13 March 2012 (PG03-07)
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Peter Le Voir
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Starting a Business
Funding for a Startup
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What type of business?
Self employed
Own business
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Founder of 7 businesses:
Pet Superstore
Contracting business
Chairman of Desserts company
Founder of Corporate Finance Startups
Patent Startup - particularly Telecoms
Working with Service companies
Housebuilder
Advisor to Kings College Business club
Exhibitions Business
CGT can be lower than income tax
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Worthwhile building a business, if you have a business partners.
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Video streaming with mobile phones business - started from early age.
Office in Silicon Valley, Office in London, first had office in Elephant and Castle.
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Having a scalable is easier to grow.
Than just having services.
Software scales well.
Brand can scale.
Can have large consultancies. - but they can take a long time to grow.
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Own business - responsible for raising capital.
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Talk about how you plan to fund it
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Sources of Money
Self
Self Funding
Bank
Friends/Family
Angels - take a business plan to them.
Institution
- business where people pay in advance is better.
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would rather voice is not online, in recording.
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Bank wants a personal guarantee - taking greater financial exposure.
- say no.
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At Rocket, initial equity money put in.
Person who owns the shares, owns the business.
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Structure of Business
Self employed, Partnership or Company
Main difference is Liability, Company has limited liability, person is not liable.
Maximise the upside, minimise the downside.
Capital Structure
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Wants Income and Shares, but doesnt want to personal guarantees
Factors
Business Plan
Product/Service
Market
Financial
Operations
Management
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People should mitigate the risks
If people fail in business, they should not come up with excuses.
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Financial - work out what sales
gross margin
break even
profit/loss
cashflow
Can make a profit and still run out of cash.
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People don't like backing businesses if there is only one person involved, prefer a group.
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Management Structure - very important
can fall out with partners...
Respective roles
Time Span - very important
Shared Values
important to have separate spheres of responsibility.
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Complementary skills are important
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Important to both have understanding of the timeline,
One wants to realise shares and move on.
Shared values are important - trustworthy and honesty
Shared values can contradict with complementary skills - a balancing act.
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High margin - software is high margin, to download the disk, 40% for microsoft.
food is low margin, distribution costs, 30p made on every sale.
High margin, cash generative is ideal
- ITE, JK Rowling.
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Still need to fund income during start up period: Self fund, do not release too much equity for this
Use of clubs, networking, social media, incubators to accelerate learning process.
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Need to do lots of networking, to get the contacts.
- put yourself out there.
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In Group work out a summary of how we will fund the startup
- each group explains how they are going to fund the startup
Sources of Money
Self
Self Funding
Bank
Friends/Family
Angels - take a business plan to them.
Institution
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FUNDING CONCEPT
Chinese Language Learning Tool
Picture based Game
Possible stakeholders - have a workshop
- Institutions
TSB - allocated money to UK businesses, biggest pot
Can fund the research
type of funding, grants, may only want to see outcomes.
Scenarios - IP rights.
ideas
similar to record
IP creation, licensing to external distributors/partners
IMPORTANT: Mix of percentage profits for each type of partner
partners, brought in to funding, dont need to give money.
IDEAS COMPANY (80%)
DEV COMPANY (20% share?) - outsource?
WEBSITE owned company X (%)
AMAZON sells product (%)
R&D stage
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3 Minutes
Looking for validation of the market.
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Distribution is important
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European IT challenge - 12pm
Will Pearson - Director of Technology
Degree show - Paris, four people taking part in opening a show
Work with groups of designers
13-16 June - Urban planning project/Installation design
4 days
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Define the market...
Positioning is important
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Group planning: - Afternoon
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Outline business plan
Presentation
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emails: antonioponamaia@gmail.com
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