Understanding Funding

Mike Lee, P. Eng., MBA, CFAmlee@fundica.com

Are You Fundable?

Types of Funding

Financial Motivation

Expected Return

Expected Revenue

Business Model

Key Consideration

Tax Credits Pre-defined na na na Tax LawGrants Societal na > $0 Reasonable Best In LinePublic Loans Societal 5 - 10% > $0 Reasonable All FactorsPrivate Loans ROI 5 - 20% > $30K Security Assets & CFAngel Investors ROI >15% <<$100M Believe it Cash to CF+Venture Capital ROI >25% > $100M Traction Time to Exit

Systematic Funding Steps

Commercially Viable Product &

Market?Cash-in-hand?

Gov’t funding?(tech, young, hiring)

CF history of assets?

Apply for gov’t funding

Seek cash injection1. Love money, angel2. Bootstrap

STOP

Apply for bank loans

Additional capitalization

Seek Angel or VC

Yes Yes Yes

No

NoNo No

Build team

Core Team?

No

YesYes

No

Yes

END

At Each Funding StepIdentification / Validation• Up-to-date, comprehensive system• Validate before pitching/application

Pitching (Application)• Prepare (executive summary, deck,

financials)• Execute

Closing the Funding• Make sure to close

Traditional Funders

Entrepreneurs

Internet Bots

Dedicated Researchers

Advisors

Funding Identification

Fundica - Leveraging Technology and the Crowd

Pitch Deck Content

Structure Your Content• Problem you are looking to solve (simple,

concise)• Market potential (size and growth rate,

metrics)• Your solution (advantages, value to add)• Business model• Go to market strategy• Competition• Financial projections• Existing structure and progress to date• Funding sought

Pitch Format and Q&A

Presentation • Be yourself, engaging, prepared• Concise, complete, clear message• Slides - max 15 slides, min font size 18

Question and Answers • Focus on questions, do not repeat

presentation• Okay to say “I am not sure”• Concise, short answers • Allow time for multiple questions• Build rapport

Closing the Funding

Understand the Investor• Understanding the investor’s motivation and

limits• Learn about the investor’s past

Build Respect • Always create deal competition• Share information and build trust• Allow for reasonable give and take

Move the Deal to Close• Patiently move deal towards closure• Trigger reasonable close dates• Find funding then structure deal

Thank You!

Mike Lee, P. Eng., MBA, CFAmlee@fundica.com

Executive Summary

Executive Summary

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Executive Summary

Executive Summary