a revolutionary way to raise funds
a revolutionary way to raise funds
NEW FUNDING PLAYERS Presented by Diane Shawe CEO
WWW.AVPTGLOBAL.COM
Diane Shawe M.Ed
Founder and CEO of Academy of Vocational & Professional Training Ltd.
BBA, M.Ed, IEBE,MGHT
Membership: IOD, FSB, PSA, IFL,IEEE Named VIP member by Cambridge Who’s Who: Excellence in Online Training 2012 Entrepreneur, Consultant, Author, Speaker. Winner E.B.B.W. Award 2003
AVPTGLOBAL is a Globally Accredited Academy provider of over 390 Soft Skills courses using a cutting edge online Learning Management system to supply fluid transferable and live curriculum supported by qualified Virtual Tutor Facilitators both in the virtual and traditional learning environment.
Diane Shawe CEO
SIX WAYS TO FUND YOUR BUSINESS! Friday 7th June 2013 13.15pm Category: Finance , Education, Enterprise in Education
NEW PLAYERS IN BUSINESS FUNDING
FUNDING YOUR BUSINESS WITHOUT A BANK LOAN
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CROWDFUNDING
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MICRO LOANS – COMMUNITY SCHEMES
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BORROWING AGAINST ASSETS
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FUNDING CIRCLE
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ENTERPRISE FINANCE GUARANTEE
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GRANTS
7
We need Virtual Tutors and we will pay you
HAVE YOU COMPLETED YOUR BUSINESS CHECKLIST? REGISTER FOR OUR 3 HR BOOTCAMP AT STAND 330 ÂŁ9.99 PER SECTION TODAY 12 STEPS TO PREPARING YOUR BUSINESS DETAILS
1. The Business Plan 2. Developing your USP 3. The Perfect Pitch
YES
NO
With bank lending figures continuing to fall, thousands of entrepreneurs are looking for alternative sources of funding to get their business off the ground
4. Adding Value 5. Calculating your prices & worth 6. Create your brand 7. Design your business process 8. Use Social media 9. The marketing plan
10. Goal Setting 11. Working on yourself 12. Raising the finance Total 3 Hour Bootcamp
YOU WILL NOT SUCCESSFULLY RAISE THE FINANCE FROM ANYONE IF YOU DO NOT HAVE ALL THE ANSWERS IN ADVANCE TO DEMONSTRATE THAT YOU KNOW WHAT YOU ARE DOING!
Looking at the trends What is happening in crowdfunding
• Over 60,000 people have raised millions of dollars on Indiegogo in over 200 countries worldwide.
PITCHING FOR FINANCE THE PRESENTATION
When you are happy with your business plan, it needs to be turned into a professional presentation, which should communicate memorably what the business does. If the core purpose cannot be explained in 30 seconds, the pitch is too complicated and investors will lose interest before the client has a chance to get into the supporting facts and figures.
HOLDING YOUR NERVE THE PRESENTATION
The questions the investors might ask should be anticipated and strong well-researched responses prepared. Once in front of the potential investor, the approach needs to be open and not defensive. There will be detailed questioning and the entrepreneur and his team must be able to demonstrate why their skills and experience will justify the risk the investor is being asked to take
TIME FRAMES How long do you need the money for?
The time frame is also crucial. How long do you have to raise the money?
And what risks are you prepared to take in order to get what you need? For example, are you prepared to use your own money, invest relatives and friends’
1 Crowdfunding Crowd funding and CrowdSourcing What is Crowd Funding
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Crowdfunder is a new way for people to pool small amounts of money to back a good idea or project. If you need funding for a project or idea; Crowdfunder really is a no-brainer.
What is Crowd sourcing
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Today, crowdsourcing has transferred mainly to the web. The web provides a particularly good venue for crowdsourcing since individuals tend to be more open in web-based projects where they are not being physically judged or scrutinised and thus can feel more comfortable sharing.
It enables creative funding The social way
How does crowd funding work
Anyone, anywhere can create an online 'pitch' explaining their project and what they plan to achieve with the money they raise. The Pitch will include 2 important sections: The Target – the total amount of money they wish to raise for their project The Rewards – the benefits that people who donate to a project get in return for their donation (see Rewards section below) Project founders then promote their project to potential funders. Funders then invest money in the project and over a period of time (60 days is the maximum time available to raise the funding required) the funds accumulate until the Target is reached.
How long does it take? How Long can you fund raise for?.
The project founder can choose a duration of 30, 45 or 60 days to raise the Target amount.
What happens when target amount is raised?.
Once the Target is reached, the funds are transferred to the Founder's Bank account. Following this the Founder will begin to distribute the Rewards directly to all contributors.
What happens if target funds Are not raised?
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If the Target amount is not raised within the time period then the Pitch will be closed and all monies will be automatically returned to the Funders' PayPal accounts.
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The target amount represents the amount of money needed for the project to work and be successful. If that amount of money is not raised and the project can't achieve its aims then the Funders wouldn't get their rewards, so no-one wins! So when working out the amount you require for your pitch, don't be greedy, think of a realistic amount that will enable you to get your project running the more achievable the amount, the more likely you are to get the funding.
What happens if You raise more or less
1. Is it possible to raise more than the Target amount?
1. It sure is. The Pitch will stay available for contributions until the end of the funding period. But watch out some crowd funding may charge a higher rate of commission on the extra amount raised.
2. There are no maximum amounts to any
2. Is there a maximum or minimum Target amount?
project, but there is a minimum target amount of ÂŁ100
3. All or nothing rule
3. Most Crowd funding use this model "All or Nothing" funding means they only release the funds to the pitch owner when the target has been reached.
The Process FAQ
Anyone! Crowdfunder allows anyone from any country and of any age to start a project and raise funding. However, we do have some guidelines and every project request will be reviewed to ensure only genuine, honest and legal(!) projects appear on our site.
It is normally free to register as a
project Founder and add a Project to Crowdfunder. When a project Founder successfully raises their Target amount Crowdfunder will deduct a success fee of 5% of the target amount (plus 5% of any excess funds raised). . xt
No there's no maximum amount that a Funder can contribute . However, if you do want to contribute a large amount eg ÂŁ500 or more, this will be arrange by bank transfer instead of a Paypal transaction.
The Process FAQ
No, each project Founder may only have one active Pitch at any time.
Pretty much anything that is legal can be pitched on but each Pitch is thoroughly vetted by the team and Crowd funders reserve the right to refuse any Pitch application that they feel isn't appropriate.
Yes, absolutely. In fact we actively encourage it, we have found that the pitches that have an initial amount invested in them do better - if you don't have the faith in your pitch to place money in it, then why should someone else?.
How do you get your money once Target has been reached?
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Upon your pitch reaching it’s target, usually some paperwork needs to be completed. Once that’s completed the funds are released to you. It is expected that this will be done about 7 days after your pitch completion. The Statement that is raise will explain exactly how much to expect from each channel. Due to the different channels that they receive the money in to, Paypal , Direct Debit and bank transfers, the money will be released in different ways; Paypal -. Direct Debit
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Bank transfer
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2 Micro Loans Raising Small amounts of money Micro-Loans
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If you only need a very small amount of money, you should think about a micro loan, which is tailored to your circumstances and can be used alongside funding from other sources. A number of companies in the UK offer micro loans; for example Finance Wales offers funding from ÂŁ5,000 to ÂŁ25,000, with generous repayment terms ranging from one to five years
Community Schemes
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A plethora of community development finance initiatives, or CDFIs, have been set up around the country to help individuals, and businesses, denied credit by banks and lending companies. CDFIs provide help with everything from bridging loans and working capital to funds for property and equipment purchase, but their terms are usually restrictive; you usually have to be either a micro-business or a social enterprise, and be based in a disadvantaged area to qualify.
3 Borrowing against assets How it works www.borro.com
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Cash is advanced against valuable personal assets, such as jewellery, fine wines and classic cars. Essentially, a business-friendly variation on the age-old pawn shop model. In order to access cash, you agree a value for your car or rings, and hand the items over to the provider. They can be retrieved once the loan has been paid off.
Founder: Paul Aitken
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www.borro.com Here’s how it works: Borrowers can approach borro either through the website or via a financial adviser. The first step is a 10 or 15-minute conversation, during which borro will discuss the available assets and assess whether it will be possible to provide a loan.
3 Borrowing against assets Valuations www.borro.com
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The next step is valuation. “Let’s say it’s a classic car,” It will be collect and valued and a loan offer made. Interest rates are set at 2.49% per month and the average borrowing period is four to five months. No Penalty for early settlement There is no requirement to repay any percentage of the loan before the end of the agreed period, although customers can make the payment early without incurring penalty charges. ideal for businesses that need a short term cash injection
4 Funding Circle Loan from individual lenders The offer and benefits
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Funding Circle offers an online platform that puts small businesses in touch with investors who will lend money. However, Funding Circle’s focus is on term loans that will be paid off over a specified term – typically one to three years. To qualify to raise cash via Funding Circle your company will need to show two years’ worth of accounts filed at Companies House, so it’s not for start-ups
What you need to show
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Businesses as young as two and half to three years can participate. The sums advanced range from £5,000 to £100,000. The average interest rate is currently 8.4%. However, because money is advanced on an online auction basis, businesses perceived as less risky or particularly attractive can secure better deals.
5 Enterprise Finance Guarantee Backed by the Department for business Enterprise and Regulatory Reform What’s on offer
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Backed by the Department for Business Enterprise and Regulatory Reform (BERR) this guarantees a loan of up to 75% of your desired amount, on figures up to £250,000
(if your business has been trading for more than two years) from banks and other financial institutions.
Who is it designed for
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The scheme is generally designed for small firms that have viable business proposals but who have failed to get a conventional loan because they don’t have enough security.
To be eligible you must be a UK company with an annual turnover of no more than £5.6m
6 Grants A one off cheapest form of finance What’s on offer
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This is one of the cheapest forms of finance but beware of the sometimes nonfinancial conditions that maybe attached to the grant.
These could include the number and type of people employed and occasional restrictions on items on which the money can be spent.
Who is it designed for
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Some of these initiatives have their own venture capital funds supported by the Department for Business Innovation and Skills (BIS) which will fund businesses seeking between £50,000 and £250,000. Thousands of other ‘hard cash’ schemes exist and are provided by banks, the EU and other large as well as smaller organisations.
What next How can we help
• Tim is going to explain why we need 200 Virtual tutors and how you can earn £800 month • Register for one of our 3hr business bootcamp seminars/workshops • Check out our other opportunities at stand 330 • www.avptglobal.com • Tel 0203 551 2621