Presentation to MoMo London - February 2014

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Information about Presentation to MoMo London - February 2014
Investor Relations

Published on February 20, 2014

Author: capenterprise



How the London Accelerator & Seed Investment Scene is looking in 2014
( Get to the end and you will find lots of links to who is investing in W 2014? )

Accelerating and Financing London’s Tech Sector Start-ups. . John Spindler CEO of Capital Enterprise @capenterprise 1

A start-up is… “ an organisation in search of a repeatable and scalable business model” – Eric Ries- Author of the Lean Start-up. @capenterprise 2

Scale focused start-ups are…different • Ambitious: want to be worth £20M+ minimum in 3 years. • Solve a big problem for potential customer in a “Game Changing ” way. • Build/leverage new technology/ business model innovations • Acquire and leverage as many “Unfair Advantages as possible”- team, key partners, resources etc • Move very FAST @capenterprise 3

“ An Investable Start-up Needs.. • Team, Tech & resources that is FIT for the task of creating an awesome company • Smart Ass Team • Product that is the best solution FIT for the target customers problems. • Disrupting a Big Ass Market • with a Kick Ass Product ( Jeff Clavier 3 Ass-es rule) • Business Model that is FIT to be scaled. + Capital Efficient to Scale. @capenterprise 4

How! Advance in Stages… ..using the Lean Start-up Method @capenterprise 5

Idea to Tech Business- Three Chasms.

Help in Forming & Exploring Ideas @capenterprise 7

Sources of Start-up Help for Tech Entrepreneurs Information: • • • • • • • • • • • • • • • • • • • • • Capital Enterprise; Meet-up - Mobile Academy- Makers Academy- GoGowo- Skills Matter- Start- up Britain - British Library- Google Campus- General Assembly- Innovation Warehouse- IC Tomorrow - UCL Decide- Start-up Weekend- London- Launch 48- Start-ups on Air at Google Campus Hubventurelabs - 3 Beards- Tech Hub- Dreamstake- Capital List Get Together- @capenterprise 8

Forming Businesses.. ideas from??? @capenterprise 9

Developing the team & Product • Hipster (Designer) • Hacker (Developer) • Hustler (Distributor) @capenterprise 10

Minimum Viable Product (MVP): Problem – Solution FIT @capenterprise

Proof of Concept? Does it work? Does anyone care? @capenterprise 12

Funding Product Development & Beta Testing Grants & Awards General • • • • • • • • • Technology Strategy Board ( R&D Funding) - Knowledge Transfer Networks- IC Tomorrow- NESTA- London European Enterprise Network- E Funding for SME R&D - EU Funding for R&D collaborations: Knowledge Transfer Partnerships funding support- J4B- Portal for grant finding Translation/ Follow on research funds. • • • • • • @capenterprise 13

Crowdfunding (Reward) Crowd funding PlatformsReward based Crowdfunding platforms- will help you to raise funding to build a proto-type and market test a great idea or product.- Great for pre-selling cool tech hardware. • • (USA) • • • • • • • • • @capenterprise 14

Need less than £20K to get to Build and test MVP? No Funds Unemployed? Need Less than £10K to Launch a business New Enterprise Allowance Scheme Self Fund Borrow Write a simple Business Plan & 12 month cashflow Community Development Finance Institution Start-Up Loan • Bank Sources of Grants- Competition funding £1000 issued to 10+ businesses per month- Princes Trust £1000- £20,000 Enterprise Loans for Under 25’s- or New Enterprise Allowance Scheme – Check who delivers the scheme in London by e-mailing Capital Enterprise. Community Development Finance Associations- - Also check out North London Community Finance ELSBC Access to Finance – Business Plan support for those looking to raise up to £10K Soft loans for Creative Businesses- @capenterprise 15

Idea to Tech Business- Three Chasms.

Accelerators help by .. Offering early Stage Entrepreneurs… • Fellow Community of entrepreneurs & supporters • Runway support & funding (£15-£100K at standardised investment terms. ) ( 3-6 months on average) • Physical Space & Facilities • Mentors ( 1st Industry- 2nd Investors) • Help to Rapid Field Trail with users & customers. • Demo days- Introductions to Investors/ customers …so that they can test.. • Product- Assess Functional use/ improve design & UX • Market Reaction- interest/ usage/revenue - AARRR • Revenue/ profit Potentialpricing, market timing, LTV/CCA • Business Model- “To Pivot or Not To Pivot” • Investor reaction- interest and valuations • Team- ability to work together and deliver.

Accelerators In London

Accelerators Accelerators : Training & Mentoring programmes that provide fast-track to seed funding for Scalable new businesses 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Seed Camp: Tech Stars Europe - Wayra- Microsoft Ventures - Start-Up Bootcamp ( 3 new accelerators including Fintech in London)- Emerge Venture Labs- ( Education TECH) Oxygen Accelerator ( Now in London) - BBC Worldwide Labs- Accelerator Academy ( Part-Time)- Fintech Innovation Labs- Entrepreneur First- The Bakery ( Adtech) -!/ Healthbox- Level 39- ( More of an incubator) Idea London ( Cisco, DC Thompson and UCL) – IC Start-up- ( Imperial) Bethnal Green Ventures ( Social Impact)- HUB Launchpad- (Social Impact) True Start- (Retail Tech) – Eco-Machines incubator (Hardware)- Capital’s Accelerator Programme Partners. @capenterprise

Capital’s Accelerator Programme Partners and CoInvestors Pre-Acceleration Support/ Incubation Acceleration Support Connections to Investors

Accelerators want businesses who..…

Start- Up Funding road –map. Hackathons/ Hatcheries/ Meet-ups. Idea Bootstrap- FFF Problem/ Space Exploration MVP Factories Start-up Loans Design/ Prototype Accelerators (Early) SEIS Super Angels/ Angel Groups Innovation Awards Crowdfunding i.e. Kickstarter Beta Test Adapt/ PivotX2 Seedrs/ Crowdcube/F6s Accelerators (Late) Launch Early Stage VC’s @capenterprise 22

4 3 1 Idea Stage 2 Commitment Stage- Secure Co-Founders FFF funding round –Build & Beta Test Minimum Viable Product Seed Investment Round (Angels + Early VC’s) - Prove Business model & acquire metrics to prove scalability 5 Series A Round (Angels, VC’s & Strategic Investors) – Go for scale, build out team, technologyEXECUTE 6 Exit (Average 7 years and after many rounds) – Trade Sale or IPO ££££££££££££££ How Start-Up Funding Works ?Why 100% of “Nothing” is worth Less than 10% of something big @capenterprise 23

Investment Essentials Round Pre- Seed Seed Amount Purpose Under 50K Under £250K (SEIS £150K) Assemble Team/ Build MVP Beta Test- Launch into Beachhead Market Super Seed £250K-£1m Series A (Small) £1m- £5M Valuation Guideline (London) Zero £450-£750K (Pre Money) Proof of Market & Scalability £1-£3m Scale - Build out Team/ Technology and Expand Marketing £3-20m @capenterprise Source Own Money/ FFF/ Crowdfunding/ TSB Angels/ Crowdfunders/ TSB Seed VC's/ Angel Syndicates/ CoInvestment Funds/ Family Offices VC's/ Corporate Venture Firms/ Family Offices. 24

SEIS is…… “a game changer”? Seed Enterprise Investment Scheme-SEIS is a tax break launched in 2012 for UK tax payers to encourage them to buy shares in start-up companies registered in the UK The Facts: • • • • • • • • SEIS investors can input £100,000 in a single tax year rising to a maximum £150,000 over two or more tax years in to a single company Investors cannot control the company receiving their capital Investors pick up 50% tax relief in the tax year the investment is made, regardless of their marginal rate. In the 2013-14 tax year, tax payers can roll 50% of a chargeable gain in the tax year in to a SEIS with a full capital gains tax exemption (another 14%) The business must be a start-up company -registered in the UK within 2 years of claim. The company must not employ more than 25 workers. The company must have assets of less than £200,000. The company has to trade in an approved sector – generally not in finance or investment, for example, a property company raise capital as a SEIS. @capenterprise 25

Think like an Angel! Why Do Angels Invest? Where to find them? #capenterprise

Key to being s Successful Business Angel? • Good Reputation – “Track Record” • Great Source – “Having good introducers” • Good Selection – “ Sticking to what you know” • Adding Value- “ Offering more than money to increase the chance of success” • Ability to Follow on Successes/ Walk Away from Failures. • Getting Value – “Getting a Good deal at all stages” #capenterprise

Capital List – The Minimum Viable Introducer “ Showcasing and connecting Entrepreneurs to champions and investors” @capenterprise 28

Send a slide deck and get introduced Ten slides. Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting—and business angels are very normal. If you must use more than ten slides to explain your business, you probably don’t have a business. The ten topics that an investors cares about are: 1. Summary and call to action/ what do you want? 2. Problem 3. Your solution 4. Business model 5. Underlying magic/technology 6. Marketing and sales 7. Competition 8. Team 9. Projections and milestones 10. Status and timeline Send to : @capenterprise 29

Airbnb pitch deck @capenterprise 30

7 Types of Early Stage Investors in London Market 1. 2. 3. 4. 5. 6. 7. Crowdfunders/ Platforms Tax Relieve Seeking SEIS/EIS Funds Government Backed ECF’s Traditional Angel Syndicates Super Angels VC’s Strategic Investors ( Corporate Venture) @capenterprise 31

Seed/ Early stage Investment Platforms Crowdfunders. Angel Platforms - - @capenterprise 32

Syndicates. Top SEIS Funding Syndicates Top Traditional Angel Syndicates 1. 1. London Business Angels: 2. 3. 4. 5. Jenson Ingenious Ascension Ventureshttp://www.ascensionmedia. com/ascension-ventures.php Start-up Funding Clubhttp://www.startupfundingcl Ascot SEIS – 2. E100 (LBS) 3. Oxford Angels: 4. Cambridge: 5. Envestors- 6. Angels Den- @capenterprise 33

Super Seed Investors • Playfair Capital- • Angel Pad/ Avonmore • Kima Ventures- • Boundary Capital - • Venerex ( Fashion Tech- see Capital List) • Jam Jar Investments- • No 1 Seed - • Warner Yard Associates - • Angel List – @capenterprise 34

Active VC’s in London. Cool Cats Big 5 • Accel Partners: Stage agnostic, see their portfolio here. • Balderton- Stage Agnostic- See there portfolio here • • DN Capital : Early and mid-stage, see their portfolio here • DFJ Esprit: Early to mid-stage, see their portfolio here. • Spark Ventures : Stage Agnostic- See there portfolio here • Octopus Ventures: Early to mid-stage, see their portfolio here. Piton Capital: Early and mid-stage specialize in market places. M8 Capital : Mobile Specialists, see their portfolio here Wellington Partners: Stage Agnostic, see there portfolio here • Amadeus Capital: Early and mid-stage- just launched new fund. Index Ventures: Stage agnostic, see their portfolio here. • Profounders: Early and mid-stage, see their portfolio here. • • • ECF’s/ Public funded. • Notion Capital – SAAS and Cloud specialist- See portfolio here • Passion Capital: Early Stage, see their portfolio here. • Episode1: Early Stage Software Companies • Arts Alliance: Minimum investment £500K in Media related tech- see portfolio here • Longwall – Oxford Based – Science backed Start-ups focus • EC1 Capital: Early stage, see their portfolio here • MMC Ventures - Series A Fund- Co-Investment fund with Mayor of London • Connect Ventures- Early stage and very cool. • Hoxton Ventures – New and focus on seed with next mobe to USA. • @capenterprise 35

Specialist Funds Social/ Tech for Good NESTA - Unltd – Big Society Capital- Sources of Social Finance- Bridges Venture Fund Big Issue Investment- Social Finance- Social Investment Fund- Women - Stargate Capital- Trapezia- FSE- Incito- Aspire Fund - Green Bridges Sustainable Fund- Ingenious Media- Cleantech Fund Carbon Trust- Low Carbon Accelerator- CT Investment Partners- Wellington Partners- @capenterprise 36

Active Corporate Players @capenterprise 37

UK Investment State of Play 2013 Deals Under £0.5M Deals Over £0.5m • SEIS Deals £5-6m per month - 82 Deals - £72K Average • EIS & SEIS - £600M in New Companies in 2012-13. - Estimated 1,116 New Companies received investments. Courtesy of Stuart McKnight at 38

If you want an introduction then send a slide deck @capenterprise 39

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