Raising Capital, Doing Deals: Building a Business Lecture 4
Today, I attended a Building a Business lecture by Paul Fisher of Advent Ventures (who blogs at www.thecoffeeshopsofmayfair.com) on raising capital, which was the last Building a Business lecture before the Christmas break. As always, here are the lecturer’s slides:
-
VC is good for some firms and bad for others
-
success e.g. Skype
-
highly disruptive business.
-
binary proposition
-
rising market
-
-
not a success if
-
not the right type of business
-
not the correct risk appetite
-
you don’t want dilution
-
-
the cost of raising money for business are, in order of cost,
-
cash flow
-
debt
-
equity
-
and the most expensive type of equity is VC
-
-
-
by accepting VC, you are committing yourself to the VC’s risk profile – i.e. high risk.
-
more and more VC are seeing the attractions of “growth capital” - principally being driven by the recession.
-
VC’s look for
-
10x return
-
scalable business model
-
an exit within 5 years
-
a great team
-
a potential market which is large and high growth
-
an unfair advantage
-
a commercial lead
-
a cracking product
-
a robust IPR
-
-
confidence – in what you want, knowledge of the business.
-
-
Business plans aren’t important – back of the envelope will do.
-
NEVER cold call or cold mail!
-
Run investor conversations in parallel not in series
-
