How funding works and which are the investors in Europe. What is equity capital (seed investment, business angel, venture capitalist, crowd funding) and loan capital. Other funding sources (announcements, acces to credit).

1. Funding request
Frieda Brioschi / Emma Tracanella
frieda.brioschi@gmail.com / emma.tracanella@gmail.com
IED, 14 May 2019
Lesson 11/2019

2. 11. Funding request
Course program
1. Start-ups
2. Business Model & Canvas
3. Value Proposition Design
4. Customers & Market
5. Activities & Costs
6. Legal basics
7. Start-up in Italy & ecosystems
8. Design & planning
9. Pitch & Launch
10. Going Lean
11.Funding request
!2

3. 11. Funding request
Funding: how does it work?
!3

4. 11. Funding request!4
http://notes.fundersandfounders.com/post/80955964963/money-to-start-how-much-money-companies-started-with

5. 11. Funding request!5
https://www.slideshare.net/nicolamattina/fundraising-101-75856237

6. 11. Funding request!6
https://www.slideshare.net/nicolamattina/fundraising-101-75856237

7. 11. Funding request!7
By Kmuehmel, VC20 - https://commons.wikimedia.org/wiki/File:Startup_financing_cycle.svg, CC BY-SA 3.0

8. 11. Funding request
Welcome in the EU
!8 http://startupeuropeclub.eu/eu-funds-and-support/

9. 11. Funding request
Startup Europe
!9 http://startupeuropeclub.eu/about-us/
Startup Europe is an initiative of the European Commission.
The 4 main objectives of Startup Europe are to:
• Connect people such as startups, investors, accelerators,
female entrepreneurs, corporate networks, universities etc.
• The Startup Europe Map, a map which connects all startup
players in the European ecosystems, is part of this.
• Connect local startup ecosystems by supporting regional
initiatives such as Startup Europe Week or Startup Europe
Regions Network.
• Help startups soft-land in other markets such as Silicon
Valley, India, Africa and The United Arab Emirates.
• Celebrate entrepreneurs’ success

10. 11. Funding request
Investment in Europe /1
!10
On a cumulative basis since 2013, the UK has attracted
$26 billion in total capital investments, just under 2x as
much as Germany that ranks second with $13.6 billion.
Those two countries, together with France, account for
almost 60% of total capital invested in Europe since the
start of 2013.
https://2018.stateofeuropeantech.com/chapter/investors-investment/article/capital-flows-geography-and-industry/

11. 11. Funding request
Investment in Europe /2
!11 https://2018.stateofeuropeantech.com/chapter/investors-investment/article/capital-flows-geography-and-industry/

12. 11. Funding request
Investment in Europe /3
!12 https://2018.stateofeuropeantech.com/chapter/investors-investment/article/capital-flows-geography-and-industry/
There is a high level of industry diversity in terms of where
capital is being invested in the European tech ecosystem
at scale.
The dominant industries in 2018 are fintech, software for
enterprise applications, digital health and transportation,
all of which are on track to be in excess of $2.5 billion in
total capital invested in 2018.
Beyond those four industries, there are a further four
industries that will all surpass $1billion in capital invested
this year.

13. 11. Funding request
Investment in Europe /4
!13 https://2018.stateofeuropeantech.com/chapter/investors-investment/article/capital-flows-geography-and-industry/

14. 11. Funding request
Investment in Europe /5
!14 https://2018.stateofeuropeantech.com/chapter/investors-investment/article/capital-flows-geography-and-industry/

15. 11. Funding request
Investment in Europe /6
!15 https://2018.stateofeuropeantech.com/chapter/investors-investment/article/capital-flows-geography-and-industry/

16. 11. Funding request
Types of financing
!16

17. 11. Funding request
Types of financing
• Equity capital
• Debt capital
• Other sources
!17

18. 11. Funding request
Equity capital
• Ownership
• Willingness to take risk
• No interest and repayment
• Profit at exit (maybe…)
!18

19. 11. Funding request
Equity Capital - Sources
• Parents, friends, …
• Incubators
• Accelerators
• Equity Crowdfunding
• Business Angel (individual, network)
• Venture Capitalist
• …
!19

20. 11. Funding request
Seed Fund
• From Idea to Prototype - to support the business until
it can generate cash of its own, or until it is ready for
further investments
• Higher risk
• Not only $$ (mentorship, location, contacts,…)
• 500startups, Ycombinator, Techstars, SeedCamp
• Dpixel, M31
!20

21. 11. Funding request
Business Angels
• Individuals, known as angel investor too, who provide
capital usually in exchange for ownership equity
• Sometimes organized into angel groups or networks
• Typically invest their own funds
• Exit strategy in 3-5 years
!21

22. 11. Funding request
Venture Capital
• A type of private equity; provided by firms or funds
• Venture capitalists take on the risk of financing risky
start-ups in the hopes that some of the firms they
support will become successfuli
• The first round of institutional venture capital to fund
growth is called the Series A round
!22
https://en.wikipedia.org/wiki/Venture_capital

23. 11. Funding request
Crowdfunding
• Crowdfunding is the collective effort of individuals who
network and pool their money, usually via the Internet,
to support efforts initiated by other people or
organizations
• Interest and repayment starts immediately
• No ownership
!23

24. 11. Funding request
Crowdfunding: how does it
work?
!24

25. 11. Funding request
Crowdfunding models
• Donation based - donate money to support a cause
• Reward based - non-monetary rewards, often a
product or a pre-series item.
• Social lending or peer-to-peer lending - receives an
interest rate in exchage
• Equity based - receives shares of a company
!25

26. 11. Funding request
Kickstarter
!26 https://www.kickstarter.com/help/stats

27. 11. Funding request
Kickstarter - success
!27 https://www.kickstarter.com/help/stats
Most successfully funded projects raise less than
$10,000, but a growing number have reached six,
seven, and even eight figures.

28. 11. Funding request
Kickstarter - unsuccess
!28 https://www.kickstarter.com/help/stats
Funding on Kickstarter is all-or-nothing in more ways
than one. While 13% of projects finished having never
received a single pledge 78% of projects that raised
more than 20% of their goal were successfully funded.

29. 11. Funding request
Equity crowdfunding in Italy
• In July 2013 Italy became the first country in Europe to
implement a complete regulation on equity-
crowdfunding.
• National registry for crowdfunding operators.
• Only for innovative startup
!29

30. 11. Funding request
StarsUp
• Equity based
• Is the first Italian portal authorized by Consob for the on-
line collection of risk capital by innovative startups.
• It offers support towards the management of the project to:
• start-ups requiring capital;
• investors;
• start-ups that have already raised the needed capital.
!30

31. 11. Funding request
Unicaseed
• Equity based
• First investment company in the registry special
section (bank and sim).
• Evaluation process
• Tutoring and support for the startup management
(before and after)
!31

32. 11. Funding request
Loan Capital
• Low willingness to take risk
• Interest and repayment starts immediately
• No ownership
!32

33. 11. Funding request
Loan Capital - Sources
• Banks
• Real Estates Funding
• Guarantee Schemes (through banks)
!33

34. 11. Funding request
Other Types
• Grant and Awards
• Funds
• Leasing
• Factoring
• Negotiate payments terms
• Sponsorships
!34
http://www.slideshare.net/bendtsen/financing-your-business

35. 11. Funding request
Bootstrapping your startup
business
!35
https://www.profitbooks.net/funding-options-to-raise-startup-capital-for-your-business/
https://medium.com/swlh/follow-the-money-how-to-get-startup-funding-4dffa15ef415

36. 11. Funding request
Crowdfunding As A Funding
Option
!36
https://www.profitbooks.net/funding-options-to-raise-startup-capital-for-your-business/
https://medium.com/swlh/follow-the-money-how-to-get-startup-funding-4dffa15ef415

37. 11. Funding request
Get Angel Investment In Your
Startup
!37
https://www.profitbooks.net/funding-options-to-raise-startup-capital-for-your-business/
https://medium.com/swlh/follow-the-money-how-to-get-startup-funding-4dffa15ef415

38. 11. Funding request
Get Funding From Business
Incubators & Accelerators
!38
https://www.profitbooks.net/funding-options-to-raise-startup-capital-for-your-business/
https://medium.com/swlh/follow-the-money-how-to-get-startup-funding-4dffa15ef415

39. 11. Funding request
Get Funding From Business
Incubators & Accelerators
!39
https://www.profitbooks.net/funding-options-to-raise-startup-capital-for-your-business/
https://medium.com/swlh/follow-the-money-how-to-get-startup-funding-4dffa15ef415

40. 11. Funding request
Raise Money Through Bank
Loans
!40
https://www.profitbooks.net/funding-options-to-raise-startup-capital-for-your-business/
https://medium.com/swlh/follow-the-money-how-to-get-startup-funding-4dffa15ef415

41. 11. Funding request!41
https://www.slideshare.net/nicolamattina/fundraising-101-75856237

42. 11. Funding request!42
https://www.slideshare.net/nicolamattina/fundraising-101-75856237

43. 11. Funding request
A GUIDE
“Fundraising Field Guide”
A donation-based field guide for
Founders looking to raise funds for
early stage high-growth companies.
http://fundraisingfieldguide.com/
!43

44. 11. Funding request
Networking!
!44

45. 11. Funding request
Tips
• Looking for funds requires a lot of time
• Not every moment in the year is good for funding
• A huge amount of money can be invested by few
persons. Look for this super investors!
• Many dates will bring you nothing
!45