Department of Information Technology (INTEC) INTEC Broadband Communication Networks research group (IBCN)

Dare to start

Financing Mix

Dr. ir. Wouter Haerick

Ghent University

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Dare to start – Financing Mix

Money should not be the issue

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Dare to start – Financing Mix

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Dare to start – Financing Mix

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Dare to start – Financing Mix

Money, off course, is never just money.

Money, of course, is never just money. It's always something else, and it's always something more, and it always has the last word.

1948 – Paul Auster – Writer/Poet

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Dare to start – Financing Mix

• Financing sources: debt versus equity

• Venture Capital: The VC perspectiveParterning with Venture CapitalistsAlex Brabers – Executive VP at GIMV

• Dos and don’ts in raising capital and how to manage reporting

Jurgen Ingels – CFO & Founder at Clear2Pay

Outline for this session

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Dare to start – Financing Mix

Three ways to finance your startup:

• Debt (vreemd vermogen)Your company promises to make fixed pay-back payments in the future When failing to do so, you lose control of your company …

• Equity (eigen vermogen)Return depends on the cash flow left, after all debt payments

• Sponsorship

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Dare to start – Financing Mix

Sponsorships

FFF

Share profit

Pay-backin time

Debt financing Equity financing

SuppliersCustomers

Business angel

Venture Capitalists

Mind the

obligations

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Dare to start – Financing Mix

Debt financing

• Friends, fools, family (FFF) • WinWinLoan (www.pmv.eu)

• Bank• Guaranteed Loan (www.pmv.eu)

• Bonds (obligaties)

• Your suppliers (late outgoing payments)• Your customers!! (advance incoming payments)• Accounts receivable

Debt financing

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Dare to start – Financing Mix

Equity

• Common stock• Stock owned by the founders

• Preferred stock• Stock owned by the investors • Preferences:

• A higher return• Paid first

Equity financing

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Dare to start – Financing Mix

Hybrid financing

Debt versus Equity

High priority on cash flowTax DeductibleFixed durationNo management control

Debt financing

Lowest priority on cash flowLess Tax DeductibleUndetermined durationManagement controlManagement expertise

Equity financing

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Dare to start – Financing Mix

Financing depends on the stage of your company …

Source: Kmeuhel(en.wikipedia.org/wiki/Seed_funding)

Pre-seed(convertable loans)

Guaranteed Loan

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Dare to start – Financing Mix

Practical sources towards financing:

IWT Vlaanderen – www.iwt.beBAN Vlaanderen – www.ban.beWebsite of VC - e.g. GIMV.beCrowd funding - e.g. www.Kickstarter.com

- e.g. Mymicroinvest.com

Google/YahooLook at the investors of sucessful startupsLook at investors active in your target marketUse your network

Agentschap ondernemenBrochure Risicokapitaal

Per VC fund an overview is given of :- minimal and maximum investments, - focus, region and preferred participation

http://www.chubbybrain.com/http://techcrunch.com/

Startup news

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Dare to start – Financing Mix

• Financing sources: debt versus equity

• Venture Capital: The VC perspectiveParterning with Venture CapitalistsAlex Brabers – Executive VP at GIMV

• Dos and don’ts in raising capital and how to manage reporting

Jurgen Ingels – CFO & Founder at Clear2Pay

Outline for this session