Download Key Stages in FP Project Applications

9th International Venture Capital Forum
a brief user’s guide
Help-Forward Network
Epaminondas Christophilopoulos, [email protected]
Presentation Outline
Financing a venture – Success factors
Sources of finance
Venture Capitals
The 9th International VC Forum
 The 8th International VC Forum - statistics
Hints
Critical Success Factors
 A balanced team with track record
IPR & an Exit strategy
 Proof of Concept & Competitor analysis
 Clearly defined market
 Defensible competitive advantage
Investment & Investors-
is it Fundable?
A good idea - New, different?
Feasible - Dream or Vision?
Commercially Viable - Will it make money?
A winning team?
Investment & Investors –
Finding your prince
Final Stage
Fourth Stage
MATURITY
DEVELOPMENT
Third Stage
“Kiss the Frogs!”
START-UP
Research
Project Plan
Product
Commercialise
Expansion
Development
Business
R & D - (Pre-Launch)
Concept
Growth
EARLY STAGE
Second Stage
Initial Stage
Growth
Design Spec.
Plan
Second Round
M&A
Prototype
First Round
Development
Seed Capital - cash and "sweat equity" and Grants
Bank Loan, IPO, Corporate Finance, Venture Capital
Venture Capital, Business Angels, Trade Buyers, IPO.
EXIT
Sell the Porche, Friends, Family, Government, 'maybe' Business Angels
Investment & Investors –
Stage: Research &
Development
Type of Funding:
Seed Capital & Grants
Source of Funds:
Family, Friends and Government,
some Business Angels and VC’s
Investment & Investors –
Stage: Start-up &
Early stage
Type of Funding:
First Round & Second Rounds
Source of Funds:
Venture Capital, Business Angels,
Corporate Investors
Investment & Investors –
Stage: Development &
Maturity
Type of Funding:
Expansion & Growth
Source of Funds:
Bank Loans, Factoring, Corporate
Investors, Venture Capital, Company
Pension Fund, IPO
Venture capitalists
Characteristics
Who are they?
What do they seek?
How do they operate?
VC: characteristics (part I)
 Objective is profit
 Professionally managed
 Usually other people’s money
 Minimum size generally Euro 1m
 Many higher: up to Euro 20m
VCs: characteristics (part II)
 Few focused on early stages
 Usually time driven - focused on exit
 Selective
 Go for large, global markets
What do VCs seek?
 Operating companies
 Return
 Control / information
VCs: operating companies
 Growth in rapidly growing markets
 Markets must be large and global
Large = E1-2bn potential sales
 Markets should be relatively empty
 So tend to seek technology markets
VCs: return (I)
 Profit through sale or flotation
 Annual return on investment of 40 to
50%
OR
Euro 1m in
and four years later
Euro 4m out
VCs: return (II)
In three years out of ten companies
 One will be a star
 Two will be OK
 Five will be unchanged
 Two will die
VCs: control / information
 Portfolio balance/focus
 Negative control
 Minority protection
 Information flow
 Control over exit
 If lead investor than proximity
How do VCs operate?
 Intake
 Due diligence
 The deal
 After the deal
VCs: intake
An example (VC with 4 professionals)
 1000 proposals a year - five a day
 Read 200 business plans (the rest are
rejected from the first read)
 Visit 50
 Investigate 10
 Offer on 5
 Invest in 2 (success rate 1-2%)
VCs: due diligence
During three to six months
 Research market
 Research people
 Research claims/liabilities
 Study strategy
 Assess exit routes
VCs: after the deal
 Board representation
 Monthly or quarterly reporting
 Support varies by investor
 Hands off unless going badly
 Constantly looking for the exit
Investment & InvestorsPension Funds
– The investment circle
Insurance
Companies
Corporate
Finance
Venture Fund Liquidated
Investment and
Investors
Shareholders
Entrepreneur
Venture Fund
Stock Market
or Trade Sale
The 9th International VC Forum (1)
Register NOW to the largest international venture capital forum in
Southeast Europe!
The 9th International Venture Capital Forum is a unique two-day event
dedicated to raising financing for ambitious and dynamic entrepreneurs,
business oriented researchers and new technology-based firms in
Southeast Europe.
Businessmen, researchers, policy makers from Southeast Europe and
East Mediterranean are invited to attend, present their business ideas
and discuss venture opportunities in dedicated bilateral meetings.
The 9th International VC Forum (2)
Place: Hilton Hotel, Athens
Date: 19-20 June 2008
Venture capital firms are requested to present their availability and
interest to explore the Event Portfolio by sending company's profile and
contact details to [email protected] by 30th April 2008.
Entrepreneurs and researchers are invited to submit their business
plan the latest by 12 May 2008 [email protected]
The "Best Business Plan Prize" will be awarded to three Business
Plans selected by the VCs.
The 8th International VC Forum (1)
Geographical Distributions of
BPs
Country
(%)
Greece
37
69%
Turkey
8
15%
Bulgaria
4
7%
Greece
Turkey
Cyprus
4
7%
Bulgaria
Cyprus
Germany
1
2%
TOTAL
54
Germany
The 8th International VC Forum (2)
Thematic Distribution
SECTORS
(%)
IT
20
37%
Consumer Products
15
28%
Health & Safety
5
9%
Telecommunications
3
6%
Consulting /
Services
3
6%
Electronics
2
4%
2
4%
Energy
2
4%
Environment
1
2%
Transport / logistics
1
2%
54
100%
Industrial
Applications
TOTAL
IT
Consulting / Services
Consumer Products
Electronics
Environment
Transport / logistics
Health & Safety
Industrial Applications
Telecommunications
Energy
The 8th International VC Forum (3)
Market Focus
market
(%)
Global
26
48%
National
13
24%
European
10
19%
Local
5
9%
TOTAL
54
Global
National
European
Local
The 7th International VC Forum (1)
Geographical Distribution of BPs
Country
(%)
Greece
37
47%
Israel
10
13%
Turkey
6
8%
Bulgaria
5
6%
Romania
5
6%
Cyprus
4
5%
Czech Republic
3
4%
Poland
2
3%
Slovenia
2
3%
Esthonia
1
1%
USA
1
1%
Latvia
1
1%
Great Britain
1
1%
Hungary
1
1%
TOTAL
79
Greece
Israel
Turkey
Bulgaria
Romania
Cyprus
Czech Republic
Poland
Slovenia
Esthonia
USA
Latvia
Great Britain
Hungary
The 7th International VC Forum (2)
Thematic Distribution
Sectors
(%)
IT
24
30%
Consumer Products
9
11%
Electronics
8
10%
Telecommunications
7
9%
Industrial Applications/ materials
7
9%
Health & Safety
6
8%
Consulting Services
6
8%
Energy
6
8%
Environment
4
5%
Transport
1
1%
Aeronautics & Space
1
1%
TOTAL
79
IT
Consulting / Services
Consumer Products
Electronics
Environment
Transport / logistics
Health & Safety
Industrial Applications
Telecommunications
Energy
The 7th International VC Forum (3)
Market Focus
market
Global
(%)
37
47%
National
20
25%
SA Europe / Balkans
15
19%
European
7
9%
TOTAL
79
Global
National
European
Local
Hints
 Invest on preparing a realistic Business Plan
-Present competition/risks together with
opportunities
-Clearly define markets
-Present financial needs and 5 year investment
plan
- Describe clearly your competitive advantage
- Executive Summary
 Present attractive earnings/cash flow (3050% return for investment)
 Present realistic exit strategies
Additional info
Help-Forward Network
Epaminondas Christophilopoulos, [email protected]
9th International Venture Capital Forum
http://www.vcforum.gr