FINANcing
corporate finance advisory
MMC Finance helps entrepreneurs to obtain financing. The focus of the consultation lies on the preparation of necessary documents, approaching financiers and guided financier discussions until the successful conclusion of the financing.
corporate FINANce
Which financing types do I suggest often?
- Founders in the early stage
- Gründungsbonus
- Business Angels
- Entrepreneurs in the growth stage
- Venture Capital
- Mezzanine Capital
- Bank financing
- Factoring
the right financing for every stage of a company
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the ideal eary stage financing
Financing for Founders
Gründungsbonus
For whom is the GründungsBonus suitable?
The GründungBonus is a relatively new support program of the IBB Business Team GmbH (subsidiary of Investitionsbank Berlin) for founders in Berlin with a technological, digital, creative or particularly sustainable business model.
The GründungsBonus provides support as follows:
- General costs incl. founder salaries up to 100,000 Euro are subsidized by 50%.
- The costs can be incurred over 2 years
- The own contribution of 50% must be proven at the time of the first payment
Procedure
01
Analysis
In this phase we discuss the innovation and analyse the existing documents.
02
Business Plan
A text business plan is required to apply for the GründungsBonus. Within the scope of the coaching we develop, among other things, the product description, pricing, market potential, competitive position, USP, market entry strategy and marketing measures.
03
Financial Plan
In the financial plan phase, we jointly create an Excel file based on a template that enables a flexible financial plan.
04
Apply for Gründungsbonus
Finally, we apply for the GründungBonus. I would be pleased to accompany all steps until the successful completion of the financing.
It is helpful for the entire application process that I have an advisory role at the IBB.
advantages of GründungsBonus
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Financing in a very early phase of the company as a grant
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No personal liability
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Simple application and efficient processing
Disadvantages of GründungsBonus
- none
Further info regarding GründungsBonus: www.gruendungsbonus.de
regarding Gründungsbonus
Statements of our clients
Business Angel
For whom is financing through a business angel suitable?
Business angels are usually successful entrepreneurs who want to use their knowledge, contacts and money to advance a business. Mostly business angels invest in business models and industries they know or can assess. Business angels have the goal to sell their shares at a profit later on (EXIT). This can be done in the context of an IPO, the sale of the company, a sale to another investor or a sale to the entrepreneur.
A typical Business Angel invests between 10 and 100 TEUR per company. There are also higher investments. However, these occur less frequently.
Due to the investment amount, business angel investments are mainly of interest in the first years after the company is founded. It is also important that business angels invest in a very early phase of the company (even before turnover).
In most cases, the investments of business angels are made in the form of equity capital (money against shares) or in the form of convertible loans (loans with the right to convert into company shares at a later stage).
How do you find business angels? Business angels are hard to find, as they often do not make public that they invest as business angels. Therefore, active networking or a network with business angels is crucial.
procedure
01
Analysis
In this phase we discuss the innovation und analyze the existing documents.
02
Pitch Deck
A pitch deck (company presentation) and a financial plan is required to approach business angels. Within the scope of our consulting we develop an optimized pitch deck with customer problem, solution, market, competition, USP (unique selling proposition), business model, sales strategy and finances.
03
Financial Plan
Furthermore, together we create a professional financial plan which allows a flexible preview of sales and costs based on the most important KPIs (Key Performance Indicators). The finance plan contains a detailed liquidity plan that shows the capital requirements.
04
Contacting Business Angels
Afterwards we will contact business angels. In doing so, I will gladly make my network available. I am happy to accompany the talks until the successful conclusion of the financing.
advantages of Business Angel Investments
- They invest in a very early stage
- Confirmation of the business model
- Support with contacts and experience
disadvantages of Business Angel Investments
- Business Angels receive shares in your company (part of dividends and exit) – do not give too many shares away at an early stage
- The contracts should give business angels limited extra rights
Support for Business Angel Investments:
BAFA INVEST – Zuschuss für Wagniskapital – 20% of the investment is refunded if the investment is held for at least 3 years.
https://www.bafa.de/DE/Wirtschafts_Mittelstandsfoerderung/Beratung_Finanzierung/Invest/invest_node.html
In order to receive the subsidy, the company must submit an application to BAFA.
about BUSINESS ANGELs
statements of our clients
The ideal growth financing
Entrepreneurs in the growth phase
Venture Capital
For whom is Venture Capital suitable?
Venture capital companies (VCs) are professional investors who have usually raised money in a fund from large investors such as pension funds, insurance companies or family offices. The aim of venture capital companies is to generate a high return by taking an investment (purchase of shares) and selling the shares (exit) with the highest possible increase in value. The interests of local state venture capital companies, such as IBB Beteiligungsgesellschaft, are somewhat different. Although these also want to generate a return on investment if possible, the promotion of local companies and the creation of jobs is often in the foreground. In contrast, corporate venture capital companies have a strategic focus. By examining and investing in start-ups they make sure that they discover innovations in their field early on. Corporate venture capital companies want to ensure that they are aware of important developments and can react by taking over companies if necessary.
Due to venture capital companies´ interest in high returns and the expected insolvency of a number of investments, venture capital companies must concentrate their investments on high flyers. Venture capital is therefore only suitable for entrepreneurs who have a scalable business model (growing rapidly without much additional personnel). The sales potential should be a multiple of the capital requirement and in any case well over EUR 20 million, so that a corresponding return can be achieved on sale.
How do you find a venture capital provider? Venture capital companies are present on the Internet and therefore quite easy to find. However, they receive a large number of investment opportunities every day in the form of presentations (pitch decks). Therefore it is very helpful to be able to stand out from the crowd by contacting them personally.
Procedure
01
Analysis
In this phase we discuss the innovation and analyze the existing documents.
02
Pitch Deck
A pitch deck (company presentation) and a financial plan is required to approach VCs. In the course of the coaching we develop an optimized pitch deck with problem definition, solution, market, competition, USP, business model, sales strategy and finances.
03
Financial Plan
Furthermore, together we create a professional financial plan which allows a flexible preview of sales and costs based on the most important KPIs (Key Performance Indicators). The financial plan contains a detailed liquidity plan that shows the capital requirements.
04
Contact VC’s
Afterwards we will address VCs. In doing so, I will gladly make my network available. I am happy to accompany the discussions until the successful conclusion of the financing.
Advantages of Venture Capital
- Venture capital companies invest in risky business phases (before profitability)
- No personal liability of the entrepreneur (VC bears the risk of default)
- Support with contacts especially to further investors
disadvantages of Venture Capital
- VCs are given many rights (e.g. veto rights, co-sales rights), which are difficult to negotiate
- Focus on a company sale (exit) after approx. five years
about Venture Capital
statements of our clients
Mezzanine Kapital
For whom is Mezzanine Capital suitable?
Mezzanine capital is a mixture of equity and debt capital. The word “mezzo” comes from Italian and means half. Mezzanine capital is usually used to provide a company with equity without giving the capital providers the full influence of real shareholders. Typical forms of mezzanine capital are silent partnerships, profit participation certificates, subordinated loans or convertible loans.
Mezzanine capital is suitable for companies that have been active in the market for at least a few years and are either profitable or about to become so. Often the economic equity capital of the companies is not sufficient to finance them solely with loans. Mezzanine capital increases the equity ratio and thus enables new bank financing if necessary.
Mezzanine donors are often medium-sized investment companies of the federal states or specialized investors and, in some cases, banks. Convertible loans are also often used by business angels for fast and pragmatic processing of an investment without a notary appointment.
Procedure
01
Analysis
In this phase we discuss the innovation and analyze the existing documents.
02
Business Plan
In order to address mezzanine investors, a detailed text business plan and a financial plan is usually required. Within the scope of the consultation we develop a meaningful business plan with company presentation, product description, market, competition, USP, business model, sales strategy and finances.
03
Financial Plan
Furthermore, together we create a professional financial plan which allows a flexible preview of sales and costs based on the most important KPIs (Key Performance Indicators). Furthermore, the finance plan contains a detailed liquidity plan that shows the capital requirements.
04
Contacting Mezzanine Investors
Subsequently we contact mezzanine providers. I am happy to put my network at your disposal. I will gladly accompany the meetings until the successful conclusion of the financing.
advantages of Mezzanine capital
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No personal liability of the entrepreneur (mezzanine capital provider bears the risk of default)
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Contractual arrangement very flexible
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Can be handled quickly and pragmatically without a notary appointment
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Influence of mezzanine investors is often limited
Disadvantages of Mezzanine capital
- Usually an interest rate is agreed, which can lead to a cash outflow
about Mezzanine financing
Statements of our Clients
Bankfinanzierung
For whom is bank financing suitable?
Bank financing is suitable for companies that have been in the market for at least a few years and are usually profitable. Furthermore, it is necessary that the equity is in a good relation to the balance sheet total (equity ratio).
Procedure
01
Analysis
In this phase we discuss the business model and analyze the existing documents.
02
Business Plan
To approach banks, a detailed business plan and a financial plan is usually required. Within the scope of our consulting we develop a meaningful business plan with company presentation, product description, market, competition, USP, business model, sales strategy and finances.
03
Financial Plan
Furthermore, together we create a professional financial plan which allows a flexible preview of sales and costs based on the most important KPIs (Key Performance Indicators). The financial plan contains a detailed liquidity plan that shows the capital requirements.
04
Conatact BanksWe then approach banks. In doing so, I will gladly make my network available. I will accompany the discussions until the successful conclusion of the financing.
Advantages of Bank financing
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Can be processed without a notary appointment
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Influence of the bank on entrepreneurial decisions is low
disadvantages of bank financing
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In most cases a personal liability of the entrepreneur is required.
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In most cases an interest and a repayment is agreed, which leads to a cash outflow
about Bank financing
Statements of our clients
Factoring
For whom is Factoring suitable?
Factoring refers to the sale of receivables. Longer payment periods are agreed upon, especially in business transactions between companies. For example, if a mechanical engineering company delivers its machines to a manufacturing company with a payment term of 90 days, it must wait at least 90 days, but often more than 100 days, for the money to reach the bank account. The resulting financing amount is called working capital. If the machine manufacturer uses factoring, it sells the receivables to a factoring company at the time of invoicing and usually receives the invoice amount minus the factoring fee within one day. At maturity, the invoice recipient pays the invoice amount to the factoring company.
Factoring is particularly suitable for companies that sell to corporate customers with long payment terms. Until a few years ago, factoring was reserved for companies with annual sales of over one million EUR. In the meantime, the thresholds have fallen significantly. Due to the digitalization of the business, even self-employed people can have individual outgoing invoices pre-financed by online factoring companies.
Some Factoring companies offer their services even to start-ups and companies in difficulty.
Factoring companies are partly subsidiaries of banks or leasing companies. In Germany there are about 200 factoring companies. Therefore it is not easy to get a good overview.
Procedure
01
Analysis
In this phase we discuss the business model and analyze the existing documents.
02
Short Profile
A short profile and a financial plan is necessary to approach factoring companies. In the course of the consultation we develop a short profile with company presentation, product description, business model, sales strategy and finances.
03
Financial Plan
Furthermore, we prepare a professional financial plan which allows a preview of turnover and costs.
04
Contact Factoring companies
Afterwards we will contact factoring companies. In doing so, I will gladly make my network available. I will accompany the meetings until the successful conclusion of the financing and the beginning of the cooperation.