Description
EFS is a non-profit organization that assists entrepreneurs seeking access to investment capital for their business.
www.efsk.ca
www.efsk.ca
A Disciplined Approach to
A Disciplined Approach to
Entrepreneurship
Entrepreneurship
SEDA Fall Conference:
SEDA Fall Conference:
Defining the New West
Defining the New West
October 27 October 27- -28, 2009 28, 2009
David Gauthier, PhD, MBA David Gauthier, PhD, MBA
Chief Executive Officer Chief Executive Officer
OVERVIEW
OVERVIEW
What We Do:
• Identify & develop investment opportunities
• Assist entrepreneurs to become “Investment Ready”
• Increase chances of entrepreneurs obtaining investment capital
• Develop entrepreneurial skills
Who We Are:
•EFS is a non-profit organization that assists entrepreneurs seeking
access to investment capital for their business.
MANAGEMENT & STAFF
MANAGEMENT & STAFF
Regina Office
• Nick Dalrymple, Investment Analyst
• Launa Sexsmith, Executive Administrator
Head Office - Saskatoon
• David Gauthier, Chief Executive Officer
• Tanner Bradley, Investment Analyst
Performance
Performance
• $11 M investment by Saskatchewan Entrepreneurial Fund (SEF)
• Additional $7.7 M levered by SEF Investments
• 24 other clients assisted in capital raising efforts of $17.3 M
• Approximately 400 inquiries
• Numerous referrals and advisory services
• Educational Programming
EFS PROCESS
EFS PROCESS
Saskatchewan
Entrepreneurs
Other Programs
And Organizations
EFS
Consultation &
Review
Work Through
Challenges
External Advisors
I nvestment Ready Entrepreneur
Investor Readiness
eTool
Background of Investor Readiness Background of Investor Readiness eTool eTool
• Other than Fund activities, the role of EFS was not defined
• Needed to demonstrate how we are aligned with other innovation
players and demonstrate unique value propositions
• Needed to formalize our process for interacting with clients and
other organizations
• During the strategic planning process, we discovered that we
needed mechanisms to screen entrepreneurs into the innovation
system rather than out of individual parts of the system
Why Investor Readiness?
Why Investor Readiness?
• Financing is a good gatekeeper for monitoring the
development of a company over time
• Financing is of high interest to entrepreneurs and gets
their attention
• Entrepreneurs need to understand the various forms of
capital that they may need to access over time and how
decisions today may affect the ability to raise additional
capital in the future
• Capital planning and helping entrepreneurs to become
investor ready is what EFS does
Benefits of Investor Readiness
Benefits of Investor Readiness
eTool
eTool
• Clients do a self evaluation of progress and shortcomings
– Establishes a starting point for a non-confrontational conversation
• Based on initial diagnostic, clients can be directed to appropriate resources
and/or other organizations that are best suited to their particular needs at a
particular time
– Use of eTool is most effective when combined with coaching
• Client can take a “peek” ahead to later stages to prepare for what is coming
• Doesn’t screen anyone out, just provides a mirror for them to see where
they are
P
o
t
e
n
t
i
a
l
R
O
I
(
$
)
Perceived Risk of Not Obtaining ROI
C
o
m
p
a
n
y
I
n
v
e
s
t
o
r
s
Overly Optimistic Company Creates Divisive Overly Optimistic Company Creates Divisive
Tension Tension
An Un-disciplined
Company Works
From This Side
Realistic Company Creates Constructive Realistic Company Creates Constructive
Dynamic Dynamic
P
o
t
e
n
t
i
a
l
R
O
I
(
$
)
Perceived Risk of Not Obtaining ROI
I
n
v
e
s
t
o
r
s
C
o
m
p
a
n
y
A Disciplined
Company Works
From This Side
Capital Planning and Financing Options Capital Planning and Financing Options
INVESTOR READINESS
INVESTOR READINESS
eTool
eTool
Stage of
Investment
Market Product/
Service
Human
Resources
Company/
Operations
Financing Options
Pre-Seed
Pre-Seed Stage
Diagnostic and
Development
tools
Pre-Seed Stage
Diagnostic and
Development
tools
Pre-Seed Stage
Diagnostic and
Development
tools
Pre-Seed Stage
Diagnostic and
Development
tools
Pre-Seed Financing Options,
Referrals, Tutorials
Based on Diagnostic
Seed
Seed Stage Diagnostic
and
Development
tools
Seed Stage Diagnostic
and
Development
tools
Seed Stage Diagnostic
and
Development
tools
Seed Stage Diagnostic
and
Development
tools
Seed Stage Financing
Options, Referrals,
Tutorials Based on
Diagnostic
Early
Early Stage
Diagnostic and
Development
tools
Early Stage Diagnostic
and
Development
tools
Early Stage Diagnostic
and
Development
tools
Early Stage Diagnostic
and
Development
tools
Early Stage Financing
Options, Referrals,
Tutorials Based on
Diagnostic
Growth
Growth Stage
Diagnostic and
Development
tools
Growth Stage
Diagnostic and
Development
tools
Growth Stage
Diagnostic and
Development
tools
Growth Stage
Diagnostic and
Development
tools
Growth Stage Financing
Options, Referrals,
Tutorials Based on
Diagnostic
Expansion
Expansion Stage
Diagnostic and
Development
tools
Expansion Stage
Diagnostic and
Development
tools
Expansion Stage
Diagnostic and
Development
tools
Expansion Stage
Diagnostic and
Development
tools
Expansion Stage Financing
Options, Referrals,
Tutorials Based on
Diagnostic
Mature
Mature Stage
Diagnostic and
Development
tools
Mature Stage
Diagnostic and
Development
tools
Mature Stage
Diagnostic and
Development
tools
Mature Stage
Diagnostic and
Development
tools
Mature Stage Financing
Options, Referral,
Tutorials Based on
Diagnostic
Pre
Pre
-
-
Seed Stage
Seed Stage
• All about fleshing out a market opportunity and determining
whether or not a product or service can be produced and sold to
generate a reasonable profit
• Great discipline is required at this stage to ensure that the idea is
really feasible
– Next stages become increasingly expensive, so you need to be
convinced that the opportunity is worth pursuing
• Sources of financing primarily from entrepreneur, friends and family
and government grants since this stage is extremely risky
Which Came First Which Came First… …the Product Concept or the the Product Concept or the
Market Gap? Market Gap?
• When a market gap is identified first, feasibility assessment is often
easier
– If you can produce and sell a solution at a reasonable price, then the
plan is relatively straightforward
• When a product concept is identified first, feasibility assessment is
often more difficult
– Who wants your product?
– Is there another market that is more valuable than the one you had in
mind when you developed the product?
– Once a product or prototype is developed, it may be more difficult to let
go, as it is now tangible
• Do not enter prototyping (Seed Stage) until you have fully assessed
a market gap and the feasibility of your solution
Seed Stage
Seed Stage
• Concept is demonstrated to be feasible
• Business plan completed, market validated, pre-commercial
prototype has been developed and tested and feedback has been
used to lock in specifications for commercial production
• Capital plan is in place and future risks have been identified and
accounted for
• Due to risk, sources of financing continue to be primarily from
entrepreneur, friends and family and government grants, but
preparations for angel or other private equity financing should begin
if required in the future
Early Stage
Early Stage
• Business operational; early sales, but not likely profitable
• Initial management and staff in place
• Funding required to fuel sales, reach the break-even point, increase
productivity, cut unit costs, as well as build the corporate infrastructure and
distribution system
• Need to prepare for subsequent rapid Growth Stage
– Formal policies, procedures, financial systems and operating systems
– Being unprepared for the next stage may lead to: hiring and expanding too fast,
dysfunctional management systems; high employee turnover; inability to grow
customer base and revenues; and ultimately the failure of the company
• Potential financing from banks or financial institutions, angel or private
equity financing, strategic alliances, leasing and potentially additional grants
Growth Stage
Growth Stage
• Rapid growth, often accompanied by growing pains
• Major focus of your business is growing revenues, but you need to ensure
that production can keep up with sales without overtaking them-CASH IS
KING
• New hires may be essential to access new markets and improve
productivity and quality control
• New management and organizational structures (e.g. Board of
Directors/Advisors) may also be required to ensure that no aspect of the
business is overlooked
– I nvestors will scrutinize this area carefully; poor management will kill
the deal
• The policies and procedures and reporting systems that were established at
the end of the Early Stage of development should be fully implemented,
refined and expanded during the Growth Stage.
• Broader range of financing available—angel and venture capital financing
targeted at this stage for certain opportunities
• May consider selling portion of business/assets to finance future growth
Expansion Stage
Expansion Stage
• Similar to Growth Stage but is a more controlled, deliberate and
stable period of growth that occurs once a company is profitable
and functioning at a high level
– Cash flow under control; staff highly motivated and effective;
understand existing markets and where you want to go next
• Expansion may also mean a quantum leap forward by introduction
of new products or services, or accessing formerly inaccessible
markets for existing products (e.g. international expansion, finding
an entirely new use for the product, etc.)
• Financing sources include: banks and financial institutions; leasing;
angels; private equity firms; strategic commercialization partners;
and private individuals or management of the company
Mature Stage
Mature Stage
• Defined by a culture of foresight, planning and effective execution of
strategies necessary to maintain and improve market position relative to
competitors
• Culture of continuous improvement and renewal, visionary leadership and
extensive technical and market competitive intelligence capabilities
• Profits are re-invested in new opportunity development to augment and
eventually replace products that are nearing the end of their life cycles
• However, continuous change is not always a linear, predictable process,
even for the best managed companies. Financing may be required to:
– Acquire a competitor or complete a major expansion (i.e. return to Expansion
Stage
– Survive a change in the marketplace that has caused your competitive position to
decline (i.e. potential return to a Growth or Expansion stages)
– Undertake a dramatic turnaround (i.e. potentially returning to the Early Stage of
development)
Accessing the
Accessing the
eTool
eTool
• Access is by password on the Foundation’s
Website (www.efsk.ca)
• Two types of access:
– 2 week trial—purpose is to go through
diagnostic and initial coaching to identify
future development path and resources
– 1 year access—for EFS members
Info and Password Access
Info and Password Access
General Overview and
Password Request
Introduction
Introduction
Access Request
Access Request
UserName/Password
Request
Registration Form
Registration Form
Login
Login
Log-in
Access Page
Access Page
Go to eTool
Navigate Back
to this Page
Diagnostic
Diagnostic
Diagnostic Result
Diagnostic Result
Tutorial
Tutorial
Updated Diagnostic
Updated Diagnostic
Financing Options
Financing Options
Financing Options Cont
Financing Options Cont
’
’
d
d
Updated Diagnostic
Updated Diagnostic
Thank You for Your Time!
QUESTIONS?
QUESTIONS?
www.efsk.ca
www.efsk.ca
doc_914848225.pdf
EFS is a non-profit organization that assists entrepreneurs seeking access to investment capital for their business.
www.efsk.ca
www.efsk.ca
A Disciplined Approach to
A Disciplined Approach to
Entrepreneurship
Entrepreneurship
SEDA Fall Conference:
SEDA Fall Conference:
Defining the New West
Defining the New West
October 27 October 27- -28, 2009 28, 2009
David Gauthier, PhD, MBA David Gauthier, PhD, MBA
Chief Executive Officer Chief Executive Officer
OVERVIEW
OVERVIEW
What We Do:
• Identify & develop investment opportunities
• Assist entrepreneurs to become “Investment Ready”
• Increase chances of entrepreneurs obtaining investment capital
• Develop entrepreneurial skills
Who We Are:
•EFS is a non-profit organization that assists entrepreneurs seeking
access to investment capital for their business.
MANAGEMENT & STAFF
MANAGEMENT & STAFF
Regina Office
• Nick Dalrymple, Investment Analyst
• Launa Sexsmith, Executive Administrator
Head Office - Saskatoon
• David Gauthier, Chief Executive Officer
• Tanner Bradley, Investment Analyst
Performance
Performance
• $11 M investment by Saskatchewan Entrepreneurial Fund (SEF)
• Additional $7.7 M levered by SEF Investments
• 24 other clients assisted in capital raising efforts of $17.3 M
• Approximately 400 inquiries
• Numerous referrals and advisory services
• Educational Programming
EFS PROCESS
EFS PROCESS
Saskatchewan
Entrepreneurs
Other Programs
And Organizations
EFS
Consultation &
Review
Work Through
Challenges
External Advisors
I nvestment Ready Entrepreneur
Investor Readiness
eTool
Background of Investor Readiness Background of Investor Readiness eTool eTool
• Other than Fund activities, the role of EFS was not defined
• Needed to demonstrate how we are aligned with other innovation
players and demonstrate unique value propositions
• Needed to formalize our process for interacting with clients and
other organizations
• During the strategic planning process, we discovered that we
needed mechanisms to screen entrepreneurs into the innovation
system rather than out of individual parts of the system
Why Investor Readiness?
Why Investor Readiness?
• Financing is a good gatekeeper for monitoring the
development of a company over time
• Financing is of high interest to entrepreneurs and gets
their attention
• Entrepreneurs need to understand the various forms of
capital that they may need to access over time and how
decisions today may affect the ability to raise additional
capital in the future
• Capital planning and helping entrepreneurs to become
investor ready is what EFS does
Benefits of Investor Readiness
Benefits of Investor Readiness
eTool
eTool
• Clients do a self evaluation of progress and shortcomings
– Establishes a starting point for a non-confrontational conversation
• Based on initial diagnostic, clients can be directed to appropriate resources
and/or other organizations that are best suited to their particular needs at a
particular time
– Use of eTool is most effective when combined with coaching
• Client can take a “peek” ahead to later stages to prepare for what is coming
• Doesn’t screen anyone out, just provides a mirror for them to see where
they are
P
o
t
e
n
t
i
a
l
R
O
I
(
$
)
Perceived Risk of Not Obtaining ROI
C
o
m
p
a
n
y
I
n
v
e
s
t
o
r
s
Overly Optimistic Company Creates Divisive Overly Optimistic Company Creates Divisive
Tension Tension
An Un-disciplined
Company Works
From This Side
Realistic Company Creates Constructive Realistic Company Creates Constructive
Dynamic Dynamic
P
o
t
e
n
t
i
a
l
R
O
I
(
$
)
Perceived Risk of Not Obtaining ROI
I
n
v
e
s
t
o
r
s
C
o
m
p
a
n
y
A Disciplined
Company Works
From This Side
Capital Planning and Financing Options Capital Planning and Financing Options
INVESTOR READINESS
INVESTOR READINESS
eTool
eTool
Stage of
Investment
Market Product/
Service
Human
Resources
Company/
Operations
Financing Options
Pre-Seed
Pre-Seed Stage
Diagnostic and
Development
tools
Pre-Seed Stage
Diagnostic and
Development
tools
Pre-Seed Stage
Diagnostic and
Development
tools
Pre-Seed Stage
Diagnostic and
Development
tools
Pre-Seed Financing Options,
Referrals, Tutorials
Based on Diagnostic
Seed
Seed Stage Diagnostic
and
Development
tools
Seed Stage Diagnostic
and
Development
tools
Seed Stage Diagnostic
and
Development
tools
Seed Stage Diagnostic
and
Development
tools
Seed Stage Financing
Options, Referrals,
Tutorials Based on
Diagnostic
Early
Early Stage
Diagnostic and
Development
tools
Early Stage Diagnostic
and
Development
tools
Early Stage Diagnostic
and
Development
tools
Early Stage Diagnostic
and
Development
tools
Early Stage Financing
Options, Referrals,
Tutorials Based on
Diagnostic
Growth
Growth Stage
Diagnostic and
Development
tools
Growth Stage
Diagnostic and
Development
tools
Growth Stage
Diagnostic and
Development
tools
Growth Stage
Diagnostic and
Development
tools
Growth Stage Financing
Options, Referrals,
Tutorials Based on
Diagnostic
Expansion
Expansion Stage
Diagnostic and
Development
tools
Expansion Stage
Diagnostic and
Development
tools
Expansion Stage
Diagnostic and
Development
tools
Expansion Stage
Diagnostic and
Development
tools
Expansion Stage Financing
Options, Referrals,
Tutorials Based on
Diagnostic
Mature
Mature Stage
Diagnostic and
Development
tools
Mature Stage
Diagnostic and
Development
tools
Mature Stage
Diagnostic and
Development
tools
Mature Stage
Diagnostic and
Development
tools
Mature Stage Financing
Options, Referral,
Tutorials Based on
Diagnostic
Pre
Pre
-
-
Seed Stage
Seed Stage
• All about fleshing out a market opportunity and determining
whether or not a product or service can be produced and sold to
generate a reasonable profit
• Great discipline is required at this stage to ensure that the idea is
really feasible
– Next stages become increasingly expensive, so you need to be
convinced that the opportunity is worth pursuing
• Sources of financing primarily from entrepreneur, friends and family
and government grants since this stage is extremely risky
Which Came First Which Came First… …the Product Concept or the the Product Concept or the
Market Gap? Market Gap?
• When a market gap is identified first, feasibility assessment is often
easier
– If you can produce and sell a solution at a reasonable price, then the
plan is relatively straightforward
• When a product concept is identified first, feasibility assessment is
often more difficult
– Who wants your product?
– Is there another market that is more valuable than the one you had in
mind when you developed the product?
– Once a product or prototype is developed, it may be more difficult to let
go, as it is now tangible
• Do not enter prototyping (Seed Stage) until you have fully assessed
a market gap and the feasibility of your solution
Seed Stage
Seed Stage
• Concept is demonstrated to be feasible
• Business plan completed, market validated, pre-commercial
prototype has been developed and tested and feedback has been
used to lock in specifications for commercial production
• Capital plan is in place and future risks have been identified and
accounted for
• Due to risk, sources of financing continue to be primarily from
entrepreneur, friends and family and government grants, but
preparations for angel or other private equity financing should begin
if required in the future
Early Stage
Early Stage
• Business operational; early sales, but not likely profitable
• Initial management and staff in place
• Funding required to fuel sales, reach the break-even point, increase
productivity, cut unit costs, as well as build the corporate infrastructure and
distribution system
• Need to prepare for subsequent rapid Growth Stage
– Formal policies, procedures, financial systems and operating systems
– Being unprepared for the next stage may lead to: hiring and expanding too fast,
dysfunctional management systems; high employee turnover; inability to grow
customer base and revenues; and ultimately the failure of the company
• Potential financing from banks or financial institutions, angel or private
equity financing, strategic alliances, leasing and potentially additional grants
Growth Stage
Growth Stage
• Rapid growth, often accompanied by growing pains
• Major focus of your business is growing revenues, but you need to ensure
that production can keep up with sales without overtaking them-CASH IS
KING
• New hires may be essential to access new markets and improve
productivity and quality control
• New management and organizational structures (e.g. Board of
Directors/Advisors) may also be required to ensure that no aspect of the
business is overlooked
– I nvestors will scrutinize this area carefully; poor management will kill
the deal
• The policies and procedures and reporting systems that were established at
the end of the Early Stage of development should be fully implemented,
refined and expanded during the Growth Stage.
• Broader range of financing available—angel and venture capital financing
targeted at this stage for certain opportunities
• May consider selling portion of business/assets to finance future growth
Expansion Stage
Expansion Stage
• Similar to Growth Stage but is a more controlled, deliberate and
stable period of growth that occurs once a company is profitable
and functioning at a high level
– Cash flow under control; staff highly motivated and effective;
understand existing markets and where you want to go next
• Expansion may also mean a quantum leap forward by introduction
of new products or services, or accessing formerly inaccessible
markets for existing products (e.g. international expansion, finding
an entirely new use for the product, etc.)
• Financing sources include: banks and financial institutions; leasing;
angels; private equity firms; strategic commercialization partners;
and private individuals or management of the company
Mature Stage
Mature Stage
• Defined by a culture of foresight, planning and effective execution of
strategies necessary to maintain and improve market position relative to
competitors
• Culture of continuous improvement and renewal, visionary leadership and
extensive technical and market competitive intelligence capabilities
• Profits are re-invested in new opportunity development to augment and
eventually replace products that are nearing the end of their life cycles
• However, continuous change is not always a linear, predictable process,
even for the best managed companies. Financing may be required to:
– Acquire a competitor or complete a major expansion (i.e. return to Expansion
Stage
– Survive a change in the marketplace that has caused your competitive position to
decline (i.e. potential return to a Growth or Expansion stages)
– Undertake a dramatic turnaround (i.e. potentially returning to the Early Stage of
development)
Accessing the
Accessing the
eTool
eTool
• Access is by password on the Foundation’s
Website (www.efsk.ca)
• Two types of access:
– 2 week trial—purpose is to go through
diagnostic and initial coaching to identify
future development path and resources
– 1 year access—for EFS members
Info and Password Access
Info and Password Access
General Overview and
Password Request
Introduction
Introduction
Access Request
Access Request
UserName/Password
Request
Registration Form
Registration Form
Login
Login
Log-in
Access Page
Access Page
Go to eTool
Navigate Back
to this Page
Diagnostic
Diagnostic
Diagnostic Result
Diagnostic Result
Tutorial
Tutorial
Updated Diagnostic
Updated Diagnostic
Financing Options
Financing Options
Financing Options Cont
Financing Options Cont
’
’
d
d
Updated Diagnostic
Updated Diagnostic
Thank You for Your Time!
QUESTIONS?
QUESTIONS?
www.efsk.ca
www.efsk.ca
doc_914848225.pdf