Finance for startups - 2013 kick-off
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Xavier Corman | Martin van Wunnik 1 20/02/2013 Xavier Corman | Martin van Wunnik 1 20/02/2013
Finance for Startups
Martin van WunnikXavier Corman
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Xavier Corman | Martin van Wunnik 2 20/02/2013 Xavier Corman | Martin van Wunnik 2 20/02/2013
Sponsors
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Xavier Corman | Martin van Wunnik 3 20/02/2013 Xavier Corman | Martin van Wunnik 3 20/02/2013
Finance for Startups
• Introduction
• Company Setup• Accounting• Financial Plan• Funding your startup• Valuation / Dilution
• Q&A
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Xavier Corman | Martin van Wunnik 4 20/02/2013 Xavier Corman | Martin van Wunnik 4 20/02/2013
Who are we ?
Martin van Wunnik
Xavier Corman
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Xavier Corman | Martin van Wunnik 5 20/02/2013 Xavier Corman | Martin van Wunnik 5 20/02/2013
This presentation is available for free:
http://www.slideshare.net/XavierCorman
http://www.slideshare.net/FinanceCoach24
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Xavier Corman | Martin van Wunnik 6 20/02/2013 Xavier Corman | Martin van Wunnik 6 20/02/2013
Creativity level
Finance & Accountinglevel
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Xavier Corman | Martin van Wunnik 7 20/02/2013 Xavier Corman | Martin van Wunnik 7 20/02/2013 7
Creativity level
Finance & Accountinglevel
Reality check
Funding Value ?
Investments, Costs, Revenues, Cash
Financial Plan & Elevator pitch
Organization/CompanyTeam/Partners
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Xavier Corman | Martin van Wunnik 8 20/02/2013 Xavier Corman | Martin van Wunnik 8 20/02/2013
Creativity level
Finance & Accountinglevel
1.000 EUR
21% VAT(quarterly or monthly refund
request/compensation)
Investments
Cash out: 1.210 EURCash in: 210 EUR (>3m)
Profit impact: 200 EUR over 5y
Cost
Cash out: 1.210 EURCash in: 210 EUR (>3m)Profit impact: 1.000 EUR
Discounted Cash Flows
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Xavier Corman | Martin van Wunnik 9 20/02/2013 Xavier Corman | Martin van Wunnik 9 20/02/2013
Why Finance for Startups ?
If you don't think about the future,you cannot have one.
John Golsworthy
where you want to go
how you are supposed to go
You need to know
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Xavier Corman | Martin van Wunnik 10 20/02/2013 Xavier Corman | Martin van Wunnik 10 20/02/2013
CASH
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Xavier Corman | Martin van Wunnik 11 20/02/2013 Xavier Corman | Martin van Wunnik 11 20/02/2013 11
» Why should I ?
» Capital
» Hats/Personalities
Company Setup
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Xavier Corman | Martin van Wunnik 12 20/02/2013 Xavier Corman | Martin van Wunnik 12 20/02/2013 12
Why should I ?
Limit your liabilities !Professional touch
Fiscal 34% (24% for 3y)Succession
...
Formalities & some costs (bank, notary, KBO/CBE, social secretary)
Double entry accountingRevisor for in-natura contributions
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Xavier Corman | Martin van Wunnik 13 20/02/2013 Xavier Corman | Martin van Wunnik 13 20/02/2013 13
Minimum capital
REAL minimum = Business required !
Legal
BVBA-SPRL (min.1)CVBA-SCRL (flexible)
18.550 EUR 6.200 EUR(or 12.400 EUR)
SA-NV (min.2):
61.500 EUR
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Xavier Corman | Martin van Wunnik 14 20/02/2013 Xavier Corman | Martin van Wunnik 14 20/02/2013 14
Shareholders Control (>51%)
Absolute / Relative majority40% - 60%
40% - 10% - 10% -10% -10% -10% -10%
Voting RightsClass A & B
Minority (blocking) interest
Investors per phase (dilution)!
Stock options:fiscal implications, buyer required
vesting conditions : targets, period (4y)
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Xavier Corman | Martin van Wunnik 15 20/02/2013 Xavier Corman | Martin van Wunnik 15 20/02/2013 15
Hats/PersonalitiesFounders – Shareholders
(Board)
Owners
CEO (gérant/zaakvoerder)
General Manager
Directors
CxO
Employees
Founders:3 years responsibility
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Xavier Corman | Martin van Wunnik 16 20/02/2013 Xavier Corman | Martin van Wunnik 16 20/02/2013
Accounting: notions
• Balance Sheet – Bilan – Balans
• Profit & Loss – Compte de résultat – Winst-en Verliesrekening
• Cash-flow – Trésorerie – Schatkist
• Financial Plan – Plan financier – Financieel Plan
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Xavier Corman | Martin van Wunnik 17 20/02/2013 Xavier Corman | Martin van Wunnik 17 20/02/2013
Accounting: Balance Sheet
Non Current Assets(Actifs Immobilisés/
Vast Activa)
Equity (Capital/Kapitaal)
LT Debts
ST Debts
Current Assets (Actifs circulants/Vlottend Activa)
ACTIVE PASSIVE
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Xavier Corman | Martin van Wunnik 18 20/02/2013 Xavier Corman | Martin van Wunnik 18 20/02/2013
Accounting: Profit & Loss (P&L)
Revenues (Sales…)
COGS (Cost of Sales)
General Expenditures
Personnel Costs
Depreciation
Financial cost
Profit
Gro
ss m
argi
n
EBIT
DA
Adde
d Va
lue
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Xavier Corman | Martin van Wunnik 19 20/02/2013 Xavier Corman | Martin van Wunnik 19 20/02/2013
Financial Plan
Content– Assumptions– Profit & Loss– Balance Sheet / Investment– Cash-Flow -> Cash needed
– Valuation of the project– Profitability / return of the project
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Xavier Corman | Martin van Wunnik 20 20/02/2013 Xavier Corman | Martin van Wunnik 20 20/02/2013
Financial Plan in 10 min
• Don’t waste your time in developing a huge financial plan before to be sure that your project is viable !
• In many case, in less than 10 minutes, you can see if your idea worth something.
• How to make a very quick financial plan ?
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Xavier Corman | Martin van Wunnik 21 20/02/2013 Xavier Corman | Martin van Wunnik 21 20/02/2013
Financial Plan in 10 min /questions
What are your revenues ?
What are your costs ?
What are your investments ?
How many persons for your project ?
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Xavier Corman | Martin van Wunnik 22 20/02/2013 Xavier Corman | Martin van Wunnik 22 20/02/2013
Financial Plan / Prerequisites & Assumptions
• Financial plan for 3 to 5 years
• Monthly or Quarterly base
• Excel or Calc is your friend
• Start by listing your main assumptions
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Xavier Corman | Martin van Wunnik 23 20/02/2013 Xavier Corman | Martin van Wunnik 23 20/02/2013
Financial Plan / Tips for assumptions
• Office: 25 m²/person• Price of offices: EUR 150/m²/year + 15 % for
maintenance• Insurances: 1 % of revenues• Marketing: define a % of revenues + starting
investment• Don’t forget lawyers, accountant, social
secretary, office supplies…
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Xavier Corman | Martin van Wunnik 24 20/02/2013 Xavier Corman | Martin van Wunnik 24 20/02/2013
Financial Plan / Profit & LossRevenues (Sales…)
COGS (Cost of Sales)
General Expenditures
Personnel Costs
Depreciation
Financial cost
Profit
COSTS
CASH-FLOW IF NEGATIVECASH
DRAIN
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Xavier Corman | Martin van Wunnik 25 20/02/2013 Xavier Corman | Martin van Wunnik 25 20/02/2013
Financial Plan / Investments
List all your scheduled investments
YEAR 1
YEAR 2
YEAR 4
YEAR 3
YEAR 5
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Required Cash-Flow
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Xavier Corman | Martin van Wunnik 27 20/02/2013 Xavier Corman | Martin van Wunnik 27 20/02/2013 27
Funding
Some remarks
Principles
Options
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Xavier Corman | Martin van Wunnik 28 20/02/2013 Xavier Corman | Martin van Wunnik 28 20/02/2013 28
And entrepreneurs? They seem to have confused the definition of entrepreneurship altogether.
Entrepreneurship, they mistakenly believe, equals financing!
This is wrong.
Over 99% of entrepreneurs who seek funding get rejected.
Yet, the entire world is focused on the 1% that is "fundable."
http://www.readwriteweb.com/start/2012/01/the-other-99-of-entrepreneurs.php
Funding, ‘Financing’
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Xavier Corman | Martin van Wunnik 29 20/02/2013 Xavier Corman | Martin van Wunnik 29 20/02/2013
http://www.ideaowl.com/blog/2011/06/microconf-2011-3-surprises-and-learnings-from-best-conference-ever/
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Xavier Corman | Martin van Wunnik 30 20/02/2013 Xavier Corman | Martin van Wunnik 30 20/02/2013 30
Interest – Returns
100 102 Bank100 0..1000 Stock market
100 100 F.F.F.100 107 Bank100 130 BA / VC
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Xavier Corman | Martin van Wunnik 31 20/02/2013 Xavier Corman | Martin van Wunnik 31 20/02/2013 31
100+7=107 Bank
Principal & Interest
Able to pay back over time
Guarantees
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Xavier Corman | Martin van Wunnik 33 20/02/2013 Xavier Corman | Martin van Wunnik 33 20/02/2013
Valuation
• The value of any business is the present value of the future income stream
• You sell future virtual profits for present real money
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Xavier Corman | Martin van Wunnik 34 20/02/2013 Xavier Corman | Martin van Wunnik 34 20/02/2013
Valuation
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Sweat Money
Exit Money
Catch-up Te
chniques
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Xavier Corman | Martin van Wunnik 35 20/02/2013 Xavier Corman | Martin van Wunnik 35 20/02/2013
Valuation - What is dilution ?
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Xavier Corman | Martin van Wunnik 36 20/02/2013 Xavier Corman | Martin van Wunnik 36 20/02/2013
Questions & Answers
Free download :
http://www.slideshare.net/XavierCorman
http://www.slideshare.net/FinanceCoach24