John Spindler, CEO of Capital Enterprise and founder of Capital List, outlines in his presentation the stages of financing your tech or game startup in London.
1. Accelera(ng
and
Financing
London’s
Start-‐ups
.
John
Spindler
CEO
of
Capital
Enterprise
1
@capenterprise
2. A
start-‐up
is
not
a
Game!
“
A
start-‐up
is
an
organisa(on
in
search
of
a
repeatable
and
scalable
business
model”
–
Eric
Ries-‐
Author
of
the
Lean
Start-‐up.
@capenterprise
2
3. Investable
start-‐ups
are…different
• Ambi(ous:
want
to
be
worth
£20M+
minimum
in
3
years.
• “Game
Changing”
• Build/leverage
new
technology/
business
model
innova(ons
• Acquire
and
leverage
as
many
“Unfair
Advantages
as
possible”-‐
team,
key
partners,
resources
etc
• Move
very
FAST
@capenterprise
3
4. To
get
investment
need
to
change
Business
Models
From
Gun
for
Hire
needs
to
become...
..To
Products
built
at
“own
risk”
...
@capenterprise
4
6. How
you
make
money
is
also
changing…
29
Business
Models
• h`p://lsvp.com/
2008/07/02/29-‐business-‐
models-‐for-‐games/
Most
Popular
are
• Retail
(Pay
upfront)
• Freemium
(Ini(ally
free
un(l…)
• Premium
(
Pay
for
extras)
• Around
Game
Adver(sing
(
Banners,
click
throughs
…)
• In
Game
Adver(sing
(
adverts/
product
placement
in
game..)
• Subscrip(ons
• Third
Party
sponsorship
@capenterprise
6
7. @capenterprise
7
Idea
Problem/
Space
Explora(on
Design/
Prototype
Beta
Test
Adapt/
PivotX2
Launch
Bootstrap-‐
FFF
Finance
InnovaGon
Awards
Start-‐up
Loans
Crowdfunding
i.e.
Kickstarter
Seedrs/
Crowdcube/
F6s
SEIS
-‐
Business
Angels
Super
Angels/
Angel
Groups
Early
Stage
VC’s
Tech
Start-‐
Up
Funding
Road
map.
MVP
Factories
Hackathons/
Hatcheries/
Meet-‐ups.
Accelerators
(Early)
Accelerators
(Late)
8. @capenterprise
8
1
Idea
Stage
2
Commitment
Stage-‐
Secure
Co-‐Founders
3
FFF
funding
round
–Build
&
Beta
Test
Minimum
Viable
Product
4
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,
technology-‐
EXECUTE
6
Exit
(Average
7
years
and
aler
many
rounds)
–
Trade
Sale
or
IPO
££££££££££££££
How
Start-‐Up
Funding
Works
?-‐
Why
100%
of
“Nothing”
is
worth
Less
than
10%
of
something
big
9. “
An
Investable
Start-‐up
Needs..
• Team,
Tech
&
resources
that
is
FIT
for
the
task
of
crea(ng
an
awesome
company
• Product
that
is
the
best
solu(on
FIT
for
the
target
customers
problems.
• Business
Model
that
is
FIT
to
be
scaled.
• Smart
Ass
Team
• with
a
Kick
Ass
Product
• Disrup(ng
a
Big
Ass
Market
(
Jeff
Clavier
3
Ass-‐es
rule)
+
Capital
Efficient
to
Scale.
@capenterprise
9
10. How!
Advance
in
Stages…
..using
the
Lean
Start-‐up
Method
@capenterprise
10
11. Building
a
Smart
Ass
Team
• Hipster
(Designer)
• Hacker
(Developer)
• Hustler
(Distributor)
@capenterprise
11
12. Building
a
Kick
Ass
Product
Change
behaviour....
...create
a
habit...
@capenterprise
12
13. Building
a
Kick
Ass
Product
Good
Product
design..
…makes
the
Funnel
Conversion
Metrics
work.
@capenterprise
13
15. Market
Size
• How
big
in
terms
of
number
of
customers
and
value
of
sales
is
your
poten(al
available
market?
• How
big
is
the
immediate
addressable
market
your
start-‐up
can
reach
in
the
next
12-‐24
months?
• What
%
of
that
addressable
market
will
you
aim
to
capture?
@capenterprise
15
16. Sources
of
Start-‐up
Help
for
Scale
Focused
Entrepreneurs
InformaGon:
• Capital
Enterprise;
www.capitalenterprise.org
• Meet-‐up
-‐
h`p://www.meetup.com
• Mobile
Academy-‐
h`p://themobileacademy.org.uk/
• Makers
Academy-‐
h`p://www.makersacademy.com/
• GoGowo-‐
h`p://www.gocowo.com
• Skills
Ma`er-‐
h`p://skillsma`er.com/
• Start-‐
up
Britain
-‐
h`p://www.startupbritain.org
• Bri(sh
Library-‐
www.bl.uk/bipc
• Google
Campus-‐
h`p://www.campuslondon.com
• General
Assembly-‐
h`ps://generalassemb.ly/loca(ons/london
• Innova(on
Warehouse-‐
h`p://www.theiw.org
• IC
Tomorrow
-‐
h`ps://connect.innovateuk.org/web/ictomorrow
• UCL
Decide-‐
h`ps://www.ucl.ac.uk/decide
• Start-‐up
Weekend-‐
London-‐
h`p://london.startupweekend.org/
• Launch
48-‐
h`p://launch48.com/
• Mobile
Collec(ve
h`p://mobilecollec(ve.wordpress.com
• 3
Beards-‐
h`p://www.3-‐beards.com/
• Tech
Hub-‐
h`p://www.techhub.com/events/
• Dreamstake-‐
h`p://www.dreamstake.net/events
• Capital
List
Get
Together-‐
h`p://www.capitallistblog.co/our-‐monthly-‐monday-‐get-‐together/
@capenterprise
16
18. Proof
of
Concept/
Proof
of
Market?
1.
Does
it
work?
2.
Does
anyone
care?
@capenterprise
18
19. Funding
Games
Development
&
Beta
TesGng
Grants
&
Awards
General
• Technology
Strategy
Board
(
R&D
Funding)
-‐
h`p://www.innovateuk.org
-‐
h`p://www.innovateuk.org/content/compe((on/grant-‐for-‐rd-‐single-‐business.ashx
• Knowledge
Transfer
Networks-‐
www.innovateuk.org
• Abertay
Prototype
Fund
-‐
h`p://prototypefund.abertay.ac.uk/
• Skillset
-‐
h`p://www.crea(veskillset.org/games/
• IC
Tomorrow-‐
h`ps://connect.innovateuk.org/web/ictomorrow
• NESTA-‐
h`p://www.nesta.org.uk/
• London
European
Enterprise
Network-‐
h`p://www.een-‐london.co.uk
• E
Funding
for
SME
R&D
-‐
h`p://www.eurostars-‐eureka.eu/what.do
• EU
Funding
for
R&D
collabora(ons:
h`p://ec.europa.eu/research/par(cipants/portal/page/calls
• Knowledge
Transfer
Partnerships
funding
support-‐
hap://www.ktponline.org.uk/ktp-‐what-‐will-‐it-‐cost-‐my-‐business
• J4B-‐
Portal
for
grant
finding
h`p://www.j4b.co.uk
Game
CompeGGons
• h`p://www.daretobedigital.com/
• h`p://www.glasgow2014.com/press-‐releases/digital-‐game-‐compe((on
@capenterprise
19
20. @capenterprise
Need
less
than
£20K
to
get
to
Build
and
test
MVP?
-‐ Sources
of
Grants-‐
www.j4b.co.uk
-‐ Compe((on
funding
£1000
issued
to
10+
businesses
per
month-‐
h`p://www.shell-‐livewire.org
-‐ Princes
Trust
h`p://www.princes-‐trust.org.uk/need_help/enterprise_programme.aspx
-‐ £1000-‐
£20,000
Enterprise
Loans
for
Under
25’s-‐
www.startuploanslondon.co.uk
or
www.startuploans.com
-‐ New
Enterprise
Allowance
Scheme
–
Check
who
delivers
the
scheme
in
London
by
e-‐mailing
Capital
Enterprise.
-‐ Community
Development
Finance
Associa(ons-‐
h`p://www.cdfa.org.uk
-‐
Also
check
out
North
London
Community
Finance
-‐
ELSBC
Access
to
Finance
–
Business
Plan
support
for
those
looking
to
raise
up
to
£10K
• Sol
loans
for
Crea(ve
Businesses-‐
http://www.creativeindustryfinance.org.uk/
Need
Less
than
£10K
to
Launch
a
business
No
Funds
Grant-‐
www.j4b.co.uk
Unemployed?
New
Enterprise
Allowance
Scheme
Self
Fund
Borrow
Write
a
simple
Business
Plan
&
12
month
cashflow
Community
Development
Finance
Ins(tu(on
Start-‐Up
Loan
Bank
20
21. Crowdfunding
(Reward)
Crowd
funding
Plaforms-‐
Reward
based
Crowdfunding
playorms-‐
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.
• www.kickstarter.com
• www.indiegogo.com
(USA)
• www.peoplefund.it
• www.sponsume.com
• h`ps://www.buzzbnk.org
• www.pleasefund.us
• www.wefund.com
• www.pozible.com
• www.crowdfunder.co.uk
• h`p://spacehive.com
• h`ps://www.banktothefuture.com
@capenterprise
21
23. 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
&
Facili(es
• Mentors
(
1st
Industry-‐
2nd
Investors)
• Help
to
Rapid
Field
Trail
with
users
&
customers.
• Demo
days-‐
Introduc(ons
to
Investors/
customers
…so
that
they
can
test..
• Product-‐
Assess
FuncKonal
use/
improve
design
&
UX
• Market
Reac(on-‐
interest/
usage/
revenue
-‐
AARRR
• Revenue/
profit
Poten(al-‐
pricing,
market
Kming,
LTV/CCA
• Business
Model-‐
“To
Pivot
or
Not
To
Pivot”
• Investor
reac(on-‐
interest
and
valuaKons
• Team-‐
ability
to
work
together
and
deliver.
24. Capital’s
Accelerator
Programme
Partners
and
Co-‐
Investors
in
London
Pre-‐AcceleraGon
Support/
IncubaGon
AcceleraGon
Support
ConnecGons
to
Investors
26. Investment
Essen(als
@capenterprise
26
Round Amount Purpose
Valuation
Guideline
(London)
Source
Pre-‐
Seed Under
50K
Assemble
Team/
Build
MVP Zero
Own
Money/
FFF/
Crowdfunding/
TSB
Seed
Under
£250K
(SEIS
£150K)
Beta
Test-‐
Launch
into
Beachhead
Market
£450-‐£750K
(Pre
Money)
Angels/
Crowdfunders/
TSB
Super
Seed £250K-‐£1m
Proof
of
Market
&
Scalability £1-‐£3m
Seed
VC's/
Angel
Syndicates/
Co-‐
Investment
Funds/
Family
Offices
Series
A
(Small) £1m-‐
£5M
Scale
-‐
Build
out
Team/
Technology
and
Expand
Marketing £3-‐20m
VC's/
Corporate
Venture
Firms/
Family
Offices.
27. @capenterprise
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
exemp(on
(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.
SEIS
is……
“a
game
changer”?
27
28. Think
like
an
Angel!
Why
Do
Angels
Invest?
Where
to
find
them?
www.capitallist.co
#capenterprise
29. Key
to
being
s
Successful
Business
Angel?
• Good
Reputa(on
–
“Track
Record”
• Great
Source
–
“Having
good
introducers”
• Good
Selec(on
–
“
S(cking
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.
• Ge{ng
Value
–
“Ge]ng
a
Good
deal
at
all
stages”
@capenterprise
30. Capital
List
–
The
Minimum
Viable
Introducer
“
Showcasing
and
connecKng
Entrepreneurs
to
champions
and
investors”
beta.capitallist.co
@capenterprise
30
31. 31
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
@capenterprise
Pitch
deck
for
investors
h`p://www.slideshare.net/slidesthatrock/how-‐to-‐pitch-‐a-‐vc-‐redesigned
32. Book
to
come
and
see
Capital
List
for
pitch
reviews,
advice
on
investment
opportuni(es
and
poten(al
introduc(ons
to
investors.
32
@capenterprise
h`p://www.capitallistblog.co/startups/meet-‐capital-‐list/
33. 7
Types
of
Early
Stage
Investors
in
London
Market
1. Crowdfunders/
Playorms
2. Tax
Relieve
Seeking
SEIS/EIS
Funds
3. Government
Backed
ECF’s
4. Tradi(onal
Angel
Syndicates
5. Super
Angels
6. VC’s
7. Strategic
Investors
(
Corporate
Venture)
@capenterprise
33
35. Syndicates.
Top
SEIS
Funding
Syndicates
1. Jenson
Solu(ons-‐
www.jensonsolu(ons.com
2. Ingenious
Media-‐
www.ingeniousmedia.co.uk
3. Ascension
Ventures-‐
h`p://
www.ascensionmedia.com/
ascension-‐ventures.php
4. Start-‐up
Funding
Club-‐
h`p://
www.startupfundingclub.com/
5. Ascot
SEIS
–
www.ascotwm.com
Top
TradiGonal
Angel
Syndicates
1. London
Business
Angels:
h`p://www.lbangels.co.uk/
2. E100
(LBS)
3. Oxford
Angels:
h`p://www.oxei.co.uk
4. Cambridge:
h`p://cambridgeangels.com
5. Envestors-‐
www.envestors.co.uk
6.
Angels
Den-‐
www.angelsden.com
@capenterprise
35
36. Super
Seed
Investors
• Playfair
Capital-‐
h`p://playfaircapital.com
• Angel
Pad
h`p://angellab.co.uk/
• Kima
Ventures-‐
h`p://www.kimaventures.com
• Boundary
Capital
-‐
www.boundarycapital.com
• Venerex
(
Fashion
Tech-‐
see
Capital
List)
• Jam
Jar
Investments-‐
h`p://jamjarinvestments.com
• No
1
Seed
-‐
www.number1seed.co.uk
• Warner
Yard
Associates
-‐
h`p://www.warneryard.com/
• Angel
List
–
www.angel.co
@capenterprise
36
37. Ac(ve
VC’s
in
London.
Big
5
• Accel Partners: Stage agnostic, see their portfolio here.
• Balderton-‐
Stage
Agnostic-‐
See
there
portfolio
here
• Index Ventures: Stage agnostic, see their portfolio here.
• Wellington Partners: Stage Agnostic, see there portfolio here
• Octopus Ventures: Early to 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
• Longwall
–
Oxford
Based
–
Science
backed
Start-‐ups
focus
•
MMC Ventures - Series A Fund- Co-Investment fund with Mayor of London
•
Cool
Cats
• Profounders: Early and mid-stage, see their portfolio here.
• Amadeus
Capital:
Early and mid-stage- just launched new
fund.
• Forward Group- Early stage investor.
• Piton Capital: Early and mid-stage specialize in market places.
• 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
• M8
Capital
:
Mobile
Specialists,
see
their
portfolio
here
• Arts
Alliance:
Minimum
investment
£500K
in
Media
related
tech-‐
see
portfolio
here
• EC1 Capital: Early stage, see their portfolio here
• Connect
Ventures-‐
Early
stage
and
very
cool.
• Hoxton
Ventures
–
New
and
focus
on
seed
with
next
mobe
to
USA.
@capenterprise
37
38. Specialist
Funds
Social/
Tech
for
Good
-‐ NESTA
-‐
www.nesta.org.uk/investments
-‐ Unltd
–
www.ubltd.org.uk
-‐ Big
Society
Capital-‐
h`p://www.bigsocietycapital.com
-‐ Sources
of
Social
Finance-‐
h`p://www.bigsocietycapital.com/finding-‐the-‐right-‐investment
-‐ Bridges
Venture
Fund
h`p://www.bridgesventures.com/social-‐entrepreneurs-‐fund
-‐ Big
Issue
Investment-‐
h`p://www.bigissueinvest.com
-‐ Social
Finance-‐
h`p://www.socialfinance.org.uk
-‐ Social
Investment
Fund-‐
h`p://www.thesocialinvestmentbusiness.org
Women
-‐ Stargate
Capital-‐
Trapezia-‐
h`p://www.stargatecapital.co.uk/trapezia_1.aspx
-‐ FSE-‐
Incito-‐
h`p://thefsegroup.com/investors/business-‐angels/incito-‐ventures/
-‐ Aspire
Fund
-‐
h`p://www.capitalforenterprise.gov.uk/files/Aspire%20Informa(on%20Leaflet%20(v%202)%20Flyer%20brochure.pdf
Green
-‐ Bridges
Sustainable
Fund-‐
h`p://www.bridgesventures.com/sustainable-‐growth-‐funds
-‐ Ingenious
Media-‐
Cleantech
Fund
h`p://www.ingeniousmedia.co.uk/investments/investment-‐opportuni(es/clean-‐energy
-‐ Carbon
Trust-‐
h`p://www.carbontrust.com/about-‐us/our-‐investments
-‐ Low
Carbon
Accelerator-‐
h`p://www.lowcarbonaccelerator.com
-‐ CT
Investment
Partners-‐
h`p://www.c(p.co.uk
-‐ Wellington
Partners-‐
h`p://www.wellington-‐partners.com/wp/index.html
@capenterprise
38
40. UK
Investment
State
of
Play
2013
Deals
Under
£0.5M
• SEIS
Deals
£6-‐7m
per
month
-‐
82
Deals
-‐
£72K
Average
• EIS
&
SEIS
-‐
£600M
in
New
Companies
in
2012-‐13.
-‐
EsKmated
1,116
New
Companies
received
investments.
Deals
Over
£0.5m
Courtesy
of
Stuart
McKnight
at
www.ascendant.co.uk
40
41. Games
Investors
• London
Venture
Partners
-‐
h`p://www.londonvp.com/
• DN
Capital
-‐
h`p://dncapital.com/
• Ini(al
Capital
-‐
h`p://www.ini(alcapital.com
• White
Star
Capital
-‐
h`p://whitestarvc.com/
• Playfair
Capital
-‐
h`p://playfaircapital.com
• Profounders-‐
h`p://www.profounderscapital.com
• Connect
Ventures-‐
h`p://connectventures.co.uk
• Balderton-‐
h`p://www.balderton.com
• Index-‐
h`p://www.indexventures.com
• Nokia
Growth
Partners-‐
h`p://www.nokiagrowthpartners.com/
@capenterprise
41
42. 42
@capenterprise
Book
to
come
and
see
Capital
List
for
pitch
reviews,
advice
on
investment
opportuni(es
and
poten(al
introduc(ons
to
investors.
h`p://www.capitallistblog.co/startups/meet-‐capital-‐list/