Preface
Acknowledgments
Chapter 1
Finance for Start-Ups 101
Fundraising Stages
Pre-Funding Period
Seed Funding Stage
Series A Funding Stage
Series B Funding Stage
Risk/Return
Types of Funding
Private Equity
Debt Funding
Alternative Types of Funding
Public Funding
Incubator/Accelerator Programs
Capital Structure
Intellectual Property (IP)
Valuation
Asset-Based Valuation Models
Pro-Forma Based Valuation Models
Comparable-Based Valuation Models
Strategic-Based Valuation
Exit Strategy
Summary
Chapter 2
Know Your Investors (“KYI”)
KYI #1: Their primary objective is to make money.
KYI #2: There are many types of investors, each with different expectations and capabilities.
Types of Investors
Investment Criteria
KYI #3: Prospective Investors are looking for Success Traits.
“Skin-in-the-Game”
Innovation
Defined Target Market
Value Proposition
Commercial Viability
Risk Mitigation Factors (RMF’s)
Burn Rates
Strength of Management
Use of Funds
Traction
KYI #4: Money is not enough. A prospective investor needs to be evaluated based on their suitability as a strong business partner.
“Know the Space”
Non-Financial Advantages
Alignment of Interests
Issues of Control
Summary
Chapter 3
Business Planning From a Strategic Financial Perspective
Value of a Business Plan
Composition of a Business Plan
Executive Summary
Defined Problem & Solution
Product/Service
Value Proposition
Marketing Plan
Management Team
Strategic Partners
Operational & Expansion Plan
Company Objectives
Current Positioning & Traction
Risk Factors
Financials
Exit Strategy
Business Plan Customization
Marketing Plan
Operational & Expansion Plan
Company Objectives
Financials
Exit Strategy
Rudiments of Composing a Business Plan
Summary
Chapter 4
Financial Planning for Maximizing Returns
Importance of Having a Financial Plan
Assistance in Overall Business Planning
Ensuring the Health and Integrity of Capital Structure
Determining Sufficient Funding Amounts
Securing Funding in a Timely Manner
Securing Funds on the Most Favorable Terms
Determining Appropriate Responses to New Challenges & Opportunities
Instills Discipline and Maintain Focus
Maximizing ROI upon Execution of Exit Strategy
Formulating a Financial Strategy
Financial Objectives
FREE (Fund-Raising Effectiveness & Efficiencies)
FREE Measurement Tools
Composition of Financial Plan
Rules of Thumb
Summary
Chapter 5
Successful Fund Raising
Planning Funding Presentations
Prospectus Materials
Executive Summary
Business Plan
Funding Proposal
Private Placement Memorandum (PPM)
Shareholder Letter
Technology Brief
Demonstrations (a “Demo”)
Market Trends & Research Report
Other Miscellaneous Prospectus Materials
Different Types of Presentations
Elevator Pitch
Lobby (Power Point) Pitch
Conference Room Pitch (Formal Presentation)
Summary
Chapter 6
Becoming a Formidable Negotiator
Pre-Negotiations
Letter of Intent (“LOI”)
Non-Disclosure Agreement (NDA)
KYI Research & Inquiries
Leverage
Negotiating Capital
Due Diligence
Due Diligence Checklist
Due Diligence Response
Actual Negotiations
Term Sheet
Negotiation Approaches
Best Practices & Tactics
Points of Negotiation (Terms)
Have a Negotiating Plan
Concluding Negotiations
Successful Conclusion of Negotiations
Unsuccessful Conclusion to Negotiations
Post-Mortem of Negotiations
Summary
Chapter 7
Establishing an Investment-Grade Organization
Corporate Governance
Attributes
Benefits of Good Corporate Governance
Corporate Governance Best Practices
Corporate Governance Structures
Ethical Behaviors
Stakeholder Relations
Summary
Chapter 8
Financial Decision-Making for Optimal Performance
Financial Decision-Making Process
Practicing sound corporate governance
Understanding of Existing and Potential Decision-Making Dynamics
Managing Financial Expectations
Financial Decision-Making Structures
Establishing appropriate decision-making bodies and procedures
Allocating Decision-Making Authority & Responsibilities
Placing Individual Decision-Makers to the Appropriate Decision-Making Bodies
Financial Decision-Making In Practice
Strategic Financial Planning/Fund-Raising
Budgeting
Operational (Day-To-Day) Financial Decision-Making
Financial Dealings with External Parties
Exiting
Summary
Afterword
Appendix A
Sample Financial Plan
Appendix B
Sample Funding Proposal
Appendix C
Dictums of Entrepreneurial Finance
Glossary
About the Author
About the Website
Index
