Poka Tech – Funding Strategies

Jan 7^th 2024

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Executive Summary

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Contents

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Accelerator / Incubator

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Grants & Schemes

Angel Investors

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Angel Investors could be effective to bring Poka Tech’s innovative product to market, but might require ownership stake and higher internal rate of return.

“Italian VC & Angel investments reaching EUR 2.1 billion, a significant 67% increase over 2021”

“We’d prefer to be launched by 2025” – CFO, Poka Tech

Angel Investor would favor Poka Tech’s genuine interest in innovation and help in early stage of business development.

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Business angels are more interested in startups offering B2B technology services.

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• Poka Tech can look over more conventional loan processing with no debt/payment obligation.

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• Poka Tech can effectively increase its time-to-market as Angel Investor’s favors startup focused on technological innovation, to take its first step.

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• Poka Tech can derive efficient market and product strategies from valuable resources, skills and experience of Angel Investors.

Why Angel Investors?

Why is this �a good opportunity ?

“85% of the target companies are innovative startups”

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3 factors to be considered by Poka Tech before choosing Angel Investors

• Expected Rate of Return = 22% - by Angel Returns Study

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• Might be expensive for Poka Yoke, but comparatively angel investing would be suitable for an innovative startup, making it a good fit.

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Giving up shares & future profits

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• Investor’s Involvement = 10% of their portfolios

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Control over the products

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• Average Investment by Angel Investors = € 0.5 M to 1M – Survey by Angel Capital Association

Modest Investments

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Estimating value and evaluating growth potential are the key elements to attract angel investors

• Identify potential investors
• Get references
• Align goals

• Approximate the valuation
• Evaluate Growth Potential
• Create Investor Pitch

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• Establish Investor’s relationship
• Mentoring
• Advisor / Silent Partner
• Participate in flagship and Investor day events.

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Value Proposition

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Time period in Months

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Considering the Investing experience, industry experience and financial stability, one of the following firms could be Poka Tech’s potential angel investors

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4 key strategies to “reconsider” how we think about angel investing

Key questions

• How crucial is to maintain complete control over the company?

• If you get 0.5M from angel investing, what would be other sources of funding for remaining finances?
• What can you do about it?

• What kind of impact could the mentorship and guidance provided by angel investors have on Poka Tech?

Starter thoughts

• Giving up shares and future profits might help Poka Tech to fasten it's time-to-market.

• With experience in the relevant engineering industry, angel investors could provide effective GTM strategies.

“Growth" potential

Ownership Interest

Other funding sources

Besides Investors

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• How can the growth strategy be formulated to help investors comprehend the mitigation of risks?

• It could capitalize on funds from its parent company or government schemes.

• Showcasing strong team, dynamic business plan, solid financial projection would be the best practice.

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Contents

accelerator / Incubator

Angel Investors

Grants & Schemes

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Angel Investors

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Partnerships with a startup incubator will help Poka Tech reap many benefits like mentorship, business growth support and funding opportunities.

Why Startup incubators ?

Startup incubators generally enroll and invest in innovative ideas of the future. This is in alignment with Poka Tech’s value proposition and Poka Tech can derive various benefits of an incubator along with investments.

Why is this a good opportunity ?

• Joining a startup incubator will secure Poka Tech’s initial seed funding for kickstarting production.�
• Poka Tech can leverage incubators business development support and networking to establish and scale its business model.�
• Poka Tech can benefit from industry expert support and mentorship to enhance marketing and product strategies for growth.

“Business nurtured in an incubator have a survival rate of 87%, compared to traditional startups with a survival rate of 44%”� - Business News Daily

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Factors to consider while choosing the right startup incubator program

Stage of development:

Poka Tech should focus on startup incubators which foster early / nascent stage startups and products

Business model and industry:

Poka Tech should focus on incubators with experience in electronics industry.

The offer and costs:

- Take into account the investment and equity terms offered by the incubator

- Consider other forms of non-equity investments offered.

Incubator mentors:

- Research on the mentor support and expertise.

- Important to look for mentors with industry expertise.

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The commitment:

- Make sure that the incubator is committing their timelines according to Poka Tech’s needs.

Investments / referrals:

- Look into the incubators network of investors / VC’s for further funding rounds after seed investment.

- Look at the incubator’s further funding capabilities

The location:

Poka Tech will have to be prepared for business relocation to the incubator’s location, which might add costs and be time consuming.

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History / alumni:

- Make sure that the alumni’s business model aligns with Poka Tech’s values and vision.

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Top startup Incubators for Poka Tech: Worth Exploring

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Industrio Italy: Key Insights

CREDIT: Tashi Elheim Sylten (STH)

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About:

Industrio invests and supports innovative startups in leading sectors of Italian economy like digital manufacturing, robotics, tech,automotive etc.

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Industry:�Automotive, digital manufacturing, tech, robotics,smart transportation, biotech

Portfolio:

Nova Labs: software and hardware for innovative robots.�BRAIN:Motion detection enabled device for motor sports

MECCATRONICORE: 3D Printing and prototyping.

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Investment:

Equity investment upto EUR 75,000 for 10 - 15% of equity.

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Pre requisites for application:

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Buildit Incubator and Accelerator (EU): Key Insights

CREDIT: Tashi Elheim Sylten (STH)

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About:

Buildit is the first hardware & IOT incubator in the Baltics and Nordics.�With a portfolio of 80+ startups from 18 countries.

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Industry:�Hardware and IOT.

Portfolio:

SepsiScan: Healthcare diagnosis devices�Saikne:Electroacoustic devices for music production

SUBmerge: remotely operated Submarine drones

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Investment:

Pre seed investment upto EUR 500,000 as a convertible loan

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Pre requisites for application:

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Nubbo Incubator (France): Key Insights

CREDIT: Tashi Elheim Sylten (STH)

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About:

Nubbo’s vision is to transform projects into sustainable, responsible and job creating businesses. They invest in innovative B2B ideas with a strong potential.

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Industry:�All sectors.

Portfolio:

LeoSense: Satellite intelligence service for aviation.�Dendris: Molecular diagnostic devices.

IntuiLab: Digital experience creation platform using AI.

Investment:

Upto EUR 50,000 investment without equity. Repayable only if the business is successful.

Pre requisites for application:

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HAX Capital (USA): Key Insights

CREDIT: Tashi Elheim Sylten (STH)

About:

HAX is a hard-tech startup development program. HAX supports founders with initial pre-seed/seed investment and extensive engineering, marketing and business development support.

Industry:�Robotic automation, biomanufacturing, IOT, AI and more.

Portfolio:

AiSight: Automating machine diagnostics for manufacturing�Amper: Real time machine analytics for factory owners.

ACiiST: Smart city connectivity infrastructure.

Investment:

Post Money SAFE investment of $250,000.

Pre requisites for application:

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Startup incubator program application: Bonus pointers

Polish your pitch to perfection

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• It’s important to not go too granular on tech specs but focus on the user story of the ideal customer.
• A good understanding on the value Poka Tech will deliver, portrayed in an easy to understand way.

Minimum Viable Product

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• Having some level of development visible, this could include having a working prototype, or having conducted customer interviews, or having launched an MVP.

Previous qualifications and achievements

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• Providing proof of previous achievements, this may include reference from industry experts, past successes or evidence of financial stability.

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Having a team in place

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• Having a dedicated and a set team, which the incubator can mentor and work with to grow the business.

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Miscellaneous

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• Completing all the required legal procedures.
• Basic understanding of legal structures, accounting principles and marketing strategies.
• A good plan on how to use the resources provided by the incubator.

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Startup incubator program application: Bonus pointers

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Contents

Angel Investors

Accelerator / Incubator

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Angel Investors

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Grants & Schemes

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Leverage government schemes to ensure Poka Tech’s is risk free from external adversities. Government of Italy encourages start up by following exemptions.

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Why government schemes?

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The Italian government’s start-up policy introduced a flexible labor law with 6 to 36-month temporary contracts and a number of other privileges meant to ease the first stages of the life of a new start-up.

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How it can help Poka Tech?

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• Exemption from paying: (i) annual fees to the Chambers of Commerce; and (ii) other registration fees and duty stamps usually.
• The innovative start-up is exempt from regulations on dummy companies and on companies registering systematic losses.
• Easier compensation of VAT credits.
• Chance to collect capital through authorized equity crowdfunding portals

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Challenges Poka Tech can face

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• High level of bureaucracy in Italian govt.
• Time taking process.
• Economy is downsized by the impact of inflation, both covid and war-related.
• Complex regulatory environment, which often lacks clarity and efficiency

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Poka Tech should consider following 3 government schemes for funding & tax benefits

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Key Objective

▪The Guarantee Fund (Law 662/96) is a public guarantee (MISE), the purpose of which is to facilitate access to credit for businesses, replacing or accompanying guarantees of another nature and reducing the risk of the financing party on the guaranteed amount.

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▪The Smart&Start Italia programme provides interest-free loans to innovative start-ups.

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Key benefits

▪Business can receive an interest-free loan of up to 80% of the total investment.

▪ Start-ups in operation for less than one year are offered technical & management support.

The central guarantee fund

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Other funding sources

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Digital Transformation

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▪Business can get subsidized loan ~t 100 M euro, Interest free loan and tenure is 7 yrs.

▪For both types of financeable projects, the benefits are granted on the basis of a nominal percentage of eligible costs and expenses equal to 50%, broken down as 10% in the form of a contribution

40% in the form of subsidized financing

▪Invitalia is the National Development Agency, owned by the Ministry of Economy.

▪It manages all national incentives that encourage the birth of new businesses and innovative startups

▪EUR 5 million per deal

▪Direct guarantee or partial guarantee for loans.

▪Maximum duration 96 months and grace period of 24 months.

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Whats next ??

Poka tech can explore the possible govt schemes by applying through the website

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• Poka Tech can reach to central bank of Italy to discuss the business model and find out the regulations applicable as per the law.
• Submit an application, the Bank of Italy first assesses whether it is complete or not.
• if the application is not complete.
• if the application is not complete, the authorization process cannot begin or will be suspended until the additional information has been supplied.
• The completeness of the information provided is crucial to ensuring that the authorization process begins and the application is processed as smoothly as possible.
• Once the assessment is complete the loan is sanctioned based on the assessment.

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