Business & Innovation - PG03-07 (Cycle 2) Group: Chinese Language Learning Tool (13 March 2012)

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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