Developing A Successful Strategy To Attract Venture Capital Financing


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Gerd Goette, Vice President & Investment Partner, Siemens Venture Capital
• What are Venture Capitalists looking for in a business plan?
• How to commercialize new products: go-to-market strategy and partnering
• Living up to your promises: execution and budget control

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Developing A Successful Strategy To Attract Venture Capital Financing

  1. 1. Developing a Successful Strategy to Attract Venture Capital Financing Charged 2020 – San Diego - July 14 th , 2010 Gerd Goette, Siemens Venture Capital
  2. 2. Developing a Successful Strategy to Attract Venture Capital Financing <ul><li>Siemens and Siemens Venture Capital </li></ul><ul><li>Investment Activity in Energy Storage </li></ul><ul><li>Venture Capital Financing </li></ul>
  3. 3. Siemens is the Green Infrastructure Giant – Well Positioned for a Sustainable Future 3 Siemens environmental portfolio <ul><li>The world’s largest environmental portfolio consists of products and solutions that make a direct, quantifiable contribution to environment and climate protection* (~ €23 billion). </li></ul><ul><li>Siemens' green portfolio has grown by 11% in comparison with fiscal 2008 </li></ul><ul><li>In fiscal 2009, energy-efficient products and solutions of our environmental portfolio abated about 210 million tons of CO2 for our customers. By 2011, we expect it to be 300 million tons… </li></ul><ul><ul><li>… that equals the total CO2 emitted by New York City, London, Hong Kong, Singapore, Rome, Tokyo and Berlin </li></ul></ul>Business volume of environmental portfolio CO2 abatement at customers (in billion €) (in million tons) 2011e 2009 2008 2011e 2009 2008 * reviewed by PwC 25.0 23.0 20.7 300 210 161 = New York London Hong Kong Singapore Rome Tokyo Berlin
  4. 4. Siemens in the USA: Snapshot for FY2009 <ul><li>A Global Company with strong U.S. presence </li></ul><ul><ul><li>Rank 30 th on Fortune Global 500 </li></ul></ul><ul><ul><li>Rank #1 on Fortune’s Electronics, Electrical Equipment list </li></ul></ul><ul><ul><li>Export $1.6 billion from U.S. operations </li></ul></ul><ul><li>Answers for America’s Industrial Needs </li></ul><ul><ul><li>We’re a leading provider of product lifecycle software for digital manufacturing </li></ul></ul><ul><ul><li>We process all mail in the USA for the U.S. Postal Service </li></ul></ul><ul><ul><li>We’re a leading provider of air pollution control systems </li></ul></ul><ul><ul><li>We provide building and lighting solutions for airports, hospitals, stadiums and renowned American landmarks </li></ul></ul><ul><ul><li>We’re the #1 provider of light rail mass transit vehicles </li></ul></ul><ul><ul><li>We’re the #1 supplier of water treatment systems for industry and municipalities </li></ul></ul><ul><li>Answers for America’s Energy Needs </li></ul><ul><ul><li>We provide turbines powering one-third of America’s total daily energy needs </li></ul></ul><ul><ul><li>We’re a leading provider of power generation and delivery solutions designed to help reduce C0 2 emissions </li></ul></ul><ul><li>Answers for America’s Healthcare Needs </li></ul><ul><ul><li>We’re the first integrated healthcare company that brings together imaging and lab diagnostics, therapy, and IT. </li></ul></ul><ul><ul><li>We’re the #1 healthcare IT service provider </li></ul></ul>U.S. Fast Facts Fiscal Year 2009: Revenues Orders Employees Building Locations Global HQs Patents $21.3 billion $19.9 billion 64,000 760 9 5,329 (1)
  5. 5. Siemens Venture Capital Quick Facts <ul><li>Investment Focus: </li></ul><ul><li>Energy and Environmental Care </li></ul><ul><ul><li>Emissions control </li></ul></ul><ul><ul><li>Renewable energies: wind, solar </li></ul></ul><ul><ul><li>Smart grid </li></ul></ul><ul><ul><li>Grid level storage </li></ul></ul><ul><ul><li>Water technologies </li></ul></ul><ul><li>Industrial and Public Infrastructure </li></ul><ul><ul><li>Motor and drive technologies </li></ul></ul><ul><ul><li>Sensors </li></ul></ul><ul><ul><li>Energy efficiency </li></ul></ul><ul><ul><li>Lighting technologies </li></ul></ul><ul><ul><li>Clean transportation </li></ul></ul><ul><li>Healthcare </li></ul><ul><ul><li>Imaging technologies </li></ul></ul><ul><ul><li>Molecular diagnostics </li></ul></ul><ul><ul><li>Healthcare IT </li></ul></ul>SVC Quick Facts: In operation since 1999 Invested over Euro 800m Portfolio of 140 start-up companies 40 VC funds Geographic focus: North America, Europe, Israel and Asia Team of 30 Offices in Munich, Boston, Silicon Valley, Beijing and Mumbai
  6. 6. Overview of our Active Cleantech Portfolio US Europe Asia Water Technologies Clean Transportation Energy Efficiency Smart Grid Power Generation
  7. 7. Developing a Successful Strategy to Attract Venture Capital Financing <ul><li>Siemens and Siemens Venture Capital </li></ul><ul><li>Investment Activity in Energy Storage </li></ul><ul><li>Venture Capital Financing </li></ul>
  8. 8. Public Markets: Stock Performance vs. NASDAQ Source: Yahoo! Finance
  9. 9. Public Markets: IPO Activity Source: ThinkEquity
  10. 10. Private Markets: Total VC Investment in Cleantech Source: Ernst & Young
  11. 11. Private Markets: VC Investment in Cleantech Segments Source: Ernst & Young
  12. 12. Developing a Successful Strategy to Attract Venture Capital Financing <ul><li>Siemens and Siemens Venture Capital </li></ul><ul><li>Investment Activity in Energy Storage </li></ul><ul><li>Venture Capital Financing </li></ul>
  13. 13. A VC Perspective: It’s a Big Market – But Fragmented and Very Competitive <ul><li>Technology choices: </li></ul><ul><ul><li>Electrical </li></ul></ul><ul><ul><li>Mechanical </li></ul></ul><ul><ul><li>Thermal </li></ul></ul><ul><ul><li>Chemical </li></ul></ul><ul><li>Trade-offs: </li></ul><ul><ul><li>Power density </li></ul></ul><ul><ul><li>Energy density </li></ul></ul><ul><ul><li>Weight </li></ul></ul><ul><ul><li>Charge and discharge properties </li></ul></ul><ul><ul><li>Safety </li></ul></ul><ul><ul><li>Environmental </li></ul></ul><ul><li>Pricing power of large incumbents </li></ul><ul><li>Companies competing with countries </li></ul>
  14. 14. VC Considerations <ul><li>Evolution vs. disruption </li></ul><ul><li>Technology vs. capacity </li></ul><ul><li>Price elasticity </li></ul><ul><li>Competition and barriers to entry </li></ul><ul><li>Incentives (non-dilutive funding) </li></ul><ul><li>Capital requirement </li></ul><ul><li>Holding period </li></ul><ul><li>Where does the exit come from? </li></ul><ul><li>Valuation metrics? </li></ul><ul><li>How many success stories? </li></ul>Risk Reward Ratio
  15. 15. Go-To Market Strategy <ul><li>Why will customers buy your product? Value proposition, ROI … </li></ul><ul><li>How will customers buy your product? Direct sales vs. channel partners </li></ul><ul><li>How long is the sales cycle? </li></ul><ul><li>Smart marketing: </li></ul><ul><ul><li>Customer references </li></ul></ul><ul><ul><li>Industry analysts </li></ul></ul><ul><ul><li>Media coverage </li></ul></ul><ul><li>Which parts of the value chain do you need to cover? Do it yourself vs. outsourcing </li></ul>
  16. 16. Execution <ul><li>Pick the right syndicate and set expectations right: opex, revenue ramp, capital requirement, time to exit … </li></ul><ul><li>Smart money vs. just money </li></ul><ul><li>Big piece of a small pie vs. small piece of a big pie </li></ul><ul><li>Align interests to ensure all are in the same boat: management, employees, investors, board members </li></ul><ul><li>Don’t over-promise but over-deliver </li></ul><ul><li>Share the good news right away… … and the bad news even faster </li></ul><ul><li>The board is your partner… … but get the right people on your board </li></ul>
  17. 17. Siemens Venture Capital – Contacts Siemens Financial Services, Inc. Siemens Venture Capital Silicon Valley Office 1230 Shorebird Way, M/S 1-1 Mountain View, CA 94043, USA Tel.: +1 650 587 4558 Fax: +1 650 587 4581 Siemens Financial Services, Inc. Siemens Venture Capital Boston Area Office 801 Boylston Street, 5th Floor Boston, MA 02116, USA Tel.: +1 617 531 2903 Fax: +1 617 531 2908 Siemens Venture Capital GmbH Munich Office Otto-Hahn Ring 6 D-81739 Munich, Germany Tel.: +49 89 636 33585 Fax: +49 89 636 34884 Siemens Venture Capital in China Siemens Venture Capital (SVC) Beijing Rep. Office No. 7, Wangjing Zhonghuan Nanlu Chaoyang District P.O. Box 8543 Beijing 100102, P.R. China Tel.: +8610-6476 8890 Fax: +8610-6476 4984 <ul><ul><li>Siemens Venture Capital in India </li></ul></ul><ul><ul><li>Siemens Corporate Finance Pvt. Ltd. 5th floor, Electric Mansion </li></ul></ul><ul><ul><li>1086, Appasaheb Marathe Marg </li></ul></ul><ul><ul><li>Prabhadevi </li></ul></ul><ul><ul><li>Mumbai 400025 </li></ul></ul><ul><ul><li>Tel. +91 22 6757 2203 </li></ul></ul><ul><ul><li>Fax. +91 22 6757 2260 </li></ul></ul>