Fund raising for entrepreneurial venturing

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Fund raising for entrepreneurial venturing

• By
• Dr. Wilton Chau
• Managing Partner
• QLeap Venture Fund
• Adjunct Professor, CUHK

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About Wilton CHAU

• Over 24 years experience in venture capital and
  direct investment industry
• Managing Partner in QLeap Venture Fund
• Investment committee member of SHC Capital
  (insurance company listed in Singapore)
• Director of Guangzhen Rail Co. Ltd., listed in
  New York, Shanghai and Hong Kong
• Director of several unlisted companies invested
  by QLeap Venture Fund
• Lead Consultant Incubation Program, HK Sci Park
• Adjunct Professor Pro-doc Fellow of the Centre
  of Entrepreneurship, CUHK

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About me?

• Buy side 24 years
• Sell side 10 years
• Successful fund raising 5 cases (pre-revenue)
• 1 project per 2 years
• amount HK 1 40 million

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Sources of fund

• Seed
• Own savings
• Family, friends and fools
• Government
• Application Research
• Research institution (universities, ASTRI)
• Own savings
• Government (SERAP, HKSTP)
• Angels

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Sources of fund

• Start-up
• Own money
• Government
• Angels
• Early stage
• Angels
• VCs
• Industrial partners

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Fund raising -SEVEN Crucial Elements

1. A valid business model
2. An executable business plan
3. Investment proposals
4. Powerful presentations
5. QA
6. DD files
7. ???

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1. A Clever Business Model

• A feasible one?
• A scalable one?
• Require change in infrastructure?
• A high growth one?
• A proven model?
• How to prove the model at the beginning?

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2. An Executable Business Plan

• Vision vs Imagination
• Big enough?
• Clear?
• Direction?
• Identified risks hurdles
• Come with solutions?
• Limited resources, limited time
• out-sourcing
• Betrayal - financial projections

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3. Investment Proposals

• A marketing document (20 pages)
• Tailor-made to each investor (the buyer)
• Must have an OFFER
• How much are you raising?
• What is the stake being offered?
• Other terms (a term sheet)
• Exit strategy
• Functions of time-line
• Differences between IM / BP / IP
• An outstanding one!

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4. Powerful Presentation

• In line with the investment proposal
• 10 20 minutes ppt
• Flow along the theme(s)
• Prototype
• Skills
• Serial position effect
• Storytelling

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5. Q A

• Very important to inexperience team
• Not related to Gaps setting
• First page list of questions in groups
• Completed answers to all expected questions
• as detail as possible, no restriction on length
• dont refer to other materials unless necessary
  except to particular documents in DD files for
  proof
• Can be part of the Investment Proposal
• Problem only experienced people can tell
• Gap setting

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6. DD Files

• Organized in the following sections
• Legal (including patents technology)
• Financials
• Assumptions their justifications
• Past financial statements (audited)
• Contracts
• Milestones and achievements
• Numbers the key documents

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7. ???

• In terms of a successful fund raising
• Items 1 to 6 contribute one third
• Item 7 contributes another one third
• --- Thank you! ---