Marketing bán hàng - Chương 8: Personal financing

Copyright 2015 Jack M. Kaplan & Anthony C. WarrenBootstrapping and Financing the Closely-held Company Patterns of Entrepreneurship Management5th Edition, Chapter 8 Part 1.Funding the Venture – Part 1Ch 8 Pt 1 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenFocused on early stage fundingPersonal, friends and familyAngel financing and early private equity Factoring and supplier financePresentation OutlineCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenSOURCES OF START-UP FUNDSCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceNote: does not add to 100% as there are overlapping sources.Copyright 2015 Jack M. Kaplan & Anthony C. WarrenUltrafast Milestones and Value CreationFunding Stages Should Match MilestonesCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenMore Suitable for the Early Stages (Covered in This Chapter)More Suitable for Later Stages(Covered in Chapter 10)Self-FundingSuper-angelsMoonlighting and ConsultingInstitutional Venture CapitalBootstrappingPrivate PlacementsFamily and Friends/AngelsCorporate DebtMicro-equity, Micro-loansStrategic PartnershipsPersonally Secured Bank LoansMezzanine FinanceFactoring and Supplier FinancingInitial Public OfferingsGovernment ProgramsComparison of Early Stage and Later Stage Sources of FinanceCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenThe Virtual CompanyThe internet enables a new venture to develop without significant overhead costsInternet video conferencing for meetingsProject management software such as BasecampOutsourced HR softwareLocating experts who can work as “pay-as-you-go” consultantsNo need for offices, etc. etc.Use of MVPUse of Crowd-sourcingSuch ventures can be much more efficient in the use of funds and therefore reducing the need for capitalIf a sale to an existing company is planned then only the ESSENTIAL assets need be created.Ch 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenPersonal FundingInvesting your own money – “sweat” equity for stockOffers greatest return, if successfulInvestors and venture capital sources usually require itYour personal funds can be treated as equity or debtCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenMoonlighting Founder still working a regular jobIncome used to support the entrepreneur during needed cash flowWhen the venture begins paying as well or better - entrepreneur leaves job Ch 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenBootstrappingA general term that refers to building value in a company without taking on outside investors or bank loansUsually overlooked as a source of resources by entrepreneursEffective bootstrapping allows founders to retain more of their ownershipOften the ONLY way to grow a companyThe entrepreneur becomes more efficient and cost conscious which is attractive to investorsCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenProtect your Investment – Document EVERY source of money and the terms.Specify in writing if it is a loan to the company, how the loan is payable, conversion rights or equity.Specify if the loan is payable in full upon the company receiving venture funding.Get into the habit of documenting all financial transactions from the start to avoid later problems.Personal FundingCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenSecond mortgage, credit cards or sell your car OR Get an investor to use a bank deposit or stock holdings as collateral for a loanUse of Personal AssetsCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenFriends And FamilyThe most popular source of funds for startup capitalFriends and family are not as worried about quick profits as professional investorsUsually they do not investigate the business and are not familiar with all the risksThe best advice is to provide the same full disclosure to a friend as you would a professional investorDocument the transactionCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenWell-off individuals with money to investGood prospects get fundedNeed good contacts found via networkingSeek local Angel Networks. Fees range from $150-$300Seek Angel Support Networks such a Ycombinator, DreamIt VenturesList on Angelsoft.comAngelsCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenAccredited InvestorsAn accredited investor is defined as having income in excess of $200,000 in each of the two most recent years or joint income of $300,000 ORIndividual net worth or joint worth exceeding $1,000,000Ch 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenCommon Stock - Purest form of equityNo fixed or guaranteed returnGreatest risk and greatest returnVoting stock versus non-voting stockPreferred StockGuaranteed dividendsRights are prior to common stock rights especially on sale or dissolution Equity InvestmentsCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenMicro-equity and Micro-loansCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceEarly stage funding and networking are offered by Micro-EquityGroups such as and These groups provide some financing, incubator support and mentoring to prepare entrepreneurs for later funding. They take a small equity position for this work.Micro-loans, which are well established for developing economies, are just gaining acceptance in the US. A number of lending networks can be found on the internet.Copyright 2015 Jack M. Kaplan & Anthony C. WarrenCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceFactoring and Supplier FinancingFACTORS provide credit to companies that are unable to access a conventional bank loan. Factors secure the loan against purchase orders received by the company. Customers pay the factor directly, who deducts high interest and fees sending the remaining amount to the company. SUPPLIERS may delay invoicing or receiving payment from a small company in order to retain the business and help through the early stages.Copyright 2015 Jack M. Kaplan & Anthony C. WarrenPrograms of the Small Business Administration (SBA) The Federal Government has a number of loan support programsThe rules change often so check the SBA web-siteMost of the SBA loans are made by lenders( commercial Banks, savings and loans, Insurance companies) Guaranteed by the SBAAverage loan is $100,000 plus-with a maturity of 10 yearsCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenThe program allocates in excess of 1 billion annually for scientific innovationPhase 1-awards up to $150,000 for the purpose of investigating the feasibility of an innovationPhase 11 –The report is reviewed and if feasible, an award up to $1,000,000Phase 111- Funding for commercialization must come from private sourcesCheck the SBIR web-site for proposal requestsSBIR ProgramC Ch 8 Pt 1 Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenLicensed by the SBA - Invest locally and have industry preferencesLimited to companies under $2 million in earnings and less than $6 million in net worthHave both debt and equity investmentsDo not take a majority position in the companyThere are also many other federally funded programs authorized by congress from time to time, entrepreneurs should check on these regularly.Small Business Investment Companies etc. Ch 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsMicro-FinanceFactoring/Supplier FinanceCopyright 2015 Jack M. Kaplan & Anthony C. WarrenState programsMany states target funds for economic development: PA. Ben Franklin Technology Centers make grants up to $450,000 in three installmentsN.J. New Jersey Economic Development Agency, loans and royalty agreementsAdvantages: No repayment unless the project succeeds andminimal equity conversion rightsRelatively simple processMay be one of only a few sources for early stageDisadvantages:Pay royalties on salesState Development ProgramsCh 8 Pt 1Personal FinancingAngelsFriends & FamilyPrivate EquityGovernment ProgramsBanksMicro-FinanceFactoring/Supplier Finance