Chapter 11 Raising money for starting and growing businesses. The topics discussed in this chapter are: Identify the management goal and organizational structure of the Multinational Corporation (MNC), describe the key theories that justify international business, explain the common methods used to conduct international business, provide a model for valuing the MNC. | Entrepreneurship Canadian Edition William D. Bygrave, Andrew Zacharakis, Sean Wise 1 RAISING MONEY FOR STARTING AND GROWING BUSINESSES Chapter 11 2 3 Learning Objectives Bootstrapping New Ventures Learning Objective Explain how entrepreneurs may bootstrap a new venture. Valuation Learning Objective Describe the methods of valuing a company. Financing a New Venture Learning Objective Describe ways to finance a new venture. Harvesting Investments Learning Objective Describe how investors can harvest or recoup their investment in a venture. 3 4 Today’s Key Concepts Progression of finance Subjective nature of valuation Calculating valuation Six things investors look for Spectrum of finance The venture capital cycle Three ways to harvest an investment IPO vs. M&A vs. buyback Inflection points 10 magic slides 4 Progression of Raising Money 5 6 How Much To Raise? Each round of investment will dilute you 20-40% Ask for enough capital to get you to the next inflection point (. finding MVP, first sales, scaling up, break even, etc.) 6 7 Inflection Points Obtaining IP rights First pilot Multiple pilots Getting your first paying customer Standardizing your offering Having enough cash flow to start paying yourself When your recurring revenue equals your monthly fixed expenses Entering a new territory with current product Entering a new product into a the current territory 7 8 The Investor Slidedeck The same list that appears in the business plan, the lean startup canvas and the business model canvas 8 9 The 10/20/30 Rule Guy Kawasaki 10/20/30 Rule of Presentations: 10 slides 20 minutes 30 point font 9 10 What Investors Listen For: Reasons to say ‘no’ Anything that shows this isn’t a good investment, ., Unsophisticated founders Unrealistic objectives Lack of traction 10 11 Value Is in The Eye of the Beholder ROLEX: Gentleman’s stainless steel Rolex Oyster Perpetual Datejust Chronometer bracelet watch, circa 1987 Limited Edition Worn by Michael . | Entrepreneurship Canadian Edition William D. Bygrave, Andrew Zacharakis, Sean Wise 1 RAISING MONEY FOR STARTING AND GROWING BUSINESSES Chapter 11 2 3 Learning Objectives Bootstrapping New Ventures Learning Objective Explain how entrepreneurs may bootstrap a new venture. Valuation Learning Objective Describe the methods of valuing a company. Financing a New Venture Learning Objective Describe ways to finance a new venture. Harvesting Investments Learning Objective Describe how investors can harvest or recoup their investment in a venture. 3 4 Today’s Key Concepts Progression of finance Subjective nature of valuation Calculating valuation Six things investors look for Spectrum of finance The venture capital cycle Three ways to harvest an investment IPO vs. M&A vs. buyback Inflection points 10 magic slides 4 Progression of Raising Money 5 6 How Much To Raise? Each round of investment will dilute you 20-40% Ask for enough capital to get you to the next inflection .
