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The COVID-19 pandemic has been reported in more than 175 countries and territories around the world.As of April 7, the disease caused by the novel coronavirus (SARS-CoV2) had affected 1,378,937 people, leading to more than 78,000 deaths. It has shut down business activities around the world, bringing some sectors to the verge of collapse. While governments and big companies are feeling the heat of COVID-19, entrepreneurs are definitely the biggest hit. The disease and the way the world is responding to it has left entrepreneurship in crisis. Small and medium businesses are suffering the reality, and there is a good chance that things will change for good even after the pandemic. Here are four ways the COVID-19 has left entrepreneurship in crisis:Emphasis Is Now On Survival Many entrepreneurs had serious expansion plans for 2020. Many had taken the necessary actions, signed the necessary contracts, and started adapting the strategies to become bigger. The reality of COVID-19 has taken everyone back to the drawing board. The primary objective of any entrepreneurial endeavor at the moment is to survive. This is a no brainer as there is no upside for any business that doesn't survive the crisis. Revenue Has Been Hit, and Will Take Time to Get Back To NormalA few businesses who are supplying products and services that are mission-critical or enablers of remote working and lockdown living are still doing well in terms of revenue. For the majority of other businesses, however, revenues have been hit. Contracts with cancellation clauses are getting terminated due to the uncertainties about the pandemic.Entrepreneurs are no longer able to fully rely on their supply chains as it is becoming increasingly obvious that more businesses may shut down soon. Factories are closed and businesses with physical outlets have been forced to close as society is pushed into lockdown, cutting out most revenue streams. The biggest question is when will this end. There is a good chance that revenue will not get back to normal for most businesses in the next 12 months.  Raising Money Will Be Tougher Going Forward Funding will stall even after we see an end to the menace of the coronavirus. Limited Partners who provide the funding that goes into the VC pot have been hit, either through their own businesses or through stock market crashes, and so the pipeline of funding will be increasingly reduced. Some investors will remain active, but we will likely witness smaller rounds of investments at lower valuations. Even for existing portfolio companies, the disruption of most business activities, and the sudden downturn in the market will cause a severe stall in funding. Emerging entrepreneurs will have to think outside the box to get funding. That being said, many governments around the world are offering grants and funding incentives to entrepreneurs who can provide new solutions to a COVID-19 and beyond new world order. Downsizing Will Take Center Stage As bad as this can be for some people, downsizing will be the way out for most entrepreneurs. This will be part of the survival strategies many businesses will adapt. Already, many employees have lost their jobs in some sectors.There is no way for things to get back to normal immediately afterward. Except for the very big companies, most businesses will have to do with fewer employers until they have recovered from the shock of lost revenues. Fortunately, many governments around the world are offering support schemes for employees who may otherwise have been made redundant, with the UK government’s furlough scheme a prime example. ConclusionEntrepreneurship is all about adapting to the inevitable changes. This does not mean that entrepreneurs are immune to global pandemics like COVID-19. The novel virus and the disease it causes has left entrepreneurship in crisis in many ways, and the points above are the realities at the moment. There are nonetheless opportunities for new entrepreneurs. The global recession in 2008 birthed the likes of Uber, Airbnb, WhatsApp, Slack and Pinterest.Now is the time to seize the moment.  

New governmental initiatives around the world are providing wider support for Employers, Businesses and the Self-Employed.This document contains a collated list of such relief programs for the following countries;Australia, Canada, China, Denmark, France, Germany, Hong Kong, Italy, Japan, Netherlands, New Zealand, South Korea, Spain, Sweden, United Kingdom, and the United States.You will find information relating to Tax, Financial aid, Employee Wages, Sickness support, and more.DOWNLOAD THE RESOURCE PACK HERE.Please share this with your network.Also, we have created a Linkedin group to discuss the challenges business owners and leaders globally are facing during the coronavirus crisis, and to find expert advice and guidance on how to manage the impact of these challenges - particularly as it relates to managing cash flow, legal compliance, immigration and team remote working.You may request to join the group here. 

Moving to a full remote setup, particularly in a quarantine environment, is a new experience for all of us, and one where we’ll have to be very deliberate with our actions and communication to make it go well. In this guide, we cover off a few things we especially want to look out for: communication, keeping the [company] community, and looking after our own well-being. DOWNLOAD COMPANY GUIDE TO REMOTE WORKING

We are excited to announce that, due to our remarkable growth over the last one and a half years, we now have expanded into Africa! Our Centuro Global Africa office officially opened its doors on Monday 16th, March 2020 and is situated in Cape Town, South Africa. So, whether you’re an African based business looking to scale out of Africa, or an overseas business looking to scale into Africa, we are here to help facilitate your global expansion plans. You can come to us for business growth services including; Legal Immigration Intellectual Property Scaling & Expansion New Market Entry Raising Capital Pitch Deck Creation Business Development HR Support Office Sourcing Investor Introductions and much more. We chose South Africa as our first Centuro Global Africa hub because with a GDP worth USD 294 billion, South Africa is the 40th largest economy in the world and the third largest in Africa.  They are also home to the third largest entrepreneurial hub in Africa, just behind Nigeria and Kenya.   A report commissioned by Google highlights the huge opportunity within SA;  “Much of the support has focused on creating early-stage startups and entrepreneurs, with little focus on mapping out the full journey of entrepreneurship and creating support initiatives along the way…” We are ready to change that narrative by assisting South Africa in reaching its full potential by improving the commercial outlook for entrepreneurial talent and innovation. Heading up the operation will be Seraj Toefy. Seraj is a serial entrepreneur based in Cape Town. He also lectures Entrepreneurial strategy and management at a few leading universities throughout Africa and is a regular guest speaker on the topic in Europe.  He will provide on the ground analysis and perspective to any global client wanting to scale into Africa, while assisting African companies wanting to scale globally.  You can contact him on Linkedin and our website. You can also follow what we're doing on our social media channels; @centuroglobal. We would like to Thank You for your continued support in Centuro Global. We are pleased to be expanding our hub into diverse regions across the globe in a pact to grow more successful startups. To celebrate, we are offering any business that is thinking about expanding into Africa, or from Africa into the UK, a consultation. Contact us today or email us at hello@centuroglobal.com

The UK government has finally released some of their actual plans for the “new immigration system” after Brexit. The new system is alleged to be more employer-led and will be implemented on 1 January 2021.The details released on February 20th, do not cover family migration, asylum and students but covers workers (“fiscal migration”). The new UK’s point-based system As the UK will leave the UK by the end of 2020, the government has released their plans to “compensate” the cessation of the EU freedom of movement of people. Businesses and workers have been quite anxious about how the UK would shape their immigration system after Brexit and this morning the Home Office has finally disclosed their plans (some) on introducing a new UK’s points-based system following the Migration Advisory Committee (MAC) report published last month.https://www.gov.uk/government/publications/migration-advisory-committee-mac-report-points-based-system-and-salary-thresholds 1. Skilled WorkersThe Home Office will bring the skills threshold down from RQF6 to RQF3. These will open a door for more workers to become eligible to work in the UK. All other workers with lower skills than RFQ3 are not going to be benefited by any specific route, but the government will expand the pilot scheme for seasonal workers in agriculture providing 10,000 places for such individuals. 1.0. New Salary Threshold Migrants still need to meet 70 points in order to be eligible to apply for the visa and have a job offer from a Home Office approved employer.The gross annual general minimum salary, currently used on the Tier 2 General visa category, is going to be reduced from £30,000 to £25,600. Migrants must still be paid according to the minimum “going rate” salary of their respective Standard Occupational Classification (SOC) codes, which can be higher than the new salary threshold. â¦ Trading Points and salary reductionThe new factor introduced is that migrants will be able to “trade” some of their jo characteristic qualifications towards points if their salary is going to be less than the minimum threshold or “going rate” but never less than £20,480.Migrants can “trade” to obtain points if:⦁ their job is in the shortage occupation list (as designated by MAC); or⦁ they have a Phd in a subject relevant to the job; or⦁ they have a Phd in STEM (science, technology, engineering, and mathematics) subject relevant to the job.Salaries can be reduced as follows:⦁ the job is in the shortage occupation list (as designated by MAC) - 20 % reduction⦁ the migrant has a Phd in STEM subject - 20 % reduction⦁ the migrant has a Phd in non-STEM subject – 10 % reduction⦁ DependantsThe Home Office has confirmed that as now, skilled workers are going to be allowed to bring their dependants to the UK. No further information or details have been provided on this.⦁ Global Talent visa categoryAs expected, the Global Talent Visa will be extended to EU citizens who will be able to come to work in the UK without a job offer, as long as they have been endorsed by a competent body.⦁ Unsponsored visa routeThe government mentioned that they are working on a broader unsponsored route which will allow the most highly skilled workers to come to the UK without a job offer. No further details have been provided on this either.⦁ StudentsStudent visas will also be points-based system managed where, students must have an offer from an approved educational institution, knowledge of English and funds to maintain themselves in the UK. Again, nor further information or details have been provided on this visa category. â¦ EU CitizensThe government has confirmed that EU Citizens will be treated the same as non-visa nationals, where entry clearance is not required to be issued before coming to the UK for a maximum period of six month, but work is not permitted.The UK unilaterally will allow EU citizens to use the e-Gates but stressed that this policy will be kept under review.EU Citizens will be able to apply for visas using their smartphones to self-enrol face biometrics and fingerprints will not be required. Other citizens will have to visit a Visa Application Centre (VAC) abroad to enrol their biometrics. A physical visa or card will not be issued to EU citizens. Therefore, they will be able to prove their immigration status in the UK electronically.Article written by Michael Rodriguez.If you would like to get more information on the above or have any question on Immigration please call us on +44 (0) 207 458 4600, or send an email to hello@centuroglobal.com

Following the UK leaving the EU on Friday 31 January 2020, albeit in a transitory period until the end of 2020, there was one immediate positive outcome for UK based memelords and meme fans alike. The anticipated “Meme Ban” will not be brought into UK law.What is the so called ‘Meme Ban’?The EU Copyright Directive is a controversial piece of legislation that is due to be implemented across EU Member States. It addresses how copyrighted material is shared on online platforms and its most controversial component is Article 17, which requires online platforms to stop copyrighted material being shared on their platforms. With so much content shared between users of online platforms, there have been fears that such platforms will be left with no choice but to use automated filters to takedown and remove copyrighted content. The goal being to redirect revenue from the tech giants to the original creators of the content.Given this new and very significant burden of responsibility added to the shoulders of online platforms, Tech giants such as Facebook, Twitter and YouTube have naturally been against the Directive. Whilst memes technically fall under the copyright exception relating to content that is merely “for purposes of quotation, criticism, review, caricature, parody and pastiche”, the fear is that the automated removal technology that platforms may implement will not be able to distinguish between genuine copyright infringement and excepted copyright material. The internet therefore coined the term ‘Meme Ban’ for the EU Copyright Directive.However, UK Minister for Universities and Science, Chris Skidmore, has confirmed that the UK will not implement the EU Copyright Directive now that we have left the EU and so memers can all rejoice.Why has the UK opted not to implement the EU Copyright Directive?            The UK was actually a key player in the original inception of the EU Copyright Directive and originally supported it. If the UK was really not keen on the Directive or on Article 17 (previously Article 13), as a strong EU player, it could in fact have blocked it. Many are therefore now suggesting that this reversal of adoption of the Directive is a mere PR stunt.The topic of copyright freedom online has been hotly debated and will continue to be hotly debated with a very tricky balance between freedom to share content online and obtain knowledge versus the right for creators to control or benefit from their content. Legislators argue that online platforms are the one benefitting from the content at the expense of all the creators – the artists, writers, journalists, and so forth.Will the decision not to implement the Directive benefit business?            One industry that will particularly be hit hard by the lack of implementation is the music industry, who have been campaigning for years for platforms such as YouTube and Facebook to face more responsibility for tackling content that contains infringing content belonging to record labels, songwriters and artists alike.There are suggestions that, on the other hand, this could benefit startups and smaller platforms who cannot afford to implement the technology required to scan and remove content. Julia Reda, a former MEP for the Pirate Party Germany, predicts that “not implementing Article 17 makes the UK more attractive for running platform businesses”. However, the Directive does not require smaller companies to act in such a manner regardless. Any companies that meet all of the following 3 criteria would not have been required to implement takedown technology:It has been around for less than 3 years;Annual turnover is below €10 million; andIt has fewer than 5 million unique monthly visitors. Furthermore, the lack of implementation of this law is unlikely to be a significant consideration for many businesses about whether to do business outside the EU, in comparison to the other consequences of Brexit.Not much will practically change over the next 11 months, but for now we can all rest easy that we can share and enjoy memes without any fear of copyright infringement.

‘Why Did You Start Your Business?’Founders get asked this all the time. What made you do X and why did you choose Y? Founder motivations differ and can be incredibly broad. It’s undoubtedly a blend of timing and inspiration, but ultimately what motivates us as founders is vital to understand.Noam Wasserman’s, The Founder’s Dilemmas, examines early stage decisions by entrepreneurs that can make or break a startup and its team. Wasserman argues that in the majority of cases, the motivation bottles down to a shoot-out between ‘Rich’ or ‘King’:‘Rich’ – This is self-explanatory where money is the name of the game. This motivation is where a company's purpose is typically seen as a vehicle to deliver shareholder profit (and ultimately build the founder’s personal wealth). ‘King’ - Wasserman describes the motivation of some founders stemming from running and controlling their own business empire. Power is the driving force here.‘So, Which Is Better - Rich Or King?’Firstly what does this “King” type founder look like? Are they micro-managers who try to control every aspect of their business? Potentially yes, but not necessarily. The key point of control is the control of the equity and likely resulting control of the board. Founders who maintained this type of control in their business typically exited at lower valuations, with lower returns or in most cases did not exit, as the company stalled as a “Zombie” or simply failed.It may seem counter-intuitive that, in ceding more equity, co-founders and investors would lead to significantly higher returns. However, studies repeatedly show that founders that are “rich” motivated will achieve their goals with less control. An element of this is obvious - selling equity to an investor who injects both financial and social capital into a business will likely have a better chance of success - sure you’ll lose some control, but sometimes you have to accept your weaknesses and bring others in to grow.A great example of knowing when and how to cede control is often the CEO position. For startups that are growing fast, strong leadership to make decisions and set the company direction is necessary. The qualities of a top CEO will differ from company to company and opinions on what makes good CEOs are constantly debated. Ultimately, we can confidently say that the founding CEO is not necessarily the best person to run their company. Many founders have visions of being the next Steve Jobs or Bill Gates, founding a large company and running it for many years. However, Wasserman’s research of hundreds of American startups revealed that within three years of founding the startup, 50% of founders were no longer the CEO, and fewer than 25% were in the top seat when their companies went public. In fact, four out of five founders from Wasserman’s study were actually ousted from the CEO post, a direct challenge to this role of King. This suggests that, more often than not, foregoing the glamour of being a King, and instead pursuing Rich is the best route to growth. ‘One Step Backwards, Two Steps Forward’The control point is where the founder’s dilemma is felt hardest. Professional investors (VCs and Super Angels) will sometimes push to replace the CEO early since they know that everyone’s financial returns will be maximised by implementing experienced leadership. Admittedly, this isn’t always the case and/or investors aren’t always right. Sometimes founders can be stepped down too early, thus calling disruption or stalling company growth. The founder has the initial vision, sees the opportunity and hires people to help build according to that vision. Indeed, super successful VC firms such as Andreessen-Horowitz (A16Z) are well known for much preferring to back founding CEOs. However, AH are one of the few exceptions.Another key consideration is that at different stages in the lifecycle of a startup, different skillsets will be required. For example, whilst a technology minded founder might be the best person to lead the company at an early stage, more business acumen and experience in marketing and sales may be required as the company grows. Therefore, the more successful a startup is at an early stage, and the more equity and board control that is given away, the more likely that the ‘successful’ founding CEO will be replaced by someone with more experience and/or different skillsets. Take the example of Google - founded by Larry Page (Founding CEO) and Sergey Brin. The co-founders made a great team but were initially inexperienced and unable to captain the incredible growth that Google and its technology were experiencing. Page knew he was not ready and with his board hired Eric Schmidt, who helped mastermind Google into the incredible technology giant it is today. Throughout Schmidt’s tenure, Larry Page importantly stayed involved at the board and executive levels. Then in 2011 - a whole decade after he initially stepped back - Page was now ready to retake the reigns and lead Google to their next stage of growth. Google really is a perfect example of the founding team realising the huge potential their venture held whilst accepting their own shortcomings in relation to this. In their case, it made total sense to bring others in to ‘run’ things. Sure, ultimately Larry Page returned, but this was far from guaranteed in 2001 when he stepped back from his creation - what was guaranteed though, was that Schmidt presented the best opportunity for Google to kick on to the stage of hyper-growth.So, how about Steve Jobs? The infamous control freak, who many would argue achieved both Rich and King…Even Jobs accepted he was not right to be CEO of his booming company in the early 1980s. Upon accepting this, Jobs went out and hired Pepsi-Cola’s President, John Sculley. In hindsight, this was not the best hire (Apple’s prospects under Scully deteriorated). However, the decision to bring someone in was correct - Steve Jobs was not the right person at that time. It took the strenuous experience of acting CEO of NeXt Computers and later Pixar to build Jobs into the ‘iCEO’ we all know about today. Therefore, even Jobs faced the Rich vs King dilemma and learnt to avoid King.In summary, all founders need to understand their motivations for their company. Do they want to maximise returns or retain control and power over their company? If it is the latter, they need to consider whether they are ready for such a role. Founders who understand that they are motivated more by wealth than by power will make the best decisions to help the company scale, including bringing in a more experienced CEO. On the other hand, those motivated by control may make more decisions that enable them to retain power whilst actually hindering the overall growth of the company.It’s a prevalent dilemma because often founders face the choice to lose control to increase their wealth. However, it’s safe to assume that most entrepreneurs are motivated by maximising profit - therefore, avoiding the enticing trap of King is a must for those looking to scale effectively.    

“Marketing Data” can sound like typical industry jargon that means nothing and has no basis in the real world. Or worse still, flashbacks to Cambridge Analytica and data leaks can leave people frightened of the negative capabilities that modern data control brings.The truth is, the best ‘marketing’ is using any information you get from your customers to enhance the promotion of your business. The best marketers in the world know that utilising data to guide creativity is the key to marketing & business success. If we could give one piece of advice to any small business it would be: get a handle on your marketing data ASAP. Data is the new gold.On the surface, marketing data is as broad as any and all audience interactions. In reality, decisions can currently be made from insights into something as specific as click percentages of 16-25-year-olds within 15km of your business. In effect, marketing data is all the information that comes from interactions with an audience, in person or online. All of this is incredibly useful when it comes to growing your business. Why?Here are our three key reasons why business success and marketing data are inextricably linked:1. Marketing Data Tells You Who Your Customers Are. This might sound very strange: you know who your customers are, right? You interact with them on a daily basis, but do you know their age range, their business sectors or their business size? Can you plot that data on a graph that tells you your ideal customer persona? There are tools available that will track many of these key pieces of data for you – the more you know, the better you can target leads.2. Marketing Data Saves You Money. If you’re marketing now, then you’re spending money. Even if this is just business cards, flyers and branding - your logo and even your business name are marketing. Even spending your time on your Twitter page costs you time and, as a wise man once said, ‘time = money’. If you know more about your market or your customers, then you’ll be able to spend your time or money better, maybe even automating parts of your acquisition funnel like we have at CG.3. Find Out Your Best Customers. Do you know which customers make you the most money? The Pareto principle or the 80/20 rule states that the likelihood is that 80% of your revenue comes from 20% of your customers (we’ll get in to how to use this a bit later). Put simply, you probably have an ‘ideal’ customer - someone who you add the most value to and someone who, in return, is a loyal and reliable revenue stream. So, the data from your marketing can give you incredible insight into your business and your customers. But, how can you use this to grow your business? Here are our top 5 ways you can use your marketing data: 1. Target the right people. Above we said marketing data could be used to save you money and time. It pays to be more focused. If you find from your marketing data (for example) that 80% of your customers are middle-aged women, for example, then all your marketing efforts should keep this in mind. Do you know which social media your customers prefer? If they’re all on Facebook and not Twitter, then any time you spend on Twitter is wasted. Unless you have money or time to burn, it’s essential to maximise everything you do.(As an aside, if you do have a bit of money to throw at your marketing next month, think about saving time by outsourcing some of your outreach.)2. Target people when they need it. This is one of the best uses of marketing data: sell to your customers when they need it. This isn’t as simple or easy as focusing on one social media - there are few ways to effectively do this. If you’re an online business or conduct any activity online, then you really should look at Facebook’s Pixel for starters. It’s their product that tells you which customers want to buy what and even indicates when they want to buy it. It’s powerful, and there isn’t enough space to explain it here, but it’s well worth the effort to add. Read up on it here. But, what if you’re not an online business? Well, in that case, when are your products typically used? If you sell caffeinated drinks, then 8:30 in the morning is a great time to target your customers. If you’re a gym, then January and May are pretty good times to focus. The best thing is marketing data will help you make these decisions by showing you when to focus and whom to focus on (more in number 4).3. Understand Wasted Effort. Ever heard the phrase “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”? (John Wanamaker (1838-1922)). This old saying used to be the case for marketing, but, using data, you can know precisely what works. You can see where your customers click (tools like bit.ly are fantastic), you can use data to see which of the places you’re advertising generate the most revenue. This is similar to targeting the right people since you can double down on everything that works well and cut everything that doesn’t. Taking John Wanamaker’s formula, you’re practically doubling your marketing effect, at half the cost.Think about using landing pages and heat mapping plug-ins to fully visualize where your customers are most interested. Again, most agencies should be able to help you sort this and the easy tech available nowadays is game-changing.4. Focus on High-Value Customers. Throughout this article we’ve mentioned focusing on key targets, demographics & times. All of this comes down to the 80/20 principle. It’s one of the more fascinating rules in business and economics.It came from an Italian economist who was examining peas and discovered that most of the peas come from a minority of pods; usually split by 80% of the benefit (peas) coming from 20% of the participants (pods) (hence 80/20). Over time the same phenomenon can be seen in business: it’s staggering that 80% of revenue can come from just 20% of customers. We’ve just finished working with a company where the split was actually 92%/8%.This doesn’t only apply to revenue; you could find that 80% of your new customers come from just 20% of your marketing: giving you a clear path to ramping up your successful marketing. The key here is to focus on the aspects that are working and ‘double-down’ on those.This is a big topic, with lots of examples and research conducted; Tim Ferris has done much work in this area. You can use your marketing data along with the 80/20 principle to unlock a business superpower.5. Plan your cash flow far, far ahead. This might seem mundane, especially compared to some of the interesting principles we’ve touched on, but it’s incredibly important. Do you know how much it costs you to acquire a new customer (your ‘Cost Per Acquisition’/ CPA)? This number is one of the most critical numbers any business owner can have, as it means that, for every dollar spent on advertising, you’ll know how much new custom/revenue you will get. Once you know this, you can plan to grow bigger with ease, and you will be able to truly understand what is needed to grow. Reinvesting revenue is a no-brainer when you have a clear calculation of the returns you’ll see next quarter. This article has only been brief overview of marketing data and what it can do for your business. There is so much more to say but a quick point (I see a lot of people complaining about) is that spreadsheets don’t have to be boring - they can unlock the potential of generating more revenue by spending your time and money effectively. Instead of seeing marketing data as boring, view it as a key tool to growing your business. Since there’s nothing boring about growing your business, get into using your data effectively!

“What is your valuation?”“£100,000 for 10%?”The above seems like a fabricated scenario made for Dragons Den or Shark Tank, but at some stage, every investor will want to know: “what is your valuation?” Often one of the most daunting questions that a VC or angel investor can impose on you is around valuation and the distribution of your equity. Without wanting to get tangled up in trying to cover behavioural economic signalling, it’s best to regard answering this correctly as more of an art than a science. At any investment stage, when an investor is asking for your valuation they are looking for many things. Principally, they want to gauge how attractive the deal on your startup’s equity is - they can then make any further decisions anchored to this number.There is a lot to look at when it comes to tackling your valuation. You’ll hear terms such as ‘pre-money, post-money, EBITDA multiple’ thrown around and it’s easy to get lost in the jargon (there’s a handy Jargon Glossary at the end of the article in case you run into any new terms whilst reading).  What really matters is how your stated valuation affects the investment deal for both you, and the interested party.Every interaction with an investor will act as a signal. The way you dress, pitch, your tone of voice and your enthusiasm are all factors that are hard to control. Believe it or not, we’re seeing data that suggests even being enthusiastic in pitches could actually hurt your chances of success! The point is that interactions can be erratic, and it’s near impossible to predict their effects on individuals.Nonetheless, there is no need to panic! Your valuation is one thing that is totally in your control.Until you have your first lump of capital invested, you are entirely free to move your valuation to suit your aims & business ambitions.Sure, we’re framing this potentially daunting autonomy as being a good thing, but if you can’t get excited by risk, then maybe fundraising isn’t for you after all... So, Why Does It Matter What Valuation I Say?How does what I say affect the deal and what are these behavioural economic signals I’m sending?If you state your valuation too high, you could seem delusional or price future investors out of the deal. Too low and you might imply a lack of faith in your idea and team or, even worse, sell your equity too cheaply and as a founding team be stuck with a minority stake in a booming business one day.You’re sending an important signal and you must use this as a tool to your advantage. Signalling isn’t something that many accelerators or incubators will adequately teach you. Being lucky enough to get introduced to investors is one thing, but knowing how to manoeuvre that room once you’re in it is a whole new game.As a founder, equity in your attractive business is your one pivotal asset and will be a central factor in any investment negotiation. Any deal-making is based on tradables as seen below: P1: I trade X for YP2: What if we traded my Y for your X and your ZP1: We can make it work if we trade my X and Z for your Y and W. Deal?P2: Deal The letters in the above negotiation are tradable; each one adds more value to the deal and eventually leads to an agreement that is mutually beneficial to both parties (at least that’s the aim). There are many tradables in an investment deal (board seats, liquidation preferences, shareholder rights, pre-emption rights, drag-along rights etc.) and you should become familiar with these terms before embarking on any deals. While we’re not fans of jargon, sometimes it does pay to be in the know. Check out our glossary below where you can find definitions to all of these terms and more.In almost all early-stage financing rounds what matters most is what the investor ‘gets’ for what they put in.In effect, your stated valuation is your opening position and (as any game theorist or expert negotiator will tell you) this sets the stage for the entire rest of the deal. How Do I ‘Use’ My Valuation?The valuation you state first, i.e. the one that is in your pitch deck, isn’t necessarily going to be your final agreed figure. As a founder, it’s vital to know the equity percentage that you want to end up at and it is prudent to have an upper and lower bound as to what you will accept.Once you know and understand your personal (or team’s) percentages, then you are at an advantage as you can enter any negotiation or pitch with clear parameters of what you will accept and clear parameters of what you will walk away from.After you’ve settled on ideal outcomes, you can focus on what information you can deliver with your valuation.In most cases (like any negotiation) it is best to open at a high asking price, as it’s likely you’ll see efforts to bring the valuation downwards, so it’s good to leave room to ‘cooperate’. Additionally, opening with a reasonably high valuation tends to signal confidence.Since you’re able to be flexible from pitch to pitch about your valuation, you can fluctuate your valuation number easily depending on whom you are pitching to. For example, when meeting professional VC investors with established funds, a £1m+ valuation at seed stage is not untenable (in fact, VC’s won’t really get excited about anything lower than this). In comparison, an angel investor certainly could be scared off by such a high valuation. Tailor your valuation to what works for you, and what you expect to work for the specific investors you’re targeting.On angel platforms (e.g. https://www.syndicateroom.com/) or equity crowd funders (e.g. https://www.seedrs.com/) it’s often prudent to set your valuation low to encourage rapid micro-investments. As you gain momentum and reach your milestones you could end up raising considerably more than your initial ask at a much higher valuation (although watchout for down rounds).Above all, try to simply look at valuation (and investment generally) as a tool to grow and accelerate your startup. It isn’t just a signalling method and it certainly isn’t a vanity metric, it’s a real number that will affect your startup for years to come. A massive valuation is guaranteed to make headlines, but it’s certainly not guaranteed to bring successful growth. Finally, Is Valuation Everything?No.As discussed above, there are numerous factors in play during an investment deal.For example, take these two deals:A: £400,000 for 20% equityB: £200,000 for 10% equityBoth of these deals would give the startup a pretty tantalising pre-money valuation of £2 million. However, deal A gives the startup far more rope in terms of working capital for a sustained burn rate than deal B, at the cost of surrendering more equity. Only you can decide which is better - it’s when you’re presented with decisions like these that you’ll be grateful for the mentors and team around you.Ultimately, a stranger could invest £100 into your startup for 0.00001% equity and you would technically have an instant ‘unicorn’ (£1billion+ valuation). In this case, your valuation would be a dangerously misleading vanity metric, and certainly unimportant for you and your business. A Complex ProblemIf you’re dedicated and talented enough to fundraise, your valuation/s will be one of the most prominent factors in your career. It’s fraught with problems and since it’s often little more than an educated guess, it makes sense to get the right help in early before you start making commitments and receiving capital.At Centuro Global, we assist businesses in getting the right advisory support from our unique network of professionals.Our team comprises industry experts within the legal, finance, technology and marketing sectors. We have led companies, advised major brands and contributed to the growth and success of numerous small to medium and large businesses around the world.Valuations are tricky. It is definitely an art not a science and, put simply, it can be a disaster if you get it wrong. However, as the best entrepreneurs have shown over time, your valuation can equally be a significant asset when you get it right. Jargon Glossary:Pre-Money & Post-Money Valuation - The value of private companies is very subjective and usually comes down to negotiation.Pre-money valuation is the value you place on your company before going out to find investment.Post-money valuation is simply the pre-money valuation plus the investment.The higher the valuation is, the less dilution there will be as the company will need to issue fewer shares for any capital raised. However, if the valuation is too high it will be off-putting for potential investors. As always, balance is key – don’t be too greedy but don’t sell too cheaply either! EBITDA Multiple -This financial ratio compares a company’s Enterprise Value to its annual EBITDA.The Enterprise Value considers the startup’s entire market. For example, all ownership interests and asset claims from both debt and equity are included.EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization and is a metric used to evaluate a company’s operating performance.Put simply, a low EBITDA ratio value indicates that the company could be undervalued, and a high EBITDA value suggests that there may well be an overvaluation. Importantly, it’s not uncommon for prospective buyers and investors to push for a lower valuation to get more ‘bang for their buck’. Pre-Emption Rights - These can be set-up to give a contractual right for existing shareholders to maintain their proportion of ownership of the company. Put simply, they do so by acquiring their proportional share of any additional stock issuances (e.g. if the company goes public). This right ensures that a shareholder's ownership interest is not diluted through the issuance of more shares.Also known as subscription rights or subscription privileges, these can be really important in negotiations as they allow a shareholder to be able to protect themselves from having their shares devalued over time. Equally, they can prevent selling or transferring shares to another party whom they may not wish to be in business with, thus potentially blocking future deals. Down Round - Generally viewed as a very negative way to raise capital for founders; a “down round” is when a company sells shares of its capital stock at a price per share that is less than the price per share it sold shares for in an earlier financing. Investors will often cement protections against down rounds. They are typically issued new shares to ensure their stake in the company isn’t diluted by new investors acquiring equity. However, that has to come out of someone else's proportional stake - typically founders.Additionally, down-rounds can be seen as a backwards step for a company as the valuation shrinks. This is bad for a number of likely obvious reasons and is likely to hinder future investment opportunities and damage employee morale. Drag Along Rights -An agreement that enables a majority shareholder to effectively force a minority shareholder to join in the sale of a company. A key caveat is that the majority owner doing the ‘dragging’ must give the minority shareholder the same price, terms, and conditions as any other seller. Something to watch out for as it can suggest an investor’s exit strategy doesn’t align with yours. Tag Along Rights -Effectively the opposite to Drag Along Rights, whilst not mentioned in the article, are very important for some investment deals. Also known as 'co-sale rights', they occur when a majority shareholder sells their shares; a tag along right will entitle the minority shareholder to participate in the sale at the same time for the same price for the shares. These rights are meant to protect minority holders from being ‘left in the cold’ after a sale of large proportions of the equity that don’t involve them.

Networking.  The chances are, the above word either fills you with excitement or a sense of dread. Nonetheless, regardless of how it makes you feel, networking is essential for your startup.  For many people, networking is practically intolerable. Networking events can sometimes feel forced and may even seem fake and artificial to some.  In reality, though, the functional purpose of networking is about as natural and authentic as it gets. “People do business with people.”   It’s an age-old saying but still holds true nonetheless. In fact, in the modern digital ecosystem, the ability to engage people face-to-face is a dying art. Think back to that time you gained a client purely off the back of a chance encounter. Or how about that time an old friend or colleague just threwchucked some work your way because they could trust you would do a good job, at a fair price. These examples stem from networking in some shape or form. We’ve even heard a story about a startup landing their first major client by literally spilling coffee on a stranger at an event in London! All it took was a chat and a bit of luck - fortunately, the recipient happened to be in the market for his product (and a new shirt!) If your business has a unique founding story, or interesting people/products behind it, what better way is there to get people enthused in your brand than by simply telling them about it? Instead of throwing money at digital promotion, a savvy startup should be on the lookout for the dozens of free networking events going on in London every month. Sure, you probably won’t meet any massive prospects at a free event, but, you are guaranteed to meet like-minded people.  People do business with people and nearly everyone prefers to do business with people they know personally. People you’ve met and built a relationship with will remember you and drive sales into the future.  There aren’t many better feelings than building a consistent revenue stream just from referrals - clients you’ve gotten to know in-person are more likely to want to refer you business. We all have clients who we’ve developed personal relationships with and they’re the clients who we reliably retain going forward. Ultimately, networking is never going to be for everyone. Some people can’t get enough and attend multiple events every single week in London. If you’re one of those lucky few - keep at it! If you’re in the larger camp of people who can’t really get excited by spending an evening networking, start with one event a week and build up from there. If you know that you’ll only be at a handful of events every year, you’re more likely to make the most of every encounter and find yourself enjoying it much more.  Something we’re crystal clear on at CG is the absolute need for entrepreneurs to surround themselves with the right people. We tailor our events to ensure that the right people are in the right room to make meaningful connections. To stay in the loop on great upcoming events and start surrounding yourself with an A-Team, get involved with Centuro Global today!