Tuesday, August 13, 2019

“Boost for Female Entrepreneurs As Virgin Startup Makes 50/50 Funding Pledge - Forbes” plus 2 more

“Boost for Female Entrepreneurs As Virgin Startup Makes 50/50 Funding Pledge - Forbes” plus 2 more


Boost for Female Entrepreneurs As Virgin Startup Makes 50/50 Funding Pledge - Forbes

Posted: 13 Aug 2019 02:20 AM PDT

Linda Grant and Andy Fishburn of Virgin Startup

Source - Virgin Startup

According to a recent study commissioned by the U.K. Government,  just one in three of Britain's entrepreneurs are female? Why does that matter to Britain's policymakers? Well, assuming the findings of the Alison Rose Report are correct, if women were to start and scale businesses at the same rate as their male counterparts, the U.K. economy would enjoy a £250 billion boost.

When the report landed in March of this year, the Government responded by setting a target - or to be more precise, an ambition - to add around 600,000 female entrepreneurs to the business-owning community by 2030.

Now that's unlikely to happen unless some of the barriers that stand in the way of female entrepreneurship are removed. As the report points out, women in Britain don't lack entrepreneurial ambition, but they are half as likely as men to start an enterprise. What's more, female-led businesses are on average smaller than those founded by men and they are less likely to scale up.

So what are the hurdles? Well, the report cites - among other things - a bias towards male founders within the VC/Angel/Funding market - and a more general lack of support and advice.

The question is, what can be done to change things?  Certainly, Government can play a role in encouraging female entrepreneurship, but arguably the onus is really on organizations working within the business support ecosystem to do more to redress the balance.

Enter Virgin Startup, which this week pledged to provide funding for male and female-led businesses on a 50/50 basis by 2020.

Tangible Help

As Managing Director, Andy Fishburn explains, Virgin Startup was established with the intention of providing practical help for relatively young businesses and their owners. "Richard Branson is seen as an inspiration to entrepreneurs, but until we launched in 2013, the group hadn't done anything tangible to help them," he says.

Since its launch as a not-for-profit company, Virgin Startup has provided £40 million in loan funding to around 3,000 businesses while also providing advice and mentoring across a wide range of sectors. "We are industry agnostic and we are very inclusive," says recently-appointed chairwoman Linda Grant.

The road to the 50/50 pledge began last year when the organization conducted a review of its performance and approach. "What stood out to us was the number of female-led businesses that we had supported. In fact, we had overperformed but that led us to the conclusion that we could do more," adds Grant. So a goal was set to move from a 40/60 to 50/50 ratio.

Potentially, this is where things could be a little tricky. If fewer women than men are starting businesses - a fact of life that the Alison Rose report highlights - then there will,  as things stand, be a smaller percentage of female-led businesses seeking finance. In that regard, any organization implementing a 50/50 target might be accused of building in a bias against male-founded companies.

Funding More Women

But grant stresses that Virgin is not planning to reduce the flow of loan finance to male business owners. "Our intention is not to fund fewer men - it is to fund more women," she says.

Virgin's first step on the road to 50/50 funding is to mount a campaign of targeted outreach. "We aim to inspire more women to start businesses and to provide them with the skills they need to do so," says Fishburn.

To that end, Virgin Startup runs "Meet Up"  events where aspirant entrepreneurs can meet and network both with their immediate peers and experienced business people.  In addition, the company offers a series of Masterclass programs and courses, designed to help participants obtain the skills they need in areas such as creating a brand, raising crowd finance or scaling up.  Some of these are being redesigned for digital delivery to make them more accessible.  "Female founders often find that working around their home life is a barrier, so we are setting out to do things differently," says Fishburn.

Grant acknowledges the importance of providing entrepreneurs at the start of the journeys with role models in the shape of experienced and successful businesswomen, but she is keen to avoid the potential trap of organizing everything around gender silos. "It is important to get women involved in mentoring and advice," she says. "It's all about relatability. But at the same time, it's not about putting women with women. It's about mixing people up. We already have an environment that is inclusive."

Even when viewed through the lens of just one business support organization, addressing the gender imbalance in business funding is a complex undertaking. It's not simply about offering finance, it is about creating a wider support ecosystem that supports the creation of female-led businesses.

   

 

 

Seven Ways To Take Your Startup To The Next Level - Forbes

Posted: 13 Aug 2019 06:15 AM PDT

So, you've made it through the difficult process of starting a new company, obtaining initial financing and surviving your first few months or years. Congratulations. But this is no time to relax. The next big obstacle most startups face happens when they transition from startup status to becoming a viable long-term company. You can't just sit still, or your competitors will catch up and pass you — it's time to jump to the next level. But how? As a younger company, you may need some type of partner to fund your expansion and you have multiple options. Here are seven different paths to help transform your business from merely surviving to thriving. 

1. Mergers 

A true merger is fairly rare in the corporate world, as it involves two companies consolidating into a new legal entity. However, for the right businesses, this can be a way for both of them to jump to the next level together. For example, if two companies are competing in the same business and undercutting each other's profitability, neither one of them may be able to climb to the next level. By merging resources, personnel and production — while also eliminating each other as the competition — the newly combined entity can move forward and grow.

2. Acquisitions

Mergers and acquisitions are often misunderstood as being one and the same. The truth is that although these two types of corporate action share similarities, they have major differences.

In an acquisition, one company fully absorbs another company and retains its own name and corporate structure. As a startup company, an acquisition can be an excellent way to accelerate your growth. When you acquire a company, you can instantly diversify your product line, expand your customer base and keep (or obtain) dominance of your market. 

One caveat that I will stress for newer companies is that you have to be careful with the financing. I've seen how too much debt can cripple growing companies, so you'll need a sharp finance officer to navigate these waters from day one.  

3. Investors

One of the most common ways for a startup to get to the next level is to find more investors. In fact, most growing companies go through many series of capital raises with additional investors, labeling them Series A, Series B, Series C and so on. Each capital raise can help get your startup to the next level, as you should be pricing your company with a higher valuation at each round. For example, if you value your company at $500,000 in your initial capital raise, your Round B financing might value the company at $1,000,000 or more. Thus, in each round, you are raising additional financing while giving away smaller and smaller chunks of your corporate stock.

4. IPO

An initial public offering is a dream for many startup founders. And for the right company, an IPO can be a huge step toward future growth, as it results in a flood of capital hitting the company's balance sheet that can be deployed toward growth and expansion. 

If you pursue an IPO, your company will transition from being privately owned to being publicly owned, meaning large investors will own a significant percentage of your company and can influence how you run it. In exchange for capital to grow your business and generate additional profits, you'll have to give up some of the control of the company. You'll also have to comply with all the regulations of a public company, including filing quarterly and annual reports.

5. Strategic Partnerships

A strategic partnership is a less invasive way to grow your company than a full-blown merger or acquisition. For a strategic partnership to work, it's imperative to find a partner that can help you gain market share and reduce risk. For example, if your company only has a local or regional product line, it might benefit from an international partner or distributor. 

The important thing to understand when you're shopping for a strategic partner is that your relationship is most likely to be successful if your arrangement is a win for both parties. It's also important to undergo a thorough due diligence review to ensure that your partner is solvent and has a solid reputation.

6. Special Purpose Acquisition Company 

A special purpose acquisition company is a separately created entity that a company uses to raise money to invest in other enterprises. These companies are also known as "blank check" companies since they raise money from investors who don't have control over where the proceeds will be spent. This can be a good option for startups that either don't want to or can't actually qualify to go public on their own. Examples of recent SPACs are GigCapital2 and Proficient Alpha Acquisition, which raised funds with the intention of buying a financial business in China.

7. Nasdaq Private Markets

Nasdaq private markets provide liquidity for companies in the pre-IPO stage. Essentially, Nasdaq private markets provide a way to match growing companies with strategic investors. The average age of companies in the program has steadily fallen over the years, from 10 years to 6 or 7 years old, as both companies and investors alike are looking for ways to mutually benefit. As capital is the lifeblood of growing companies, Nasdaq is a great tool for companies looking to climb to the next level.

The Bottom Line

There's no shortage of ways for a successful startup to evolve into a rapidly growing company. The key is to strike the right balance between what you have to give up and what you get in return. If you take on too much debt or give up too much control of your company, for example, it can be hard to sustain your growth trajectory. However, if you carefully review all of the various partnership and financing options that are available to you, you can pick just the right type of rocket fuel your company needs to launch to the next level. 

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Brazilian fintech startup REBEL raises $42.2 million to offer personalized loan using machine learning and big data - TechStartups.com

Posted: 13 Aug 2019 09:44 AM PDT

Last year, we wrote about REBEL when the Brazilian fintech startup raised $4 million in Series A funding. Today, the online personal loan platform announced it has raised another $42.2 million (R$ 167 million) via securitization of financial loans. The new fund is ten times greater than the  $4.22 million (R$ 16.6 million) it raised in 2018. Issued by the securitizer VERT Capital, the papers were purchased by XP Asset Management, Franklin Templeton, and other players.

Founded in 2016 Andre Botelho Bastos, Paulo Asterio Nunes, and Rafael Pereira, REBEL is a data, tech and analytics-driven online platform led by technology and finance entrepreneurs. It's mission is to lead a transformation of financial services in Brazil. REBEL offers its customers fast, easy and trust-worthy credit of up to 50,000 reais for up to 24 months at interest rates as low as 2.9% per month. In addition, REBEL offers consumers free access to its proprietary REBEL Score, a credit score designed to transparently explain an individual's credit profile and to suggest actionable steps to improve financial health.

The company uses Machine Learning and Big Data to offer personalized loan proposals, and it is the only fintech in the Brazilian market to use blockchain to certify contracts. With the start of its operations in 2017, REBEL has already accumulated R$ 4 billion in loan applications, and in 2018 it raised US$ 7 million with investors, led by the Monashees fund. In the second half of 2019, the company is preparing a new round of capital-raising, series B.

In addition to the higher volume, the cost of raising capital was lower in this second offering: CDI rate plus 5.75%, compared to 6% for the previous offering. For the CFO of REBEL, André Botelho Bastos, "The size of growth in the amount of the issuance in such a short period of time is a rare occurrence in the Brazilian market, and shows investor confidence in REBEL and in the quality of the assets that we are creating."

The securitization allows the startup to service more consumers: "It is the fuel for us to continue accelerating. We have very advanced loan-analysis models that use Machine Learning and Artificial Intelligence. This allows us to assess and price every loan request precisely in just a few minutes, which guarantees us a default rate that is substantially lower than that of the market," Bastos explained.

The second issuance is just the beginning of a new phase for REBEL, with a focus on improving the client's experience. The company innovates so that it can offer even lower rates and more benefits to the consumer, in addition to offering profitability with governance for investors. "Banks usually say they are obligated to charge high interest rates because non-payment is high, causing a vicious and negative cycle. We want to create a virtuous cycle that inspires more confidence, security, and improved loan proposals in Brazil," Bastos concluded.


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