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Entrepreneurship Bootcamp - The Art of the Start - How to start a venture backed company
 

Entrepreneurship Bootcamp - The Art of the Start - How to start a venture backed company

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How to start a venture backed company; how to get an angel investor, company valuation, incubator, Mannheim, business plan

How to start a venture backed company; how to get an angel investor, company valuation, incubator, Mannheim, business plan

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    Entrepreneurship Bootcamp - The Art of the Start - How to start a venture backed company Entrepreneurship Bootcamp - The Art of the Start - How to start a venture backed company Presentation Transcript

    • The Art of the StartStarting a VC backed companyMichael AltendorfEntrepreneur Bootcamp12.11.2011
    • About Us Founded in 2008 Awards 2010 & 2011 Located in Mannheim, Düsseldorf, London Team of 25+ tech- and media experts from e.g. SAP, Google, T-Systems and IBM 1 of 10 Facebook preferred developer consultants in Connected to e.g. Europe Only certified Facebook Advertising provider (API) Performance: Manage terabytes of data Deliver billions of impressions Cloud based solution Simple & efficient scalability Highest security and redundancy
    • Adtelligence Produkt Portfolio Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • HOW TO START A VENTURE ?
    • THE IDEA COMES FIRST
    • How to start?Iterate, iterate, iterate…Questions to ask yourself before the start Do I have a good idea? Am I good enough to be an Entrepreneur? Where do I get the money for my Company from? Who gives me the Money? How do I get to know such people? Why do the rich people do this? What do I have to do? What kind of questions do the Investors ask? How much Money do they give to me (& how much do they want from me?) When do I get the Contract and the Money? What happens then? Source: Computer History Museum Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • From Idea to concept No… …Better… …Maybe… …Yes Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • From first idea to first version of a product – sometimes ittakes only some days – Sales Funnel Analysis Tool Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • THE TEAM
    • The TeamHow to built a great team for the start?• Motivation is key!• Experience is something but not much• You need some experience in several disciplines but no senior team• Combination of experience and fresh ideas is best• Minimum 2 people for the start, 3-4 are better Source: A-Team Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • VCs look for the serial entrepreneur 80% of the success is determined by the Team  Your Qualification: 1,0 in Informatics + 1,0 MBA + 2 own (sold) companies + 5 years work experience would be “good”  BA in XYZ + an internship at McKinsey is not enough to get VC  Quote from former CFO SAP: “The guys who sold nothing switched to marketing”Show that you are able to build the product and the company Work on your Idea:  Identify markets  Calculate Costs and Revenues  Develop a Prototype  Talk to experts  … Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • THE (BUSINESS) PLAN
    • Some FAQ for the (Business) Plan Yes, you will write it for yourself, but the VC wants to see the potential (100 Mio in 5 Years is the key, not in one VC round, you need at least 3-5) – start small (50K rev e.g. for the first year and show how to grow to 100M) think big No, salary of more than 50.000€ per Year is not ok for the start when your just graduated No, with 3 People you wont reach 5% Market share - please calculate bottom-up No, you dont have to mention Gartner and IDC, but 1 Big Player would be good No, you cant do it without a business plan (…but with a product which has 10.000 users +) No, it should not be longer than 10-25 Pages (10/ 20/30 rule) – no McKinsey 80 page plan with 40 page competitive feature analysis – you can do the longer analysis for you but not for the VC – VC‟s do not have time to read more than 10 pages As short as possible, not longer than necessary The core problem is  to write a short plan, not long one! Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • THE VENTURE CAPITAL
    • Where do I get the Money for my CompanyTypical Sources for first angel money: Own Money Family, Friends & Fools Business Angel Bank Seed Venture Capital Fonds (Seedcamp, Y Combinator)Prefer Smart Money in the Beginning! Venture Capitalists most times didnt had an own company with problems you will get Prefer Business Angel with Experience and a lot of spare time Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Who gives me the Money?Prefer an experienced Business Angel with "proven track record", a goodnetwork, and Experience in the right Segment Source: John Doerr/Ted.com Source: Ron Conway/Techcrunch Source: Forbes Magazine Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • How do you meet those people? Recommendations by other CEO‟s or VC‟s Best Place to pitch VC‟s: University Coffee in Palo Alto/Sillicon ValleyOr on local Events Our own matching event:Rhein Neckar Technology Ventures(www.technologyventures.de) Heidelberger Innovationsforum or other local events Contacts (Lawyer, Tax Accountant) BAND/BA Networks  Karlsruhe  Frankfurt  Heilbronn  Stuttgart Mentor or Public Consultant Do not pay, if it is not necessary the best advice you will getfor free! Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • How much should I raise? (…or how much do you get!)Phase Who invests? Volume Success FactorsIdea Nobody 0 Experience and BackgroundOrientation Fools 0 Meet the right PeoplePlanning Fools 25.000 € Background - Who can write a clean Plan and make a good Calculation - only Serial Entrepreneurs in Silicon Valley are getting Money for IdeasFounding / Family & Friends, BA with 0 - 1 Mio. Own Funds, persuasive Power, can you get VC withBusiness Plan Experience in this Segment your Plan and your Idea - Can you realize the PlanSeed / Prototyping Business Angel - prefer smart Up to 1 Mio, but 50k -500k How good is the Team and the Prototype Money averageStartup Business Angel (HTGF or seed Up to 1 Mio. Development, Financial Plan funds)Early Stage BA, VC Up to 10 Mio. International, 1-5 The right Contacts, Potential and Team Mio. national FondsExpansion VC 5-25 Mio. Growth in Sales, Business Model (reoccurring revenues)Late Stage IPO, VC, Private equity (in Unlimited Growth in Sales, EBIT, Market Share exchange for angels and VCs) Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Ideal Way of increasing value – Facebook (at least till 2011) Source: Techcrunch.com Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • THE BUSINESS MODEL
    • Define a Business Model, test it and iterate, iterate, iterate… 1 Infrastructure 2 Offering 3 3 Customer Core Partner Customer Customer Competencies Network Relationship Segments Value Proposition Value Distribution Configuration Model Costs 4 Finance Revenue Model Source: A. Osterwalder Business Model Design Template Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • THE PRODUCT
    • The unique selling proposition of your product? Some questions to answer: • Why should somebody buy your product? • What needs to you address? • What are the key USP‘s for your target customer? • Why are you better? • Is there a market? • If there is no competition there is no market! That is not an USP – nobody will buy it! Source: Forbes Magazine Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • THE MARKET
    • 5 Forces (Porter) Potential Entrants Threat of new Entrants Bargaining Industry Competitors Suppliers Power of Rivaly among Bargaining Buyers Power of Buyers Suppliers existingfirms Threat of Substitute Products or Service Substitutes Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • The Competition Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • The Gartner Hype Cycle – Define the right time to market Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • New Markets are different Source: Steve Blank Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • GO TO MARKET STRATEGY
    • How to find the first Customer Search Customer Discovery Customer Validation Pivot Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Crossing the Chasm in an existing market Source: Steve Blank Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Crossing the Chasm in a New market takes much longer Source: Steve Blank Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Customer Development - How the find the Target Customer• Week 1: Define a beachhead where to enter the market• Define the pricing• Week 2: define a new target customer• Define a better package and better pricing• Week 3: …• After one year: Market clearer but iterations every 4-8 weeks to improve pitch and feature set Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Plattform vs. One Trick Pony Easier to enter the market, niche leader but can become obsolete with game Very hard to sell, indirect business models, high changing technology (Facebook vs. investment but maximum ROI Studivz Source: Facebook Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • DISTRIBUTION THE SALES MODEL
    • Define a Sales Process and potential customer market andpositioning in the value chain Source: Slideshare Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Whats up with the Marketing - there is no Budget WEB 2.0 TOOLBOX  Todays Online Marketing Technologies for the Web 2.0 are Viral Marketing more Creative  The new Tools are used to make all kinds of Advertising: Early Adopter Marketing PR News, Blogs or Twitter Buzz & Guerilla Marketing  An interesting and interactive way of Advertising is the viral marketing (Word of Mouth Marketing) Blogging & Twittering  The Problem of these creative Advertising: Brand Page Facebook Fan Pages  You cant predict the effect Online Events / Webinar Youtube Video PR  Viral Campaigns are unique - you cant replicate them Company Radio & TV Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • FINANCE AND REVENUES
    • Raising VC & Sales – Money is OxygenRaise 50% more money than you need in thebeginningExample:HTGF gives 500K for 15% (+ one time antidillusion clause) as they know that you willneed additional money from other investors Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Working Capital• There is some time between order entry and cash flow• This can become your core problem!• If you have contracts, the bank can be used for this but not unlimited Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • An important "period" Break Even (HGB vs IAS vs US GAAP) …cash flow break even is important Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • HUMAN RESSOURCES
    • Building a great Team Look for talent not for CV Motivation is more important than previous internships etc. Grades make no good great sales guy Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • The SMT – Building a Senior Management Team Like in a rock band: All instruments have to be played and not everybody can play everything Very important to find 5 key people in the company In the beginning you need 2: one to sell, one to build Later you need: CEO, VP Sales, COO, CFO, CTO/visionary Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • GROWTH CAPTIAL
    • Finance Planning and Venture Capital Create a Financial Plan in 2 ways  Bottom Up  Top Down From where to you get the Numbers?  Gartner & Co Calculate 3 Scenarios (+/+/=) (if you have a negative scenarios – how to innovate the business mode to still make money? How do I have to calculate to get VC? Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Who are the Key Players to get VC?E.g. in the valley Check it out: http://linksviewer.com/free/view/Map.htm Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Try to reach Network Effects Year 1 Year 2 Year 3 Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Scaling the Company & Establish an Expansion Strategy Many ways to grow: • Product differentiation • Go into verticals • Expand into other countries • Start partnerships Problem: Which way is right? Try everything but stop fast if ist not working Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • EXIT SCENARIOS
    • Exit ScenariosSelling to Google is best, but thereare many other which are ready tobuy• IPO – not necessary, you can use private equity first• As an expert first before you sell (M&A advisors in London, NY , silicon valley)• Stay with your company?• Merger with competitor?• … Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • FAQS
    • What kind of Questions do the Investors ask?Product - What is the Product Roadmap? What are you developing next, how long will it take, and who are your hires todevelop it? How did you make the decisions regarding the Direction the Product is right now? We want to understand yourDecision making Process and your vision of the company. This last point is extremly important.Market - How big is the market and how will it grow? What are the trends in the market that make now the right time for yourproduct? If youre in a big enough market, you can afford to make some mistakes (which as startups you will always do!). Whoare your first customers? Are they referenceable? What does your pipeline look like?Competition - Who are the competitors? What is your competitive advantage and is it sustainable? Hint: IP patents are notenough.Team - What are your backgrounds, where did you meet, and why are you the right team to execute on this plan? Who doeswhat, and who else do you need to hire to build out the right team? Be lean with your costs. No VC likes to see a company thatis spending extraneous money.Scalability - What are the barriers to growth? There will always be some; be aware of what they are. This could be from thebusiness model side or the technical product side. Within this there is also the issue of customer acquisition strategy and cost.Finally, although we do not ask the founder this question, we ask ourselves: In what ways do WE as the VC investorprovide value to this particular entrepreneur/team/startup?Source: Janet Zhou //Silicon Valley VC Mai 2010 Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • How much should I raise?Phase Who invests? Volume Success FactorsIdea Nobody 0 Experience and BackgroundOrientation Fools 0 Meet the right PeoplePlanning Fools 25.000 € Background - Who can write a clean Plan and make a good Calculation - only Serial Entrepreneurs in Silicon Valley are getting Money for IdeasFounding / Business Plan Family & Friends, BA with 0 - 1 Mio. Own Funds, persuasive Power, can Experience in this Segment you get VC with your Plan and your Idea - Can you realize the PlanSeed / Prototyping Business Angel - prefer smart Up to 1 Mio, but 50k -500k average How good is the Team and the Money PrototypeStartup Business Angel (HTGF) Up to 1 Mio. Development, Financial PlanEarly Stage BA, VC Up to 10 Mio. International, 1-5 The right Contacts, Potential and Mio. national Fonds TeamExpansion VC 5-25 Mio. Growth in Sales, Business Model (reoccurring revenues)Late Stage IPO, VC, etc. Unlimited Growth in Sales, EBIT, Market Share Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Week 1: When do I get the Contract and the Money? When the Investor is interested : First Round 2 -3 Month Due Diligence Phase "Finding the Rock": Investors asking question Founders are answering Months of Contract Negotiations Meeting with Notary (Founding GmbH)  Open an Account Source: Wooga  Dont wait for the certificate of registration, start immediately  Then the Money comes Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Week 2: What happens then? Get an Office Go to IKEA or buy on eBay Get a Phone Write Job Ads Hire People - Is the Team complete? No, you cant order a Porsche, a Macbook or an iPhone Long Term Investments  You can„t go to the Customer with a ALDI Notebook? Source: Blog Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Key Learnings Being self-employed means working the every day and own your own - 60 - 100 hrs a week is normal Never Stop Learning, iterate! Writing and Optimizing the Business Plan Get a "Level of Trust" - Visit Events and enlarge your network Investors are paying for the growth of the Company, not for luxury like concord flights – don‟t worry you will be invited to cool locations and events all the time all over the world! Get in the Market when everybody makes fun of you Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany
    • Thank YouInformation: www.adtelligence.deE-Mail: ma@adtelligence.deBecome a fan: www.facebook.com/adtelligenceTwitter: www.twitter.com/Michael1980Connect: www.linkedin.com/in/michaelaltendorf www.xing.com/profile/Michael_Altendorf
    • AnnexInformation: www.adtelligence.de
    • Books to Read Starting a Venture - The Art of the Start – Guy Kawasaki First Steps - The Lean Startup – Eric Ries Go to market & productization - Steve Blank – 4 steps to epiphany Go to market - Crossing the Chasm, Geoffrey Moore Fast Growth – Inside the Tornado, Geoffrey Moore German Business Plan handbook: http://www.cyberone.de/cms/fileadmin/download_file s/Businessplanhandbuch.pdf Web: www.adtelligence.de | Email: info@adtelligence.de | Tel: +49 (0) 621 87 204 066 | Julius-Hatry-Str. 1 | 68163 Mannheim, Germany