BSL Masterclass: The Art of Startup Financing

Startup financing is among the biggest challenges that entrepreneurs face. The recording of this open class in finance for entrepreneurs will be very useful for those who plan to launch their own company or are already facing the difficult task of keeping their business afloat.

How do you finance your entrepreneurial venture? Cash is oxygen and without it your venture will quickly die out. In this masterclass, André Delafontaine, Associate Professor & Entrepreneurship Hero with two decades of entrepreneurial expertise at Business School Lausanne (Switzerland), spoke about the various ways startups secure financing and presents a case study of a successful startup.

Financing vehicles

André started off by presenting a map of the investment space, detailing the different stages of financing a startup goes through. He provided an overview of the different amounts a startup is likely to raise depending on its stage of development. He pointed out that the risk associated with funding diminishes as the startup grows more stable and explained how some startups are being created with the idea of being sold.

At the end of this part of the webinar there were several interesting questions from participants. One participant asked whether being a recognized brand is crucial for a startup sale and another inquired about the financing-interest rate link. Another one wanted to know whether it is better to obtain financing domestically or internationally.

André then talked about the typical financing stages leading up to the initial public offering (IPO). 

Case study Lemoptix

There was a very insightful case study of Lemoptix, a company that makes micro projectors in which André invested. It’s interesting to note that the company was founded 10 years after the involved parties started developing the technology in Switzerland. After four rounds of external financing by business angels totaling CHF 6 million, the company was sold to US chipmaker Intel. All of the founders became millionaires and the rest of the employees received stock options. A true success story.  

André pointed out that CHF 6 million is actually a very small amount in the world of startup financing. Usually, newly founded companies need to raise much more cash to attract the attention of large companies like Intel.

Investment criteria

André then showed the methodology he designed to help investors determine whether it is worth investing in a particular startup. He went through different criteria such as product, market access, scalability, financing, team, and board, all based on his experience with Lemoptix. He then gave a few tips on how to present financial results.

A business school focused on entrepreneurship

André then passed the microphone to Andy Reynolds, who is engaged in student recruitment at Business School Lausanne. He talked about the business school and the application process, giving useful tips on how to gain admission to this select environment of diverse business professionals.

Andy pointed out that entrepreneurship takes center stage in Business School Lausanne’s teaching, along with megatrends such as sustainability, AI, machine learning, which are current and important for business students at any level.

This masterclass is a great opportunity for those who want to learn about how to finance a startup or want to study in a business school which places a premium on entrepreneurship.