funds: traidtional: govt grants (free) -extreme difficult and time consuming to get.

only for suitable industries Business angels -Use their exp and network to help u develop ur business - want a significant share of ur biz and want high return on investoment and wan t to see real products and servoces and customers before willing to invest venture captial frms (even more demanding) -want all of the above wants high level MBA management Ideal financing model 1. govt grant for prototype and pilot cust (ideal) <<normally self-funded--boots trapping (using own money and resource to start ur own business--how 99% of biz get started) 2.angel investors to get a solid cust base and cash flow 3. venture capital and grow company into large enterprise 4.public offering so that all investors can cash out few biz that fit this model Advantages of boot strapping and increase success rate: Bootstrapping is an organic, self-sustaining CREATIVE approach to entrepreneursh ip that minimises personal and financial risk +Eliminate unwanted outside partners +Preserving equity in business Example of bootstrapping: -NOT bootstrapping raise 20 million in venture capital, build a factory, hire 3000 employees, spend 4 million on a UK wide TV campaign -bootstrapping Make a few pairs of shoes and try to sell then. WIth the profit and feedback frm customers, change the design and make more pairs of shoes and sell them... + allows the overall business model to be refined as you go along, rather than a fter a big investment has been made (correct mistakes early and avoid financial disaster) + to prove without a doubt that you have a viable business model +once you have proven that the business is viable, finances will come to you. -have to have an unshaken belief and confidence in the product that they are sel ling + easy to Throw money away if u start ur venture with too much money. 101 ways t o spend money wrongly but only a few ways to spend it correctly. Stage of venture development and funding Rsource/ capital requirements: (not just cash)--includes intangible factors as w ell -financial (money) -physical( plant, office and laboratory space) -intellectual (intellectual property) -human (skills, experience and aptitude) -social (networks) What do u look for in a gd investment: Good recognition Solutions to customer needs/ pain Main dealbreakers 3 categories

-Management (impt)-ability of the teamto realise that they may lack a full team, quailty which in cludes quality track recprd -Must have realistic expectations about their market/ sales and have done their research on ctheror customers -Must be able to earn money. Management must have realistic valuation of their c ompany and not an inflated version. Valuation: They wants to make at least 10 times the investment if the company su cceed. -Discounted cash flow, create financoial model which shows cash flow of the busi ness. However involves a lot of assumptions. What makes the presentation stands out: -clearly address investor's concern and clear layout. Not large proposal. Straightforward Need to know how it address cust's needs, not just how technology/ idea works.