Finance for startup | Presentation @ 8e Colloque des Clubs Etudiants Entrepreneurs

Xavier Corman | Martin van Wunnik 1 07/02/2012 Xavier Corman 1 16/03/2013

Finance for Startups

Xavier Corman


Finance for Startups

• Introduction

• Company Setup• Accounting• Financial Plan• Funding your startup• Valuation / Dilution


Who I am ?

Xavier Corman


This presentation is available for free:

http://www.slideshare.net/xaviercorman




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

Xavier Corman | Martin van Wunnik 6 07/02/2012 Xavier Corman 6 16/03/2013 6

Company Setup


Why should I ?

Limit your liabilities !Professional touch

Fiscal 34% Succession

...

Formalities & some costs (bank, notary, KBO/CBE, social secretary)

Double entry accountingRevisor for in-natura contributions


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


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)


Hats/PersonalitiesFounders – Shareholders

(Board)

Owners

CEO (gérant/zaakvoerder)

General Manager

Directors

CxO

Employees

Founders:3 years responsibility


Accounting: notions

• Balance Sheet – Bilan – Balans

• Profit & Loss – Compte de résultat – Winst-en Verliesrekening

• Cash-flow – Trésorerie – Schatkist

• Financial Plan – Plan financier – Financieel Plan


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


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


Financial Plan

Content– Assumptions– Profit & Loss– Balance Sheet / Investment– Cash-Flow -> Cash needed

– Valuation of the project– Profitability / return of the project


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 ?


Financial Plan in 10 min /questions

What are your revenues ?

What are your costs ?

What are your investments ?

How many persons for your project ?


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


Financial Plan / Tips for assumptions

• Office: 25 m²/person• Price of offices: EUR 100/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…


Financial Plan / Profit & LossRevenues (Sales…)

COGS (Cost of Sales)

General Expenditures

Personnel Costs

Depreciation

Financial cost

Profit

COSTS

CASH-FLOW IF NEGATIVECASH

DRAIN


Financial Plan / Investments

List all your scheduled investments

YEAR 1

YEAR 2

YEAR 4

YEAR 3

YEAR 5


Required Cash-Flow


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’


http://www.ideaowl.com/blog/2011/06/microconf-2011-3-surprises-and-learnings-from-best-conference-ever/


How to finance your start-up ?

EquityLT DebtsST Debts

FFF

B A

V C

Crowd

Public

Banks

Shareholders

Clients

Suppliers

Banks

Shareholders


Valuation

• The value of any business is the present value of the future income stream

• You sell future virtual profits for present real money


Valuation

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Sweat Money

Exit Money

Catch-up Te

chniques


Valuation - What is dilution ?

Start 1st Round 2nd Round0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

85%68%

51%

15%

12%

9%

20%

15%

0.25

VC 2VC 1BAFounder(s)


Questions & Answers

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Economy & Finance

Finance for startup | Presentation @ 8e Colloque des Clubs Etudiants Entrepreneurs