growth and profit.
Venture Capital is “It broadly implies an investments of long term, equity finance in high risk projects with high rewards possibilities’’

23. Venture Capitalist Definition
Venture Capital is “Equity support to Fund a new concept that involve a higher risk and at the same time, have a high growth and profit.
Venture Capital is “It broadly implies an investments of long term, equity finance in high risk projects with high rewards possibilities’’

24. Venture Capitalist Features Long Term Horizon Lack of Liquidity
High Risk
High Tech
Equity Participation
Participation in Management

25. Venture Capitalist Structure General Partners
Limited Partners (INVESTORS)
(Public pension Funds, Corporate Pension Funds, Insurance Companies, High Net worth Individuals, Foundations, Endowments, Sovereign wealth funds
VENTURE CAPITAL FUND
(TRUST / COMPANY / LIMITED LIABILITY)
Investments
Investments
Investments

26. Venture Capitalist Structure Offshore Structure Offshore Funds
Unified Structure
Domestic Funds
Structured

27. Venture Capitalist Advantages Long Term Equity Finance
Business Partners – shares the risk and the reward
Advice and assistance
Contacts
Additional funding – to scale up the operations
IPO’s
Trade sale

28. Venture Capitalist Advantages Financial Stage Period (Funds locked in
Financial Stage
Period (Funds locked in
years)
Risk Perception
Activity to be financed
Seed Money
7-10
Extreme
For supporting a concept or idea or R&D for product development
Start Up
5-9
Very High
Initializing prototypes operations or developing
1st Stage
3-7
High
Start commercials marketing production and
2nd Stage
3-5
Sufficiently high
Expand market and growing working capital need
3rd Stage
1-3
Medium
Market expansion, acquisition & product development for profit making company
4th stage
Low
Facilitating public issue

29. Venture Capitalist Advantages Deal Origination Screening Due Diligence
Deal Structuring
Post investment Activity
Exit Plan

30. Start up - India
Startup India scheme was initiated by the Government of India on 16th of January, The definition of startup was provided which is applicable only in case of Government Schemes.
Startup means an entity, incorporated or registered in India:
Not prior to five years,
With annual turnover not exceeding Rs 25 crore in any preceding financial year, and
Working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.

31. Start up
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