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MSC Malaysia InnoTech Johor - MAVCAP

MSC Malaysia InnoTech Johor - MAVCAP






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    MSC Malaysia InnoTech Johor - MAVCAP MSC Malaysia InnoTech Johor - MAVCAP Presentation Transcript

      • Family and friends
        • Funding to grow business sufficiently to outsiders
        • First step towards exposing business to investors
      • Angel
        • Give money without expecting much returns
        • May invest in idea/ plan, but for smaller amount of money
        • Some are professional angels – assist in developing business and access to further funding
      • Venture capital
        • The “real” thing
        • Equity investor (Cash for Shares)
        • Early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company
        • Compliment bank lending/facilities to finance innovative (high-risk) SMEs at various stages of life cycle (seed to expansion/late)
        • Provide alternative source of financing especially for early stage SMEs in ICT sector, biotech, ..
        • Enhance “bankability” of SMEs, entrepreneurship, corporate governance, marketing, product development and technology enhancement.
      • New companies with limited operating history
      • Too small to raise capital in the public markets
      • Too immature to secure a bank loan or complete a debt offering.
      • In exchange for the high risk that venture capitalists assume by investing in smaller and less mature companies, venture capitalists usually get significant control over company decisions, in addition to a significant portion of the company's ownership (and consequently value).
    • Market Expansion Product Expansion Listing or Sale Commercialization TIME Concept Alpha Beta Early Adopter Seed Early Expansion Late FUNDING (RM) <2M Pre-Seed <50K Co Formation 3-6 months 12-24 months 24-60 months
      • Preferably when there is more than idea to fund – funding of ideas only works in US
      • Pre-seed or research money is the first step – not necessarily VC funding
      • VCs are in no hurry to invest: Intro-to-investment may take 3 – 12 months
      • Try to develop a relationship with a VC with the intention of talking about the investment in the future
      • Product and/ or technology review
      • Management team
        • Can the team execute?
      • Business review
        • Estimated market size: growing/ shrinking rate?
        • Customer acquisition potential
        • Are costs an issue?
      • Risk factors
        • What are the competitive advantages? Sustainable?
        • What are the risks and mitigating factors?
        • What is the exit potential?
      • Point to note! A good business may not necessarily be a good VC investment
      • Market Potential / Access
      • Is it growing ?
      • Are drivers known ?
      • Acceptance of new products ?
      • Are there dominant suppliers ?
      • Funding / Capital Markets
      • What is the need for further funding ?
      • Are grants available ?
      • Availability of further funding ?
      • Access to capital markets for exit ?
      • Product / Service
      • Is value proposition defined ?
      • How will value proposition develop ?
      • Is product locally or globally benchmarked ?
      • What are competitive offering ?
      • No proper understanding of the business
        • Value proposition is “unclear” and hence cannot be communicated.
      • Wrong focus
        • Focus on valuation & funding
        • Focus on technology
        • No customer engagement
        • No sales (revenue) focus
      • Unable to manage the business
        • Financial and other controls
        • “ Hire fast” but “fire slow”
        • Team not rowing in the same direction.
      • Rewards are possible
      • Requires blood, sweat and tears
      • Case studies:
        • IPO
        • M&A
      • Risks are also REAL – especially for the investor
      • Real possibility: One small mistake and all is lost
      • Case studies
      • A technology venture capital company
      • Wholly-owned by Minister of Finance Inc.
      • Launched in April 2001
      • RM1 billion currently under management
      • Invests in ICT related domain and high-growth sectors
      • More than 90 portfolio companies in the past 7 years
      • Successful exits:
        • IPO - UnrealMind, MEMs, GPRO Technologies, ISS consulting
        • Trade sale - Ada Cellworks, Leinet Technology, iNavigate, INix Technologies
      • Empower entrepreneurs to create new wealth
        • Invests in ICT and high-growth sectors
        • Seed  pre-IPO
      • Develop the local VC industry
        • Outsource Partners Program 1 (RM100 mil) 4 VC funds
        • Outsource Partners Program 2 (RM200mil) up to 7 VC funds
      • Information Technology (CMC inclusive)
      • Internet
      • Electronics/Semiconductor
      • Communications & Networking
      • Other high-growth technology businesses
      • Invest in technology-based private startup companies
      • 3-5 year investment horizon
      • Board seat, participate/drive key decisions
      • Seed and early-stage
        • Initial investments of RM$1-3Mil
        • Typical for Mezzanine ~ RM5 - 10Mil
      • Initial investments and follow-on rounds to fund company through to exit
      • Geographical Focus
        • Mainly in Malaysian incorporated companies
        • Foreign companies with Malaysian angle (technology, regional expansion, etc) for strategic reasons
      • Proactive value-adding
      • Corporate governance
      • Management team
      • Network and portfolio linkage
      • Operating experience (insights)
      • Commercialization strategies
      • Fundraising strategy
      • THANK YOU
      • Visit us at www.mavcap.com
      • Tel : +603-20503000
      • Fax : +603-26983800