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Exploring the essential components of a business plan, this guide delves into various financing options for start-ups. It discusses motivations for entrepreneurship, such as financial gain, personal fulfillment, and the desire to effect change. Drawing on extensive experience since 1994, the article covers diverse funding sources, including venture capital, angel investors, and self-financing. The impact of different financing strategies on business planning is highlighted, emphasizing the importance of matching funding types with business needs, market conditions, and founder characteristics.
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Building your business plan Financing options
The main questionWhy ? • Varies reasons: • Make money ? • Self fulfillment, interest ? • Vision, need to change the world ? • Can not fit to other environments ?
How to Finance a start-up:My own perspective • Entrepreneur since 1994 • (playing with models…) • Phonet (sold in 1998) • Septier (president and CEO) • Cellebrite • Libercell
Financing strategies • The business plan is highly influenced by your financing strategies: • Financing path • How much and when • Who will be your partners • VC’s, angels, projects etc..
Various alternatives to fund a start-up • VC’s • Industrial partners • Angels (the three F’s) • Projects • Self financing
Professional InvestorsMajor factor – portfolio strategy • The founders have one “baby”, professional investors have a portfolio… • Time perspective (7Y…) • Thus, decision making is very different: • Risk taking • Exit strategy • Commitment to survival
VC’s are only one option in the tool box… • Some of the most successful companies in the world and in Israel are not VC backed… • Microsoft… • Amdocs • Teva • …
VC’s • Portfolio driven • Time perspective • Deep pockets • Involved • Example – Chromatics… Cisco.. A partner rather then an investor Fits to very difficult technological tasks with very high risk and potential… my perspective – Phonet Business plan impacts – presentation is everything. extensive excellware …
Industrial partners • Have their own agenda • Can provide support • Financing • Real life experience • Market assistance Fits to very experienced entrepreneurs with “real” product My perspective – Septier Business plan impact – real life, no bullshit…
Angels • “stupid money” – the three F’s • Limited involvement • Limited support Most of them are history…
ProjectsIn the main area of activity… • Diversion • Longer time to market • Hands on • Control Fits to very experienced entrepreneurs with a project type product My perspective – Libercell Business plan impact – a few excel shits, extensive cash flow control
Self financing • Low budget products • High market need • Specific advantage to the entrepreneurs • Longer time to market • Control My perspective – Cellebrite Business plan impact – cash flow is everything…
Life cycle combinations • Start with own limited resources… • Get relevant project to add resources • VC or Strategic partner • IPO… Self financing Project VC or SP Exit
SummaryMy view • Various ways to make it happen • Depended on: • Product • Technology • Market • Founder characteristics Find your own way…