Tag Archives: antonio arias

Startups Finance – How to Present Financials at a Pitch Event

By Antonio A Arias

past present futureAt angel investor forums, it is quite common for entrepreneurs to make the mistake of over selling its projections with little discussion of its past and present financial status. Therefore, the story does not flow and only begs questions distracting us from the value proposition.

Remember: financial investors (unlike strategic investors) are interested mainly on how they will get a return on their capital and when. For a short ten minute pitch, hit the bullet points fast.

Past

How much was invested by the founders and other shareholders? Where did the money go? What were the results or milestones?

Present

What is the status of the business? Sales funnel? Sales traction?

Future

How much funds are needed to move forward? Use of proceeds? Expected results?

The key is to earn the investors’ confidence fast. There is no sense talking about the projections without a quick recount of the past performance and present realities. Unless the business has proven its marketing strategy, reporting on the customer development status is the more meaningful information. Defending a 3 to 5 year financial forecast and valuation is a total waste of time.

Establish instant credibility. Always show a financial forecast starting with the past and the present.

http://www.healthycrowdfunder.com

 

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Top 10 Reasons Investors May Invest in Your Startup

By Antonio A Arias

ashton-kutcher-nyse

Raising capital is a work of art and science. You cannot do one without the other or neither one is more important than the other. It is logic and emotion combined. Other investors have their criteria, I have mine because I have gone through it myself at different stages in my career as a professional business manager in the corporate world and as an entrepreneur. If you are raising capital, it is imperative you understand the investment criteria of your investor targets.

  1. Exit strategy –  you have exited before or you have a clear pathway to exit to return investors’ money with capital gains by a certain time.
  2. Market Problem – you have a huge underserved market with a chronic pain.
  3. Team – you have an extraordinary management team with the tract record and the killer instinct to win its sector.
  4. Product – you have a solution(s) to relieve your customers’ pains; not a solution looking for a problem
  5. Price – You have priced your product where the benefits far outweigh its cost.
  6. Competition – your team and your product possess unmatched competitive edge.
  7. Mission – you lead a mission driven company aligned with values striking a balance of social and financial returns.
  8. Relationship – you build and nurture a longer term relationship with all stakeholders – customers, employees, investors, and partners.
  9. Ownership – investors are aligned with your mission and proud to be part owners or passive partners of your business.
  10. Accelerator – you graduated from an accelerator or incubator group, or have core advisors that are market leaders.

If you are an investor or an entrepreneur what is most important to you and why? Your comments are much appreciated.

 

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Curated by Antonio Ariston Arias, CEO & Co-Founder Healthy Crowdfunder Corp

Wharton Study Finds Crowdfunders Act Similar to VCs

Join us tackle healthcare issues - one of top 8 priorities of AnIdeaNation

Join us tackle healthcare issues – one of top 8 priorities of AnIdeaNation

On the eve of September 23, 2013, a historic day for all of us waiting for this 80 year old Securities Act of 1930s,  it is timely to reprint a study by Wharton professor Ethan Mollick who found that the sophisticated crowd can be as competent and even less biased than the traditional venture capitalists. For the uninformed, tomorrow is a milestone day when the US Securities Exchange Commission lifts the ban on general solicitation to accredited investors only. Welcome to the flat world of finance and marketing. As entrepreneurs, we envision better times ahead.

Highlights of  his findings:

1. Entrepreneurs who demonstrate a history of successful projects or ventures are more likely to be crowdfunded.

2. Entrepreneurs who demonstrate third party endorsements are more likely to be crowdfunded – social proof.

Comments: We have to start with our innermost circle of friends and influence. If the people who know us intimately cannot even support us, we have lots of work to do, before even reaching out to total strangers.

3. It is partially true that entrepreneurs who demonstrate preparedness are more likely to be crowdfunded.

Comments: We emphasize the importance of premarketing, investor relations, and/or public relations work prior to the actual fund raising event. Winning customers or investors is a relationship building exercise. It starts long before we ask for other people’s money either to buy our products or invest in our ventures. It is about building trust and credibility that we will deliver as we say we will.

4. Selected projects are less geographically concentrated in crowdfunding than in venture capital. VC-funded project typically happens in start-up clusters at 70 miles average distance to VCs.

Comments: Hello Silicon Valley, you now have competition with beautiful Vancouver, the land of eternal optimists, health afficionados, yogis, runners, skiers and/or organic food consumers. Crowdfunding is immune to the cluster effect of San Francisco, Boston, or New York. With strong protective but less costly investor protection measures and feature friendly equity platforms for entrepreneurs, the world is indeed flat.

5. Gender is less predictive of selection in crowdfunding than in venture capital.

Comments: Not only is the world flatter, crowdfunding is indeed unisex. Certain studies have found women make for better CEOs or leaders. What about we  immigrants who came to North America just like the early pioneers that left Europe? Crowdfunding  breaks down all political, cultural, or ideological boundaries. At Healthy Crowdfunder, the market we serve will all benefit from the health ventures we support, regardless of creed, race, countries, age, and the list goes on as we destroy biases of dated monarchies. It is not surprising to see so much resistance to crowdfunding in certain circles. It is a battle for survival for ancient fiefdoms. The roadblock is not the SEC. It is the secret powers behind closed doors trying to assert their final control.

Click here to read Professor Mollick’s  Wharton Study Finds Crowdfunders Act Similar to VCs.

Your comments are welcome. Feel free to connect with me Twitter @alamidas.

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September 22, 2013 · 1:02 pm

Where is the VC industry heading? 5 latest trends

world is flatCheck out this blog by Balazs Szabo  – Where is the VC industry heading? 5 latest trends.

With crowdfunding, starting with accredited investors, we are reinventing the venture capital model. The private and public company exchanges or platforms will just be mini stock exchanges of niche markets.

Efficiency, processing speed, transparency, and open culture will render all gatekeepers of information and old schools as relics worth more for the museums of tomorrow.

 

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B.C. Entrepreneurs Turn to Crowd-Funding

social_mediaB.C. Entrepreneurs Turn to Crowd-Funding For New Ways of Financing Startups | BC Business #HealthyCrowdfunder. Click here for article  http://ow.ly/oER39

Comments to Jacob Parry’s article

Please note my comments to Jacob’s article and specified the distinction between accredited and non-accredited investor crowd. Note how we will apply best practices when managing publicly listed companies to private companies. We are simply reinventing the public capital markets. As soon as we involve the crowd, everything is public. As soon as we use OPM – other people’s money, they are entitled to timely full disclosures and best practices of publicly listed companies. We will slash down regulatory compliance costs through use of proprietary technology.

Antonio (Tony) Arias

Jacob – thanks for covering our mission to advance equity based crowdfunding. I wish
to emphasize we are targeting accredited investors first while building a
health fund and the Healthy Crowdfunder platform.

Educating investors about the risks, co-managing and co-developing our investees until
the exit date, and developing proprietary algorithms are some of our
competitive edge.

At our recent crowdfunding meetup I spoke about how Mr Algorithm (high
frequency traders) has taken over the stock exchanges at the expense of SMEs’
access to capital and liquidity. The best antidote is algorithm itself combined
with our creative and entrepreneurial skills. The securities regulators and
securities rules are so far behind what technology can do now. One of our jobs
is to prove to them that technology itself is one of the best weapons against
fraudulent actors. Several KYC (know your clients) and KYP (know your products)
job routines can be automated. Algorithm can also detect anything that is out
of pattern. Think IBM’s Watson.

The broker/ dealers provide only a partial investor protection. The buck stops at
the CEOs, CFOs, and independent directors who report to shareholders, who stand
to lose the most if they don’t perform their fiduciary duties to shareholders.
As the strategic advisers and co-managers of these ventures, we will provide
better protection since for each investee, we are investor/shareholders ourselves.

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SEC Lifts Ban on Advertising to Accredited Investors – Sept 23, 2013

by Antonio Arias

See “SEC Fact Sheet” >http://www.sec.gov/news/press/2013/2013-124-item1.htm
us sec
Significance to Securities Issuers
1. Subject to compliance of Regulation D Rule 506(c) exemption Form D, we can leverage both social and traditional media to reach out to accredited investors and present our value proposition.
2. Now, investors will know we exist. They could start doing their research. Because of technology, there will be traditional and digital conversations from which we can deduce new knowledge. With new knowledge we can connect the dots previously not apparent.
3. We will know our competition. How does their offering stack against ours? If they are better, we got more work to do. In the end, the end user ends up with a better product. We all win if we put our customers’ interest on top. Our customer can be our target strategic investors or strategic partners.
4. It is the perfect opportunity to practice transparency and operate with full integrity. It is an opportunity to build trust and a longer term relationship with our investors.
5. We can find more capital on this round and future rounds if we deliver expected results. More capital will flow to the US at the expense of other countries lagging behind equity crowdfunding.

Significance to Investors
1. For long term investors, the selection of private securities of industries we believe in has just expanded.
2. We will know other investors of common interest and co-invest like a syndicate. Conducting due diligence as a group could save us time and resources if we all collaborate.
3. We are no longer restricted to investing in the volatile public capital markets. The lines dividing the private and public company exchanges will blur and eventually converge.
4. Inclusion of “bad actor” provisions will prevent actors or relevant parties who have been convicted of securities fraud or violations from participating under this new rule.
5. For professional investors like Healthy Crowdfunder, our deal flow sources have just expanded. It can lower our acquisition cost.

Significance to Consumers
1. We can be investors and consumers of the very products we need and believe in.
2. Our choices of quality products have just expanded.
3. We can participate in the creation of innovative products or solutions by the kind of companies we support.

Significance to Securities Regulators
1. We can learn how technology can allay a lot of our fears of investor safety. Technology engineers are listening and will design the relevant algorithms.
2. We will see traditional and social media conversations and will alert us about the trouble spots.

To all positive thinkers, can you think of anything else?

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Riding the Crowdfund Wave – the What How and Why

[Please play this slidecast on your desktop or laptop. At this time Ipad, Iphone, or other mobile does not work with voice]

What is the status of securities rules in the US and in Canada?

What type of equity based crowdfunding is allowed by the SEC? And why might the Canadian regulators might adapt the same?

What can entrepreneurs do now while waiting for the securities rules for non-accredited investor crowd?

How pre-marketing helps find and win customers and investors?

How accelerators/ incubators or mentors give entrepreneurs a marketing edge?

How can entrepreneurs/ investors profit financially and socially from crowdfunding?

Why are we in to crowdfunding?

Why should all investors support crowdfunding? What’s in it for them?

These are only some of the questions we answered. The audience asked more. What have you got for us?

Would you like to find ways you can profit from crowdfunding? Click below and join us at the 2nd Annual Global Crowdfunding Convention and Bootcamp

http://www.eventbrite.com/event/4077614254/Crowdfund/10023262109

 

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