global trends in entrepreneurial finance · where’s the money? dilutive sources 4 non-dilutive...
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SEEDLY IS AN EQUITY CROWDFUNDING PLATFORM… THE FIRST FOR ALL AUSTRALIANSWE WILL LAUNCH MORE BUSINESSES THAN ANY OTHER
WWW.SEEDLY.COM.AU
WHAT’S THE BIG PROBLEM?
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USA, $75
AUS, $7.5
Israel, $150
VENTURE CAPITAL $PER CAPITA
FUNDING66%
OTHER34%
AUSTRALIANSMALL BUSINESS
SOURCES: Australia Bureau of Statistics, Australia Innovation Report
WHAT STOPS INNOVATION?
HOW DOES AUSTRALIA COMPARE?
WHERE’S THE MONEY?
DILUTIVE SOURCES
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NON-DILUTIVE SOURCES
EQUITYCROWDFUNDING
ANGELINVESTORS
VENTURECAPITAL
STOCKMARKETIPO
CREDIT CARDBANK LOAN
PEER-PEERLENDING
DEBTCROWDFUNDING
MINIBONDS
CONVERTIBLENOTES
PARTNERS
SUPPLIER CREDIT
GRANTS
REWARD/DONATIONCROWDFUNDING
EQUITY DEBT OTHER
EMERGING TRENDS IN ENTREPRENEURIAL FINANCE
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1. The VC industry is shifting at the biggest and smallest ends of the market.
2. Online platforms—for crowdfunding, angel syndication, and lending—are increasingly important options for seed-stage and early-stage startup needs.
3. Sources of capital are emerging outside of traditional geographical hubs.
4. Women are playing more decision-making roles in entrepreneurial capital.
5. There is robust experimentation with differentiated capital models.
GLOBAL MARKET DATA
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$1.5TGLOBAL ENTREPRENEURIAL INVESTMENT FUNDS:
82% Personal (loans, lines of credit)16% Friends and Family2% Venture Capital and Crowdfunding
SOURCES OF FUNDS:
ALTERNATIVE FINANCE MARKET
• ness registrations (show that the demand is getting bigger
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ASIA PACIFIC (EX CHINA)
SOURCES: The Asia-Pacific Alternative Finance Benchmarking Report, 2016, Cambridge University
CHINA ($USD)
VENTURE CAPITAL GLOBAL RANKINGS
• ness registrations (show that the demand is getting bigger
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• Leading Venture Capital by region
• Venture Capital Investment often seen as a marker for innovation.
• Australia poorly ranked
• ness registrations (show that the demand is getting bigger
RESEARCH COMMERCIALISATION IN AUSTRALIA
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$1.8B in successful exits from Australian university research projects
Irish Drug Group, Shire,acquired Melbourne based drug developer Fibrotech Therapeutics (scar tissue therapy) for $500M
Drug giant Novartis acquired Brisbane based pain relief company, Spinifex for $1B.
Hatchtech (head lice tech) $280M deal with Indian firm to commercialise product.
TRENDS: EQUITY CROWDFUNDING / CROWDCUBE
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238Avg investors per
campaign (UK)
$762kAvg funds per campaign (UK)
Asia-Pacific Region (excluding China) Average Amount Raised in an Equity Crowdfunding campaign 2015 USD = $778,000 USDIn China, the average raised via ECF = $2.24m, Cambridge University
400kRegistered investors
525Successful raises
£1MIn 60 secondsFastest Raise
WHY EQUITY CROWDFUNDING
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"I CAN'T TELL YOU HOW BAD THE WHOLE AUSTRALIAN VENTURE COMMUNITY IS, THE ANGEL COMMUNITY IS, THEY ARE JUST NASTY”
GORDON BELLINTERNET & COMPUTING INDUSTRY PIONEER
27 DAYSAvg days to fund (UK)
£600k +Avg funds per campaign (UK)
49% ROI*Across 375 deals at Seedrs (UK)
400,000Investors members on Crowdcube
TAX BREAKS ACCESSMore investors, more deals
A SHORT HISTORY OF EQUITY CROWDFUNDING
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UKFirst ECF platform
launches 2011: Crowdcube
USA Opens broader ECF regulations
May 2016
NZ Opens ECF
regulations July 2014
AUSECF regulations
proposed in parliament 2015
£147million
UK ECF market 2015
AUSECF regulations go
live, Sept 2017
2011 2015 2017
CASE STUDIES
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CREATE A WINNING PITCH
• What problem do you solve? For who?
• How do you make money?
• What traction do you have?
• Why are you different?
• Who’s in the team?
• What are their roles?
• What skills, experience set you apart?
• What advisors & partnerships do you have?
• How big is it? What are the trends?
• What’s your go to market strategy?
• Competitors (Porters 5 forces)
• PESTEL analysis
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THE IDEA
THE TEAM THE VIDEO
• Be direct & concise
• Be personable
• Be specific & give examples… eg ’46% faster than competitors processes’
• The first thing many investors look at
• Make it professional, make a connection
• You’ve got 30 seconds to win them over
• Don’t go longer than 3 minutes
• If you can’t afford motion graphics & animations, put a (good) person on camera
• First impressions count, be professional
• Strong logo and website
• An active Facebook and Twitter presence
LANGUAGE
YOUR BRANDTHE MARKET
An overview and comparison of new forms of entrepreneurial finance
New player Debt or equity Investment goal Investment approach Investment target
Active or passive Non-financial support
Accelerators (and incubators)
Depends on type of accelerator/ incubator
Financial, strategic, political (depends on type of accelerator/incubator)
Active Management support, training, network access
Early stage start-up
Angel networks Equity Financial Active Management support, network access
Early stage start-up
Crowd
- Debt-based Debt Financial Passive None Early stage start-up or project
- Donation-based – Social Passive None Social venture or project
- Reward-based – Product-related Passive, Sometimes active
Sometimes product testing
Early stage start-up or project
- Equity-based Equity Financial Passive, sometimes active
Advocacy, market & product testing
Dependant on legislative rules. Typically early stage start-up or Series A growth stage.
Corporate venture capital (CVC)
Equity Financial, technological, and strategic
Active Management support, technology support
Early and later stage start-up
New player Debt or equity Investment goal Investment approach Investment target
Active or passive Non-financial support
Family offices Equity Financial Mostly passive Little Later stage start-up
Governmental venture capital (GVC)
Debt or equity Financial and governmental Mostly passive Little Early and later stage start-up
IP-based investment funds
– Financial Passive None Patents
IP-backed debt funding
Debt Financial Passive IP-based start-ups and established mid-sized firms
Mini-bonds Debt Financial Passive Established mid-sized firms
Social venture funds or social venture capital
Debt and equity Financial and social Active Management support, network access
Social ventures
University-managed or university-based funds
Mostly equity Financial and university-related Active Management support, network access
Academic and student start-ups
Venture debt lenders or funds
Debt Financial Passive None Later stage start-up
Source: Block, J.H., Colombo, M.G., Cumming, D.J. et al. Small Bus Econ (2017)