STARTUP! Managing a start-up in a down market. Markus Latzel, CEO Palomino System Innovations Inc. who we are, what we do, how we make money

Transcription

1 STARTUP! Managing a start-up in a down market Markus Latzel, CEO Palomino System Innovations Inc. Outline About Palomino Inc. who we are, what we do, how we make money Expectations about your start-up What is a typical entrepreneur s expectations Considerations What to consider before you start The Business Plan How to spot an opportunity, how to present it, how to make money off it 1

2 Outline (contd) Funding Government, Friends & Family, University, Angels, VC, Banks, Managing your Start-Up Finance, Funding, Tax, HR, Legal Work Growth Where re you going? Exit Get out?! WARNING (participation encouraged) Why start a start-up? 2

3 About Us Palomino Inc. founded to develop WebPal, a Web Application Development Platform Spun off an original idea at the Centre for Vision Research at York U Currently 7 FT employees 100+ clients Offices: Toronto, Calgary, Germany Recently first acquisition: 360 MediaWorx Inc. Expectations Be your own boss Have a great idea The only one who knows how to do/produce a certain thing Have a patent If I/my brother/mr T. needs it, everybody must?! Free work schedule Get rich fast Little work Enjoy working in small groups Work from home Recognition Personal Achievement 3

4 Consider before Starting Which Personality Type are you? (There is no right one!) Leader vs. Thinker Social Butterfly vs. Persistent Pragmatist Do you need/have a partner? Ideal partnership has two founding partners that complement each other Share the vision, negotiate on the mission. Don t lose a friend! Are you ok with giving up control in the future? Investors will take it away Think of a safety-net Can you afford it? Expect at least 1 year ZERO income Patience, Patience, Patience Got the connections? Do you have/can you access funding, advise, technical know-how, etc, etc, etc The Business Plan Should be the first step to start a company (but typically is drafted when funding is needed) Lives, i.e. undergoes constant changes Is a roadmap, captures your vision of the business Forces you to follow a structured process Takes on different shape according to the recipient Real Plan BP Bank BP VCap BP Angel 4

5 Components of a Business Plan Quick, catchy summary Vision of the company founders Mission of the company Product description Market Size Evaluation Competitive Analysis Marketing Strategy Gantt Chart Financial Projections (!!!!) $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Total Resercher Market Revenue Total SME Market Revenue Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q $- Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Funding How much funding is really needed? Always consider all possible sources of funding, cash and in-kind Family & Friends Don t lose family or friends over a start-up! Government & Universities lots of opportunities check all available sources: NRC, IRAP, CITO, PRECARN, BDC, Young Entrepreneurship, Ontario Centres, etc, etc Make sure to check the process first can take a long time 5

6 Funding Angel Investors Are Entrepreneurs themselves Want to be involved, i.e. understand the product and technology Personal investment, typical less than $1Mio Venture Capital Funds Similar to banks Usually don t understand the technology as much Hands-off approach Take a large % of the company shares Banks BDC, Credit Card, 2 nd Mortgage, Business Loan Managing your Start-Up IP Protection: Incorporation Get a lawyer you feel comfortable with Do it online Is it necessary? Patent Use a lawyer or don t do it. Trademark Online, lawyer, whatever. Just get it. Develop a Presence Logo, name, business cards, web site Tell people you are up to something big Dress up a notch (but only a notch) 6

7 Managing your Start-Up Finances Tax Personal vs. Company keep them separate! Do it right from day one: File expenses gather receipts Mark down hours Keep Inventory Do first tax filing yourself just have an accountant check it over Apply for all Tax Credits possible: SR&ED, Ontario Innovation Credit Example: on $50,000 spent for development, you can get $32,500 in cash back! Managing your Start-Up Managing The Team Hiring Every employee can make or brake the company Test-drive your employee hire on contract first Find innovative ways to hire, without head hunters Consider Co-Ops (from outside Canada?) Take your time to hire Check references - personally Firing This is never easy A healthy company has a 10% turnaround every year Keep the company goal in mind Training Experts are hard to find! Give time learning You are the teacher Consider investing in training seminars We all appreciate learning more 7

8 Growth Looking for: Exponential growth of Revenue Market Analysis WHO are the customers WHERE are they WHAT is their pain Do they have money, can they buy immediately WHO is their current supplier Growth (continued) Cost Analysis Research & Development Costs Marketing Costs Overhead (Hardware, Office, Licenses, Stock, machinery) Training Competitive Analysis WHO are the competitors Are they in the same market How fast can someone become a competitor 8

9 Growth (continued) Market Cost Competition EXIT Cost Analysis Research & Development Costs Marketing Costs Overhead (Hardware, Office, Licenses, Stock, machinery) Training Competitive Analysis WHO are the competitors Are they in the same market How fast can someone become a competitor 9

10 THANK YOU! Markus Latzel Palomino System Innovations Inc. Phone x