All the things an entrepreneur or start-up needs to know. Is it about the idea? Is it about a great product? How to build a team? Do I need a business plan? How do I raise money? What is a great business strategy?
8. I HAVE AN IDEA!
Your idea is worth zero
Everyone has an idea
Secrets don’t make businesses
Consumers pay for businesses/products
Buyers acquire businesses/products
Investors search for businesses/products
9. I AM UNIQUE
Did you Google your idea?
There is always someone else
No competition = no market!
No research = deal breaking
10. IDEA vs EXECUTION
Execution is everything
Work! Make it happen!
Do it amazingly faster, better, bigger
Stop wishing, start doing
11. This document is proprietary & confidential information
how I start?
STARTING UP
19. YOUR BUCKET LIST
How to start up:
Find a great team
Form a business strategy
Use any available help
Launch the best product & get feedback
Generate traction with great marketing
Incorporate in a good ecosystem
Raise money
20. YOU NEED
VERY HARD WORK
Commit
Spend 10-15 hours per day
Entrepreneurship is NOT a part time job
21.
22. HOW DO I START
Remember!
1. Team
2. Strategy
3. Help
4. Product
5. Traction
6. Company
7. Money
23. This document is proprietary & confidential information
my business plan
STARTING UP
27. WHAT IS A PLAN?
It is your strategy on paper:
What
Where
How
Why
Who
How much
28. WHAT SHOULD I PLAN?
BP should answer:
What is your product?
What is your target market & customer?
How you will reach them?
Competition and how you are different?
The team & responsibilities?
How you will make money?
How much you will make/spend/need?
29. WHAT SHOULD I PLAN?
In plain words:
Your product
Your market
Your go to market strategy
Your competition & difference
Your team
Your revenue model
Your financials
30. PRODUCT
Should be a solution to a problem
What are you offering?
What are you solving?
What are the features?
How it works?
31. MARKET
Your entry point
What is the size?
What is the annual growth?
Who is your target user/customer?
Is it more than one?
32. GO TO MARKET
Your strategy to:
Generate content
Bring visitors
Make them users/subscribers
Convert them to customers
Take care of them/retain them
34. VALUE PROPOSITION
How are you different:
Is your product better?
Is your go to market innovative?
Is your revenue model great?
Do you have a patents?
Are you disrupting the market?
38. WHAT SHOULD I PLAN?
Remember. 10-15 pages with:
1. product
2. market
3. go to market
4. competition
5. team
6. revenue
7. financials
39. MUST BE CLEAR
Answers example:
A web & mobile marketplace for taxis
Taxi transportation & taxi drivers
Cold sales and sms/email marketing
UBER, and we are free for all
Bob, is the CEO, Mary is the Programmer
We make money from ads
We ‘ll make $12M/year, we need $400K
40.
41. THE HARD COPY
Files to prepare:
A business plan (8-10 pages is great)
An executive summary (1 page only)
A pitch (8-10 slides is great)
A profit & loss plan (1-3 sheets is OK)
54. WHERE TO FIND THEM
‘Mix & match’ events
Pitch & share your idea
Inspire great people
Online communities
Make a profile & hunt great talents
Post on groups & forums
55. This document is proprietary & confidential information
sharing my company
STARTING UP
60. COMPANY STOCKS
Sweat equity (or founders common stock)
People who work and get stock
Paid equity (or preferred stock)
Investors who give money and get stock
Pool equity (or option pool)
Future employees who get options
61. FOUNDERS STOCK
Work for equity. Remember:
100% of nothing or 1% of something?
Try to keep majority
Dilute when others come in
Agree on shares 1st thing!
62. INVESTORS STOCK
Pay for equity. Remember:
Smart ones want founders to keep majority
Expect great return or big exit
Provide more than money
63. OPTION POOL
Reward with equity. Remember:
Motivation for great talents
Reward on success
Pay advisors
64. EQUITY CAP TABLE
Best cap table share: (after many years)
Founders: 40%
Investors: 40%
Pool: 20%
40
40
20
65.
66. SHARING CRITERIA
What to value per co-founder
Experience
Market Knowledge
Skills
Commitment
Theory VS execution
67. SHARING EXAMPLE
WHAT YOUR WEIGHT HIS/HER SCORE RESULT
Experience 1-10 1-10 ?
Market Knowledge 1-10 1-10 ?
Skills 1-10 1-10 ?
Commitment 1-10 1-10 ?
Theory VS
Execution
1-10 1-10 ?
68. SHARING EXAMPLE
WHAT YOUR WEIGHT HIS/HER SCORE RESULT
Experience 5 3 15
Market Knowledge 7 7 49
Skills 9 10 90
Commitment 10 3 30
Theory VS
Execution
10 7 70
254
69. SHARING EXAMPLE
TOLIS
BUSINESS
(i.e. the CEO)
MARY
MARKETING
(i.e. the CMO)
BOB
PROGRAMMER
(i.e. the HEAD OF
PRODUCT
Score
/Share
520 254 370 1.144
45,5% 22,2% 32,3% 100%
* % of your company
70. REWARDING MENTORS
Work Idea Stage Startup
Stage
Growth
Stage
Consulting
(Skype, Meetings, E-mails)
0,25% 0,15% 0,10%
Introductions
(Hiring, Investors, Suppliers, Customers)
0,50% 0,40% 0,30%
Execution
(Training, Research, Strategy)
1.00% 0,80% 0,60%
* % of your company
71. REWARDING BROKERS
Success Idea Stage Startup
Stage
Growth
Stage
Fund Raising
(Suggest, Negotiate, Raise)
5% 3% 1%
Mergers & Acquisitions
(Suggest, Negotiate, Exit)
7% 4% 2%
Sales
(Suggest, Negotiate, Deal)
20% 10% 5%
* % of the amount raised/gained
72. IF THEY LEAVE WHAT?
Get stock as you go
Vesting agreement
Example, Mary gets:
22% total
Vested 5% per month
So she vests her stock step by step
73. This document is proprietary & confidential information
available help
STARTING UP
106. SHOULD I GROW BIG?
Organic growth=
Make users, customers, revenue, profits
Increase your business valuation
Sell stocks later at a high price (IPO)
107.
108. SHOULD I SELL?
Merger & acquisition exit=
Satisfy your buyer’s need
Product/distribution channel/patent/user base
Accept highest offer
109.
110. This document is proprietary & confidential information
go to market
STARTING UP
115. GO TO MARKET IS
Your strategy to:
Generate content
Bring visitors
Make them users/subscribers
Convert them to customers
Take care of them/retain them
116. GO TO MARKET
‘Chicken or egg’ problem:
You need content to attract users
You need users to make content
117. GO TO MARKET IS NOT
Following the hype:
Social media noise
Local media interviews
Presentations at geek events
118. GO TO MARKET IS NOT
Wishful thinking:
If just 1% of the market..
I would buy it..
People would love to use us..
119. GO TO MARKET IS NOT
Wishful thinking:
But we have a great product!!
122. Traditional channels
Events
Expos
TV ads & shows
Radio ads & sponsorships
Press ads & advertorials
Outdoor
Direct marketing
Online channels
Google ads
Web ads
Social ads
Social media
Email marketing
Newsletters
Mobile marketing
Blog advertorials
Affiliate marketing
OPTIONS
123. GOALS vs CHANNELS
Bring visitors
Traditional & online
Convert them to customers
Online mostly
Take care of them/retain them
Traditional & online
124. GOALS vs CHANNELS
Bring visitors
Advertorial & Facebook ads
Convert them to customers
Newsletter with special offer
Take care of them/retain them
Direct email & sms reminders
125. Poor marketing
Email spam
Generic advertising
People will add content
People will come to us
Social media marketing
Events
Sales
Press releases
Public relations
Better marketing
LinkedIn InMails
Google keyword ads
Crawl craigslist content
Copy Twitter profiles
Social mentions + ads
One to one meetings
Cold sales to CEOs
Motivate our influencers
Media exclusivities
DO IT RIGHT!
126. MARKETING BUDGET
How much?
Marketing services> one-off payment
Design, Consulting, Development, Production
Marketing budget> per month payments!
Traditional & online ads, social media
127. This document is proprietary & confidential information
I want money
STARTING UP
132. RAISE MONEY WHEN
You can, not when you need
Be sure first to achieve:
1. Proof of concept (use)
2. Traction (users)
3. Market validation (clients)
134. FUND RAISING STEPS
Steps to take:
1. Build a team
2. Launch your product
3. Start marketing
4. Generate traction
Ready to meet investors
135. FUND RAISING TOOLΚΙΤ
Tools you need:
1. The 1 page Executive Summary
2. The 10-15 slides Pitch
3. The 5 years profit & loss plan
Start your fund raising campaign
136. HOW MUCH I NEED?
Calculate ALL expenses
Salaries
Professional services
Marketing
Travel & accommodation
Up to the ‘making money’ point
140. INVESTORS
Ask for:
Equity for their money (%)
Expect:
Profits every year (based on their %)
Their % value:
Angel investors: 3X-10X
Venture capital funds: 10X+
141. INVESTORS GET EQUITY
Equity now:
Pre money valuation (company’s worth)
i.e. your company worth's 1.000.000
Post money valuation (value after money)
Your raise 100.000
Now your company worth's 1.100.000
Investor gets 9%
142. INVESTORS GET EQUITY
Equity later:
Loan converted to equity later
i.e. your company worth's now 1.000.000 or 0
Your raise 100.000 now
Investor gets % based on future valuation
In 1 year your company worth's 10.000.000
Investor gets 1% 1 year later
143. Raising in EU
-Poor valuation
-Equity now
-I.P. stays here
-Bureaucracy
-Corporate costs
-Bad mentality
-Taxation
-Founders guarantee
Raising in the USA
+Great valuation
+Equity later
+I.P. in USA
+No bureaucracy
+Low cost
+Risk taking mentality
+No Taxation
+No guarantee
+Ecosystem
-Relocation & VISA
COMPARISON
144. Investors
- Due diligence
- Equity
+ Smart money
+ No capital return
COMPARISON
Bank loan
- Interest
- Capital return
- ‘Dumb’ money
+ Νo equity
+ Easier to get
145. This document is proprietary & confidential information
I need a company
STARTING UP
149. COMPANY
You need a registration:
To issue invoices
To split equity
To sell physical products
150. COMPANY
You don’t need a registration:
To work for your idea
To sign any agreements
To register brands & patents
To raise, spend, make money
151. INCORPORATING
Think global, act local:
Head Quarters in a great ecosystem
Patents & intellectual property in HQ
Executive team in HQ
Sales team hired as contractors
Development team hire in local company
155. ATTORNEYS COSTS
How much it cost to:
Company registration + Bank ($1.500+)
Visa & green cards ($4.000+)
Patent filling ($3.000+)
Brand registration ($1.500+)
156. US corporate governance
+ Set up: Online, 2 hours
+ TAX: 0% & VAT: 9%
+ Capital: NO
+ Investors TAX: NO
+ Other TAXES: NO
+ Accountant: NO
+ Residence: NO
+ Liability: NO
+ Valuation: 10 factors
EU corporate governance
- Set up: Offline, Months
- TAX: 35% +, VAT 20%+
- Capital: YES
- Investors TAX: YES
- Other TAXES: YES plenty
- Accountant: YES
- Residence: YES
- Liability: YES, all
- Valuation: 2 factors
COMPARISON
157. Factors in the US
Revenue & profits
Assets
Funds raised
Market size
Competition size
Innovation
Technology
Patents
Registrations
Critical mass
Factors in EU
Revenue & profits
Assets
VALUATION
158. BUSINESS VALUATION
Valuation is everything!
Raising funds (pre money/post money)
Mergers & acquisitions
Selling stock & IPO
159. This document is proprietary & confidential information
summary
STARTING UP
161. DON’T FORGET
How to start-up:
Find a great team
Form a business strategy
Use any available help
Launch the best product & get feedback
Generate traction with great marketing
Incorporate in a good ecosystem
Raise money
164. This document is proprietary & confidential information
Managing Partner, aival.com
THANK YOU
TOLIS AIVALIS
facebook.com/TolisAivalis linkedin.com/in/Aivalis @aivalis