Stphane Foliard UIT Roanne France and Ron Beirens

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 1 ENTREPRENEURSHIP AND COMMUNICATION IN MULTICULTURAL TEAMS The funding issue

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 2 Rationale • This is not a textbook ppt • The source comes from experience and discussions with Entrepreneurs and some limited theoretical findings. • But this also has limitations. This is not an exact science. • You have to find out by yourself.

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 3 Content • Do you really need funding? • The alternative ways to fund your company-non banking • From your family to business angels • The funding plan • Your needs • The options • Initial funding

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium Typical sources of funding • The pecking order theory (Myers and Maljuif) • Firms prefer internal financing. • Second best: debt • Venture capitalist and business angels • Open the capital, to sell equity 4

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium Typical sources of funding • Equity • Angels • Accelerators • Seed, Venture Capital • Growth, Private Equity • Public Markets • Others • Bootstrap • Friends and family • Debt • Grant, subsidies • Alternatives • Crowd funding 5

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium Funding strategy • You do the job first • Then, you know if you should even raise money. • If you don’t know, the answer is no • No need • Personal: risk aversion, lifestyle, control (King vs rich) • Business: small potential • Not for profit 6

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 7 Wait and learn • Very young and top talent? Do not start a business. • http: //www. standaard. be/cnt/dmf 20180225_03376902 • Today, Maxime Coutte a 16 year (old) young French citizen no longer wants to start a business. That is something for later. Our goal today is to have fun, "he says. We want to democratize VR. I realized that I am still young and have a lot of time to learn. Being able to learn without pressure is something valuable. I want to make things I love, and they are useful', he adds. • Three times guessing what that will lead to. Maxime: ' There is a good chance that I will become an entrepreneur anyway'. • Translated with www. Deep. L. com/Translator

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 8 Not going to the bank Why? • FACT BOX: LOANS FROM THE BANK IN FLANDERS • • In Flanders 3 out of 10 starters didn’t even go for a loan from the bank. From the 7/10 others 50% got a total refusal and 10% a partial refusal. • So 35% of the starters population gets a full loan and 7% a partial loan from the bank. • Source: Netto, De Tijd, October 2016 (Dutch) • • Scarce articles in newspapers suggest that (HORECA) Hotels, Restaurants and pubs (Café) have almost no chance to get a loan from the bank.

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium Graph starters Starters and banks Got a refusal 28% Didn't go for a loan 30% Partial loan 7% Full loan 35% 9

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium You may not need financing Why You are only using (spare) time No capital involved You will do it as a second income 10

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 11 Self financing Advantages Free You are the king, independence Disadvantages Limited amount You are alone, no advice, no network It needs a good cash strategy All in (very little room for pivot)

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 1 Bootstraping • The best money is customer’s money • Internal cash flow • Focus on customers and not on investors • Dangerous …because 12

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 13 2 FFF (friends, family, fools) and crowd funding and incubators • 2. 1 Some countries have special forms of tax relief for this type of funding (find out). • Belgium has Win-win loan, a friend or relative that gives you a loan can deduct it from his taxes to a certain extent. • Other have tax shelter (Belgium) where a third person can deduct up to 30% of his taxes. • Your country has…. . • 2. 2 Crowd funding and –lending • Several types

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 2. 2 Crowd funding and –lending Several types 14 Direct Indirect Funding (participation-share) Deliver products (goods) if the required funds can be raised (clothing, furniture. . ) Not enough funding = refund Lending (loan) Crowd funding platform is a cost

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 15 2. 2 Crowd funding and –lending Danger Funding (participation-share) shares can be sold to a third party who could become a major shareholder

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 16 2. 2 Incubators What? Business incubators are organizations geared toward speeding up the growth and success of start-up and early stage companies. They're often a good path to capital from angel investors, state governments, economic-development coalitions and other investors.

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 2. 2 Incubators Example paradox Paradoxically a Belgian Bank KBC is taking incubator initiatives: http: //startit. be 17

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 18 2. 2 Incubators Advantages Community: a dynamic eco-system of start-ups, scale-ups, incubators, accelerators, mentors, Venture Capitalist’and expert partners Knowhow: develop your skills at the start-up academy Mentorship and coaching: get advice through 1 -on-1 sessions with experts and mentors Hands-on support: Housing and infrastructure Connections: partnerships with organizations and corporates with the same pay -it-forward mentality Center stage: will put you into the public eye through our communication channels and let you take the spotlight at our events

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 19 3 Look for venture capitalists-business angels What Business angel is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors invest online through equity crowd funding or organize themselves into angel groups or angel networks to share research and pool their investment capital, as well as to provide advice to their portfolio companies

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 3 Business angels • A wide variety of amount • A few thousand to a … few million • Convertible debt or equity • Individuals • Generally affluent (Bernard Arnault) • Experienced advice • Angel network • Networks of connections • Professionally organizer – cohesive • Fund centric model • Clarity and speed of process 20

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 21 3 business angels Advice • in order to find a business angel the best is • to invest time in networking with (local) entrepreneurs (Chambers of Commerce, or other national organisations) in your neighbourhood and these networks know people who have the capital to invest • an entrepreneur who sold his business, usually doesn’t put his money on a savings account by a bank for many reasons. But be careful don’t give too much away, someone with deep pockets might copy your idea.

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 22 3 Look for venture capitalists What Venture capital funds are investment funds that manage the money of investors who seek private equity stakes in startup and small- to medium-sized enterprises with strong growth potential. These investments are generally characterized as high-risk/high-return opportunities.

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium Venture capitalist • Seed : € 100 k to € 1 -3 m • A to IPO • €millions, multiple rounds • Stage dependent participation, involvement • Active (board seat) • Passive (follow “lead” investors) 23

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 24 Be realistic • Whether it be Business Angels of Venture Capitalists they are hard to convince if you don’t have a track record or excellent business plan

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 25 4 Government support/fundng • Unemployment remains a huge issue • Programs to stimulate jobs and entrepreneurship Via new ideas and companies • Find them: • Grants: money given without any need to repay • Tax credits: keeps money in your business • Special loans: like grants with small payback • Special bank warrantee: facilitates the loans

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium Relationships and money • As simple as possible ! • Funders receive ‘ 000 s of plans • They are not engineers • They research Partnership • Triangulate ways to connect • Find someone who knows the financier • Get a warm introduction • Interact on line • Use your initiative! • 26

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 27 5 EU Funding • Commission focuses its efforts on: • business start-ups by unemployed and people from vulnerable groups • support for social entrepreneurs • microfinance. • and seeks to: • increase knowledge about entrepreneurship and self-employment • build capacity in EU countries and regions • support entrepreneurship financially. • • http: //ec. europa. eu/social/main. jsp? cat. Id=952 • Network trough the European Entreprise Network find out what’s interesting for you don’t forget to network through local business networks • http: //een. ec. europa. eu • •

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium First contact advice • Establish • WHO you are (relevant experience) • WHAT do you do (uniquely well for who) • WHY does it matter (market opportunity) • Investors are really busy • Limit agenda, control the discussion, get the first meeting! • Tell your story • Build momentum! 28

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium Funding plan 29

Stéphane Foliard UIT Roanne France and Ron Beirens Vives Flanders Belgium 30 What can we expect from you? • ASSIGNMENT • • Make a funding plan (see below): that gives you some direction towards funding. What types of funding will you explore/consider now and in future?