In my recent post Entrepreneurialism – it’s like flying a plane while still building it… I raised some of the pitfalls of Entrepreneurialism especially when it comes to financing your dreams.
Given that at our consulting business enovAsia we focus on Innovation we have decided top develop our own model to assist many of the great Startups in our home town – Adelaide.
We will utilise the support of our major investor and the companies that we work with to provide a total Entrepreneur ecosystem.
It has been utilised with some success and now we are planning to open it up more widely.
The Enovasia Model – Looks Like This…
We have found financial investors that have access to significant capital ($50 million) to invest in digital media and sustainability focused opportunities, though this need not always rely on ADMSL.
We are now actively seeking early stage businesses that meet our criteria … start-ups that we can invest in and also derive revenue from for affiliated, “group” or “network” businesses via a direct solution sales model.
As attractive opportunities arise, we work with these start-ups, in close collaboration with the founding entrepreneur, to ensure they are fully market ready and investor ready (the latter including a full Investor Package: Cash Flow Model, Valuation, CIM).
This is a core discipline for the senior team at Enovasia and one that has been proven repeatedly in the context of greater than 50 startups over the past 10 years.
In our work under the engagement for each start-up client, Enovasia is incentivised to deliver work of a similar quality and depth that investors would normally seek from the financial and commercial due diligences processes in the lead up to a deal close.
As a result, we are uniquely positioned to provide a robust and transparent professional view on the attractiveness, likelihood of success and portfolio fit for ventures that we know will appeal to our preferred investors along with plans and forecasts that will drive the investment decision.
Hence, opportunities we put forward to the investor group will have been rigorously pre-qualified as to
* Financial returns, and
* Scale of the opportunity.
Then, in return for a modest investment (typically 5-10%), in some cases to cover the proof of concept phase, we secure for the group sales and distribution exclusivity in the key markets for the investor and our affiliate(s), primarily in Asia and with a strong focus on China.
As we come in early on in the process and indeed Enovasia will have taken the lead in arriving at an appropriate pre-money valuation for the startup, the group is able to acquire shares at a steep discount to fair value. As Enovasia then typically steers the start-up through subsequent funding rounds, we are also able to engineer partial or full exits where desirable at excellent return multiples at each successive liquidity event.
Downstream of the deal and full launch to market, our team is also able provide best in class sales and marketing advisory – our bread and butter – which is provided in sync with the business that is tasked with the active marketing and selling.
And of course we are able to deliver those crucial connections across industries and within government agencies that are a higher level than any start-up can access on their own. Why? Because we have other products that we are working with and as such have become a trusted advisor and products that have great appeal in massive markets like China.
As such this allows us to open most doors that we need to access the right people worldwide.
In addition to the modest equity investment we seek to structure the relationship to deliver more equity to the investor based on the designated group business meeting sales targets. I believe this is the key to success ….give equity away in return for real world, sustainable cash flows not just hand outs of capital.
We have a structure that pre-qualifies the best fit, most compelling startups, gets them fully market and investor ready, provides access to the modest sums of capital needed to get off the ground, expertise to reach the market and what every start up needs for success — Paying Customers.
As well as Enovasia having the resources for the group to leverage (we are taking on a highly qualified hands on CTO – and another experienced consultant with wide experience in Asia and India …. we would also use the skills within the group to take on consulting exercises as appropriate for fees that are also in keeping with the resource …. and of course most of these exercises would ultimately benefit the group.