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ADM 3313FinancingYour VentureStephen Daze
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Financing: Debt, Equity and Boottrapping
1! Debt: cah no" #or repay$ent %"ith interet&'ater!
(! Equity: cah #or a piece o# the buine!
3! Boottrapping: piecing it together on youro"n!
http:))"""!youtube!co$)"atch*+-./02#DyE
http://www.youtube.com/watch?v=U470xXKfDyEhttp://www.youtube.com/watch?v=U470xXKfDyEhttp://www.youtube.com/watch?v=U470xXKfDyEhttp://www.youtube.com/watch?v=U470xXKfDyE8/9/2019 ADM3313B Financing Your Venture
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1! Debt Debt: cah no" #or repay$ent %"ith
interet& 'ater 4oan 4ine o# credit Mortgage 5redit card Etc!
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5haracteritic Money 'ent to you "ith epectation o# it
being returned "ith interet6er$ are deter$ined in ad+ance Di7erent ban8 ha+e di7erent product
9 but they are a'' pretty i$i'ar
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Ban8 5onider the Fo''o"ing1! epay$ent Abi'ity
;hat e+idence eit to con+ince $e erona' ?nancia' ituation!
(! Manage$ent;hat e+idence eit that indicate that thi peron can $anagehi)her a7air "e'' enough to a''o" the opportunity #or paybac8*5redit hitory*
3! >erona'
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5anada S$a'' Buine Financing:
http:))"""!canadabuine!ca)eng)
Buine De+e'op$ent Ban8:http:))"""!bdc!ca)en)>age)ho$e!ap
Ban8: http:))"""!roya'ban8!ca)buinde!ht$'
http:))"""!tdcanadatrut!co$)productCer+ice)ban8ing)indeCban8ing!p
http:))"""!cibc!co$)ca)$a''Cbuine!ht$'
Sources of financing
http://www.canadabusiness.ca/eng/http://www.bdc.ca/en/Pages/home.aspxhttp://www.royalbank.ca/busindex.htmlhttp://www.tdcanadatrust.com/products-services/banking/index-banking.jsphttp://www.tdcanadatrust.com/products-services/banking/index-banking.jsphttp://www.tdcanadatrust.com/products-services/banking/index-banking.jsphttps://www.cibc.com/ca/small-business.htmlhttp://strategis.ic.gc.ca/epic/internet/insof-sdf.nsf/vwGeneratedInterE/Homehttp://strategis.ic.gc.ca/epic/internet/insof-sdf.nsf/vwGeneratedInterE/Homehttps://www.cibc.com/ca/small-business.htmlhttps://www.cibc.com/ca/small-business.htmlhttp://www.tdcanadatrust.com/products-services/banking/index-banking.jsphttp://www.tdcanadatrust.com/products-services/banking/index-banking.jsphttp://www.tdcanadatrust.com/products-services/banking/index-banking.jsphttp://www.royalbank.ca/busindex.htmlhttp://www.royalbank.ca/busindex.htmlhttp://www.bdc.ca/en/Pages/home.aspxhttp://www.bdc.ca/en/Pages/home.aspxhttp://www.bdc.ca/en/Pages/home.aspxhttp://www.canadabusiness.ca/eng/http://www.canadabusiness.ca/eng/http://www.canadabusiness.ca/eng/8/9/2019 ADM3313B Financing Your Venture
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Su$$er 5o$pany:
http:))"""!ontariocanada!co$)ontcan)1$edt)$a''biz)en)byeu$$ercoen!p 5anadian Youth Buine Foundation
http:))"""!cyb#!ca)
http://www.ontariocanada.com/ontcan/1medt/smallbiz/en/sb_ye_summerco_en.jsphttp://www.ontariocanada.com/ontcan/1medt/smallbiz/en/sb_ye_summerco_en.jsphttp://www.ontariocanada.com/ontcan/1medt/smallbiz/en/sb_ye_summerco_en.jsphttp://www.cybf.ca/http://www.cybf.ca/http://www.cybf.ca/http://www.cybf.ca/http://www.ontariocanada.com/ontcan/1medt/smallbiz/en/sb_ye_summerco_en.jsphttp://www.ontariocanada.com/ontcan/1medt/smallbiz/en/sb_ye_summerco_en.jsphttp://www.ontariocanada.com/ontcan/1medt/smallbiz/en/sb_ye_summerco_en.jsphttp://www.ontariocanada.com/ontcan/1medt/smallbiz/en/sb_ye_summerco_en.jsp8/9/2019 ADM3313B Financing Your Venture
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(! Equity Equity: cah #or a piece o# the buine
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Venture 5apita' Fir$ peci?ca''y deigned to poo' 'arge u$ o#
$oney and in+et in ri8y aet c'a
Ha+e 4i$ited >artner in their #und to report to Ha+e to in+et the $oney or return it Speci?c buine $ode' peci?c type o# dea' Ha+e a peci?c criteria re'ated to:
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Venture 5apita' ey roce
Due Di'igence Va'uation
6er$ Sheet
Eit
Entrepreneur 5onideration "nerhip I 4ong ter$ o"nerhip %eit& 5ontro'
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Ange'
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Ange'
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Deciion 5riteria #or ercei+ed in+etor ?nancia're"ard R .
Kiche $ar8et 1N
6rac8 record o# entrepreneur 10 11* Angel Investing Osnabrugge & Robinson
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6he Funding Food 5hain
14
SeedCapital
Financing
$
Start UpFinancing
FirstStage
SecondStage
Mezzanine BridgeFinancing
Types
SourcesPersonal
o!e MoneyAngels
Angels Angels VentureCapital
VentureCapital
VentureCapitalBanks
"P#
FinancialMarkets
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More
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3! Boottrappingo >iecing it together on your o"n@
o A $ean o# ?nancing a co$panythrough the creati+e acquiition andue o# reource "ithout raiing cah#ro$ independent in+etor
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Q: ;hat "ere o$e trategie you uedduring the 5ah F'o" eercie that he'ped
you preer+e your cahG and ban8account ba'ance*
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Diad+antage May not generate enough cah to gro"
at the deired rate 4i$it potentia' a'e, $ar8et hare and
o+era'' co$petiti+e poition >ro+ide inuUcient upport #or high
gro"th and capita' inteni+e buinee
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Strategie #or Succe
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4e+erage Po+ern$ent>rogra$
%ro+incia' >rogra$ 4oo8 #or:
Fed De+ ntario Minitry o# Econo$ic De+e'op$ent and
E$p'oy$ent
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Pet operationa' quic8'y Pet up and running rather than "aiting
#or the ho$e run 4oo8 #or cah generating product or
er+ice, i!e! conu'ting by day 6a8e on opportunitie that $ight not be
part o# the trategic p'anG
A buine that i $a8ing $oney bui'dcredibi'ity
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Po ?nd a cuto$er each out to cuto$er #ro$ day one
Pet out and e'' be#ore the product iready
-e perona' paion and a'e$anhipto ubtitute #or big $ar8eting budget
7er product "ith tangib'ead+antage o+er co$petitor
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eep gro"th in chec8 Epand at a rate that you can contro'
Manage "ithin your ?nancia' $ean
Faci'itate de+e'op$ent o#$anage$ent 8i'' under 'e preure
FirtC$o+er ad+antage are o#tenhortC'i+ed
eep your ?nger on the pu'e o#per#or$ance
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Focu on cah 5ah i 8ing 9 not pro?t, $ar8et hare or
other $etric
5reate hea'thy $argin #ro$ day one Say noG to 'o $a8ing trategie to
bui'd $ar8et hare or a cuto$er bae
-ndertand cah To" 9 cah poition,
$onth'y burn, ti$e'ine
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For$ a''iance #or Mar8et penetration
Sa'e)$ar8eting channe'
>roduct credibi'ity
Woint bidding on proect
Acce'erate ti$e to $ar8et
Peographic epanion Buine eperience
Enhance co$pany tatu
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;or8 "ith 5uto$er A8 cuto$er to prepay #ee or pro+ide
ad+ance
Pet cuto$er to #und cuto$ization "or8%and 'et you o"n the &
De'i+er in+oice "ith the good, payattention to co''ection
DonOt do buine "ith dead beat and
drea$er Mar8et "ith no $oney 9 "ebite, biz card,
tradeho", co'd ca''
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;or8 "ith Supp'ier Supp'ier:
A8 #or credit Dea' "ith er+ice pro+ider #or 'o"
rate Ma8e ue o# be'o" $ar8et rent pace Barter your product or er+ice DonOt abue the$
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Boottrapping $ethod ha+e +ariou'e+e' o# +a'ue potentia' and app'ication
Your tea$: Forgo, reduce or de'ay co$penation
%"eat equity& E$p'oy re'ati+e and #riend at be'o"
$ar8et a'arie 4oo8 #or +o'unteer and coCop tudent >ay "ith toc8 or toc8 option ;or8 #ro$ ho$e
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You: -e perona' a+ing, credit card and
'oan Forgo, reduce or de'ay co$penation
%"eat equity& ;or8 #ro$ ho$e
De+e'op product at night and "ee8end"hi'e "or8ing e'e"here
;ear 'ot o# hat
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ther: Buy ued equip$ent %auction& Borro" equip$ent #ro$ other
buinee Share buine pre$ie "ith other no" "here to a+e and "hen to
pend E'i$inate unneceary ependiture
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Financing ption1! Debt: cah no" #or repay$ent %"ithinteret& 'ater!
(! Equity: cah #or a piece o# the buine!
3! Boottrapping: piecing it together onyour o"n!
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