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WIP Yale Entrepreneurial Institute (YEI) Early Stage Capital Yale.

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Presentation on theme: "WIP Yale Entrepreneurial Institute (YEI) Early Stage Capital Yale."— Presentation transcript:

1 WIP Yale Entrepreneurial Institute (YEI) Early Stage Capital Yale

2 WIP Creating the Most Possibilities to Excel Tech Boot Camp Start Something Venture Creation Program Summer Fellowship Program (Accelerator) YEI Innovation Fund 2 YEI is equipped to help students start scalable ventures by providing: 1.Funding 2.Resources 3.Mentors 4.Space

3 WIP 3 ~$2K Growing the Pool of Funds ~$15K ~$100K Academic Year Fellowship Promising start-ups have more opportunities to secure funding Funnel of Start-ups Time Student ventures are eligible for ~ $120K in funding YEI Innovation Fund

4 WIP YEI Funding Success  Started in 2007  More than 70 companies accelerated  3 companies acquired  $70M raised in outside funding  305+ jobs created  YEI grads have gone onto MassChallenge, Ycombinator, TechStars, etc.

5 WIP Successful YEI Teams Panorama Education  Aaron Feuer, Xan Tanner and David Carel  $4M Funding – Google Ventures, Zuckerburg, Yale  School systems engaged with students, parents and teachers participating in highly-focused, digital opinion surveys.  2012 YEI Summer Fellows 5

6 WIP Successful YEI Teams 6 Complex analytics for cloud computing Founded in 2010 by Faculty Member and SOMer 35 Employees Raised $17+ Million Justin Borgman, SOM ’11, YEI ‘10 Dr. Daniel Abadi, Computer Science

7 WIP NSF, NIH Academic Academia Small Business Investors Industry Valley of Death Resources Available ($) Discovery DevelopmentCommercialization Level of Technology Maturity From Angus Kingon Funding Technology Innovation SBIR AngelVenture CapitalSenior Debt

8 WIP Venture Capital Threshold Angel Capital Threshold Economic Development Funds Threshold NSF SBIR/STTR Threshold Technology Risk Market Risk People Risk Finance Risk Friends, Family (and Fools) Threshold What is your Enterprise Risk Profile? Senior Debt Threshold

9 WIP Bootstrap Techniques What you have in your pocket! Pros + Protection of Entrepreneur’s Equity + No Outside Oversight + Low Cycle Time and Transaction Costs + Certain Consulting Activities May Augment Technology Development Cons - Self-Funding Brings High Level of Personal Exposure -Consulting May Dilute Core Development Activities -Licensing May Erode Downstream Revenue Potential -Equity-for-Service Trades Dilute Entrepreneur Ownership

10 WIP Federal and State Funding SBIR, STTR ($3B available annually) and other grants Pros + Non-Dilutive + May Offer Federal Customer Entrée + Potential Adjunct to Development Roadmap and Business Direction + Clear Milestone Expectations + Validating of Technology Direction Cons -Government Funding Sources May Bring Less Business Expertise Than Equity Investors -If Grants Define and Drive Development Roadmap and Business Direction, Cancellation of Requirement Could Leave Business Without a Customer -Generally Insufficient to Bridge “Valley of Death” -May Not Be Anchored to End-User Requirements -Not All States Offer Incentives

11 WIP  BioHaven Event (November)  Office Hours – –Dec. 4, 11 – Merrie London from CT Innovations  SBIR “How To” – February 11-12 *** Additional Resources Available 11 Yale Support for SBIR/STTR

12 WIP Angel Investment >2M individuals w/ Net Worth > $1M “Qualified Investors” May have investment motivations beyond Rate of Return (ROR) Various structures – Angel funds, Individuals, Super Angels Pros + May be Active Advisors + May Assist in Business-Building Activities + Less Structured Monitoring and Control than Venture Capital + Shorter Due Diligence Cycle than Venture Capital + Relatively Loose Terms and Conditions + Option Pool Likely not Required + May be Widely Accessible Cons -May be Active Advisors -Valuation Sensitive -High Expected Rate of Return (ROR) -Limited Ability to Support Follow-On -Availability / Access Subject to Macroeconomic Climate ** TERMS VERY IMPORTANT TO POSITION COMPANY FOR DOWNSTREAM CAPITAL**

13 WIP Venture Capital Private Equity Class Focused on Funding and Building Early Stage, High-Growth Enterprises Pros + Investment Validates Business Plan + Adds Significant Value to Business + Ability to Significantly Assist in Business-Building Activities + Well-Structured Terms and Conditions Designed to Balance Management and Investor Objectives + Assistive in Finding Follow-On Financing Cons -Extensive Due Diligence Cycle -Heavy Company Monitoring and Control -High ROR Expected -Moderately – Highly Dilutive -Expectation of Preferred Stock -Option Pool Required

14 WIP Strategic Partners Any alliance between commercial entities that furthers business interests (Formal to informal) –Financing –R&D –Marketing / Sales / Distribution Pros + Able to Add Meaningful Business Value + Able to Assist in Business Building Activities + Source for Technology, Market, or Business Model Validation + Numerous Industry contacts + Investment from Partner May Be Relatively Valuation Insensitive + Expect Lower ROI + courtship by Prospective Acquirer Cons -Restrictive Terms and Conditions -May Require Certain Preferences to the Business Partner -Can Sometimes Limit Attractiveness of Company for Future Investment

15 WIP Panelists “Advice for Accessing Early Capital” Kyp Sirinakis – Managing Partner, Rock Spring Ventures Adrian Horotan – Principal, Elm Street Capital 15

16 WIP Resources  National Venture Capital Association. Provides listings of venture capital firms and entrepreneur education.  Kauffman Foundation Entrepreneurship Resource Center. Education on the A to Zs of business, including venture capital.  National Associate of Seed and Venture Funds. Provides lists of state venture capital funds and other resources.  Angel Capital Association. Provides lists of angel groups.  Small Business Administration (SBA). Connecticut Innovations CVG

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