ApproachingVCs: Basics, DO’s and DON’Ts
Berlin, 23.7.2013
Early-stageVenture Capital firm based in Berlin
investing internationally (focus Europe)
SaaS
Network
effects
Commerce
Curr...
Currently Point Nine Capital Fund II (40m Euro)
• PNC I - 6m Euro (launched 2009/10)
• PNC II - 40m Euro (launched 2012)
•...
Early stage investment landscape (largely simplified)
Angels / Accellerators /
Incubators
VCs
VC investment landscape looking from Berlin
(super simplified, based on perception and not exhaustive :-)
Stage
Investment
...
Other investor types / financing sources:
•BANKS (need collateral / cash flow / history)
•CORPORATES (can make sense, suppor...
Good reasons to raiseVC money
Do you really need VC?
VC ≠ Sales
Dilution is your
enemy!
Investors = bosses?
?
Lifestyle business
Forced to grow
When not to raiseVC money
What a goodVC can give you
VCs tend to specialise, but in general they look for:
•Amazing teams
• Great products
• Huge / fast growing / not very com...
VCs look at a lot of companies
Point Nine Capital in 2012:
- 2500 business plans
- 10 investments
=> we invested in 0.4% o...
TheVC process
Startup
First Screening
Intro
Outgoing
Due Diligence
Deal Memo Term Sheet Legal DD
Deal
Support
Exit
Pass
Ne...
How do you get on the radar screen?
... and network...
Approach - have a Deck!
+/- 10 slides - be visual + numbers
english only
no paper
no 50 page business plan
no NDAs
=> the ...
NDAs are bad for you
1000s of projects / year => admin
Many similar projects, we do compare
“backend of the idea” is the v...
„We invest into lines, not dots“Mark Suster
Stay in touch & be persistant
The termsheet
• Price - X% shares forY$
• Liquidation Preference (who gets the money when)
• Anti-Dilution
• Controlling r...
Negotiations
Competitive pressure + high quality (traction,
product, team) win
Contract (lawyers make money)
Can be smooth
Can be long
Not done until done
Quick case study 1
• Berlin based
• One founder - coded - simple, but first users
• Co-founder in the pipeline
•Approached ...
Quick case study 1I
• New Zealand based
•We approached proactively, while reviewing the global POS space
• Best product, s...
Get prepared!
Read (blogs > books):
Good luck!
@pawell
www.pawel.ch
pawel@pointninecap.com
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Approaching VC's

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Basic's, DO's and DON'Ts from the perspective of an early stage VC.

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Approaching VC's

  1. 1. ApproachingVCs: Basics, DO’s and DON’Ts Berlin, 23.7.2013
  2. 2. Early-stageVenture Capital firm based in Berlin investing internationally (focus Europe) SaaS Network effects Commerce Current key investment themes and examples:
  3. 3. Currently Point Nine Capital Fund II (40m Euro) • PNC I - 6m Euro (launched 2009/10) • PNC II - 40m Euro (launched 2012) • Investment size: 100k - 1m Euro + follow-on • Stage: seed / series-A
  4. 4. Early stage investment landscape (largely simplified) Angels / Accellerators / Incubators VCs
  5. 5. VC investment landscape looking from Berlin (super simplified, based on perception and not exhaustive :-) Stage Investment size Seed Series A Series B €100k Business Angels €500k €1-5M €5M+ F&F Accel- erators Grants
  6. 6. Other investor types / financing sources: •BANKS (need collateral / cash flow / history) •CORPORATES (can make sense, support, but issues with exit) •STATE SUPPORT (varies over time / by region)
  7. 7. Good reasons to raiseVC money
  8. 8. Do you really need VC? VC ≠ Sales Dilution is your enemy! Investors = bosses? ? Lifestyle business Forced to grow
  9. 9. When not to raiseVC money
  10. 10. What a goodVC can give you
  11. 11. VCs tend to specialise, but in general they look for: •Amazing teams • Great products • Huge / fast growing / not very competitive market opportunities • Great unit economics •Traction • Exit
  12. 12. VCs look at a lot of companies Point Nine Capital in 2012: - 2500 business plans - 10 investments => we invested in 0.4% of business we have seen in 2012. other investors will have a similar rate
  13. 13. TheVC process Startup First Screening Intro Outgoing Due Diligence Deal Memo Term Sheet Legal DD Deal Support Exit Pass Negotiation
  14. 14. How do you get on the radar screen? ... and network...
  15. 15. Approach - have a Deck! +/- 10 slides - be visual + numbers english only no paper no 50 page business plan no NDAs => the initial info needs to grab attention and explain basics, not everything!
  16. 16. NDAs are bad for you 1000s of projects / year => admin Many similar projects, we do compare “backend of the idea” is the value + execution Too lazy to copy your idea anyway Slow down No feedback Layman
  17. 17. „We invest into lines, not dots“Mark Suster Stay in touch & be persistant
  18. 18. The termsheet • Price - X% shares forY$ • Liquidation Preference (who gets the money when) • Anti-Dilution • Controlling rights • Future rounds (pro-rata, right of first refusal) • Drag Along • Vesting (when founders can lose some of their shares) • Board • Information rights (what to tell your investor) • Costs • Exclusivity • Binding (Legal)
  19. 19. Negotiations Competitive pressure + high quality (traction, product, team) win
  20. 20. Contract (lawyers make money) Can be smooth Can be long Not done until done
  21. 21. Quick case study 1 • Berlin based • One founder - coded - simple, but first users • Co-founder in the pipeline •Approached referring to SaaS • Spent quite some time educating us on the space • Ended up investing with a London based fund
  22. 22. Quick case study 1I • New Zealand based •We approached proactively, while reviewing the global POS space • Best product, some traction • Small company - 5 guys, tens of paying users •We invested in NZ without having been to NZ
  23. 23. Get prepared! Read (blogs > books):
  24. 24. Good luck! @pawell www.pawel.ch pawel@pointninecap.com
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