Ben Holmes at TechChill Baltics, February 12th, 2013


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Ben Holmes at TechChill Baltics, February 12th, 2013

  1. 1. What’s happening in the tech and venture ecosystem … &Opportunities for Nordic & Baltic Startups Ben Holmes, Index Ventures Riga – February 12th 2013 NVN Annual Members meeting May 23 2012
  2. 2. About Index Ventures• Founded 1996 in Geneva• Offices in Geneva, London and San Francisco• Current funds – Index Ventures VI - €350m (2012) also does seed investments – Index Growth II - €500m (2011) – Index Life Science I - €150m (2012)• Over 100 investments historically including … NVN Annual Members meeting May 23 2012
  3. 3. We the Nordics & Baltics NVN Annual Members meeting May 23 2012
  4. 4. A special time to be in the tech ecosystem Proves we are in the right industry … • Exceptional time for entrepreneurs to build disruptive companies • Unparalleled opportunity for investors to make big multiples and great IRRs for LPs NVN Annual Members meeting May 23 2012
  5. 5. Key Dynamics in Venture Ecosystem Suppliers (LPs) • Constraining commitments to venture in Europe • Elongated exit timeframes in existing portfolios is limiting ability to reinvestSubsitutes New Entrants Industry Rivalry• Crowdfunding, • Wave of new seed (VCs) marketplaces, investors • “Full service” pitch clone factories, • Big new “late- • Aggressive PR incubators stage” players activity Buyers (Companies and Entrepreneurs) • More capital efficient models shift power to buyers • Increasingly brand conscious NVN Annual Members meeting May 23 2012
  6. 6. Sector Trends• Each an incredibly disruptive investment theme• All really kicked off at the same time in the same place ( Cloud Mobile Social • Big trends all happening in the same place at the same time • Each theme laden with investment opportunities • Disrupting tech landscape and investment landscape NVN Annual Members meeting May 23 2012
  7. 7. “Product” is king • Product used to be • Product used to be the functional payload a customer received. • Product relied on many other divisions and facets of an organisation – brand & marketing, sales, manufacturing, operations and distribution, customer service • The “product” is increasingly consuming the organisation VC’s Experience of Company- Success or failure often reliant building process often on no longer applicable 1 or 2 key employees NVN Annual Members meeting May 23 2012
  8. 8. The Seed Phenomenon • $ required to build a product / service far lower • Mobile platforms and appstores • Facebook, Google • Cloud and open-source • New prototyping and user-testing techniques • $1m to $100m+ valuation jump can take a few months Everyone has …but vital to be noticed >> lots of Returns may be active in seed in seed money & more driven down… order to intercept at on the way venture stage NVN Annual Members meeting May 23 2012
  9. 9. Reinventing VC approach VC Provides • Capital • Full service offering • Sound Advice + • Inhouse teams for recruiting, marketing, finance, prod • Introductions uct advice… Deal-sourcing approach • Blogs, PR and media to drive • via network + inbound Winning deals on • Entrepreneur sets price • Relationship; and • Win on brand and perceived • terms breadth of offering NVN Annual Members meeting May 23 2012
  10. 10. Clones • Enormous respect for level of commitment, energy, capital and human capital being deployed • More than half of VC losses are down to business model or product design failing – the cloners take no risk on these elements [Website + Business Either need Model + Salesforce] … complex product substantial capital becomes easy to or technology at core to roll out fast… clone quickly NVN Annual Members meeting May 23 2012
  11. 11. Where to build your startup? Silicon Valley Riga • Nice and warm • “Refreshing” climate • Biggest enterprise and • Small home market consumer market • Fragmented European market • Homogenous home market • Emerging tech clusters • Epicenter of software and (London, Stockholm, Berlin, Hels internet industries inki, Tel Aviv) • Can “hire team at Starbucks” • Lots of tech talent, maybe fewer (Really ??) salespeople and marketeers • Abundance of cash from eager • Increasing levels of interest from VCs and angels investors -- but not yet a tidal wave NVN Annual Members meeting May 23 2012
  12. 12. How can we build global leaders from the Nordics &Baltics Global Product Leverage open Capital By Centric platforms Efficient Default Exposed to Global sales Global partner local operation network regulations Where we can win… Challenging Sectors Social media Ecommerce SaaS Enterprise Software Games NVN Annual Members meeting May 23 2012
  13. 13. Thank You ! Ben Holmes NVN Annual Members meeting May 23 2012