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Acquiring Financial Resources Technology Entrepreneurship Class GIMPA April 2007

Acquiring Financial Resources Technology Entrepreneurship Class GIMPA April 2007. Fine tuning. Before we get into the nitty-gritty of this presentation, let’s do a bit of fine-tuning to make sure the message comes out right…. Where to Source Financial Resources.

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Acquiring Financial Resources Technology Entrepreneurship Class GIMPA April 2007

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  1. Acquiring Financial ResourcesTechnologyEntrepreneurship Class GIMPAApril 2007

  2. Fine tuning • Before we get into the nitty-gritty of this presentation, let’s do a bit of fine-tuning to make sure the message comes out right…

  3. Where to Source Financial Resources • Financial Resources (money) go wherever desirable products and services are found • Soft money: family & friends, angel investors; hard money: banks, credit unions, venture capitalists • Expensive money: high interest debt; “cheap” money: long term equity

  4. Real Money Needs Real Structures • A worthy vessel is needed for a worthy cause • The scheduling of repayment of investments and reporting of profits may require specific management skill; this will be demonstrated through complex projections • Corporate governance structures give investors some confidence that their money will be put to good use and that their returns will be managed and delivered

  5. Track Record • For the new business, the track record of the promoters is a key factor in attracting funding for the venture • For a going concern, the existing business track record helps demonstrate potential [to investors] • Demonstration of market insight (with figures) may help compensate where specific track record is absent

  6. Personal Investment • Most investors want to know how much the promoters have put into the venture • The smaller your personal investment, the smaller the share you retain after others invest • Structure “friendly” investments as part of your personal investment

  7. Strong Branding • When a financier/financial institution recognizes your brand, they’re more comfortable promoting your request • Brand recognition gets you attention when you go out cold calling for an opportunity to make a presentation

  8. Financial Reporting • Income Statement: net income • Cash Flow Projection: net cash • Balance Sheet Projection: net worth • 1 year, 2 years, 5 years • Unlike what you’d imagine, you need these reports even more than your potential investors do

  9. What Do Financial Reports Demonstrate? • Fundamental understanding of your business • How long it will take to break even • What your profit margins are likely to be • How much money you need (and when you’ll need it)

  10. Summary • Determine the structures required to support your business • Have detailed financial models in your business plan that describe how your business will perform • Strive to aggregate a significant personal investment

  11. Q & A

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