Artturi Tarjanne presentation on StartSmart event Wantrepreneur 2 Entrepreneur 1.12.2011. Tallinn, Estonia

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Artturi Tarjanne ( www.nexitventures.com ) spoke about VC-s on Start Smart! event Wantrepreneur 2 Entrepreneur 1. december 2011 in Tallinn, Estonia. www.start-smart.me

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Artturi Tarjanne presentation on StartSmart event Wantrepreneur 2 Entrepreneur 1.12.2011. Tallinn, Estonia

  1. 1. Nexit VenturesArtturi Tarjanne 0 EstVCA What Venture Capitalists Consider Nexit experiences picking 25 deals out of 5000 Cases screened in Nordic Countries and Silicon Valley Agenda  Background: AT, Nexit, Nexit Strategy and Team  Selecting the management Team for a VC funded company Artturi Tarjanne 2.12.2011Helsinki Stockholm Silicon Valley www.nexitventures.com
  2. 2. Artturi Tarjanne 1From a SW Entrepreneur to a Venture Capitalist1. SW Entrepreneur - Independent IT/SW consultant, Movision Ltd, 1983-86 - VP Sales, Venture Investment & Automation, 1986-91 - Co-Founder, CEO, Solid Information Technology, 1992-972. Business Angel Founder, Managing Director, ATC Oy, 1997-993. Venture Capitalist Co-Founder, General Partner, Nexit Ventures 1999-Associations and public activities FVCA, Ohjelmistoyrittäjät, Hetky, Tietotekniikan liitto Ohjelmistoviennin neuvottelukunta, Tekes SPIN, Tekes VERSO, SW OSKE, JPT OSKE, DIGI OSKE artturi.tarjanne@nexitventures.comHelsinki Stockholm Silicon Valley www.nexitventures.com
  3. 3. Nexit VenturesExecutive Summary 2Transatlantic VC fund focusing in mobile & wireless Established in late 90’s Focus on mobile & wireless and surrounding ICT industry – Software, enabling technology, service and content opportunities – The convergence between communication, computing and content Activities are targeted to the Mobile hot spots – Offices in Helsinki, Stockholm and Silicon Valley – Investing in the Nordic and the US west coast – 7 Investment professionals – 25 investments Two funds totaling over MEUR 150 – Prominent investors like Tapiola Mutual Pension Fund, Finnish Industry Investment, and Nokia Corporation – Several high net worth individuals with relevant experience and network in Infocom and financial industriesHelsinki Stockholm Silicon Valley www.nexitventures.com
  4. 4. Nexit StrategyBridging Mobile Opportunities 3 The Nexit transatlantic strategy is generating a strong track record Acquired by nVidia Partial exit: NTT DoCoMo [NSDQ:NVDA] US sales - FIN R&D Flip from Finland to US ~ 75% revenue from US Acquired by ON2 and further by Google [NSDQ:GOOG] Acquired by Sybase [NYSE:SY] Acquired by Trilliant High Growth, profitable and further by Juniper Acquired by HP ~ 90% revenue from US Networks [NSDQ:JNPR] [NYSE:HPQ] All exits to listed US entities except one to NTT DocomoHelsinki Stockholm Silicon Valley www.nexitventures.com
  5. 5. Strategy ExecutionNexit Management Resources 4 Michel Wendell General Partner (US) - 25 years of international high-tech business, Silicon Valley resident since 1995 Artturi Tarjanne General Partner (FIN) - 25 years of entrepreneurial experience in Infocom Pekka Salonoja General Partner (FIN) - 21 years in communications industry, VP and GM of Server Products at Nokia Michael Mandahl Venture Partner (SWE) - over 20 years of high-tech, 12 in entrepreneurial roles Patrice Peyret Venture Partner (US) - Highly successful serial high-tech entrepreneur with 25 years operating experience Sami Karppinen Investment Director (FIN) - 15 years of Infocom industry and investment research Risto Yli-Tainio CFO (FIN) - 17 years of experience in financial management in Infocom and VC industriesHelsinki Stockholm Silicon Valley www.nexitventures.com
  6. 6. The VC target –Returning 10x or more 5 VC is a ’hits’ based business – the real success comes through very few but really great homeruns About investor expectations  0,8 x (1/3x0 + 1/3x1 + 1/3x5) = 1,6 -> IRR ~10%, not good enough!  0,8 x (1/3x0 + 1/3x1 + 1/3x7) = 2,1 -> IRR ~16%, ok, but….  0,8 x (1/3x0 + 1/3x1 + 1/3x10) = 3 -> IRR ~24%, YES! “Entrepreneurs need to understand that VC’s are a sophisticated form of financial investors who in turn need to satisfy their own investors. At the end of the day VC’s have to provide their investors with great returns or they aren’t going to be able to raise another fund.”Helsinki Stockholm Silicon Valley www.nexitventures.com
  7. 7. What Venture Capitalists Consider 61. Management2. Market potential3. Exit potential4. Differentiation and protection5. Risk analysis and funding need6. Business model (reflecting the outcome of points 1. - 5.)Helsinki Stockholm Silicon Valley www.nexitventures.com
  8. 8. 1. The Management Team 7 Most important single issue for VCs Entrepreneur vs. Inventor – Global view on market – Deep knowledge and network within the target market – Identification of an business opportunity – Creation of an organization to pursue the opportunity – Ability to change course in the face of setbacks – Exit: willingness to sell the company Teams win, Superstars loose – Diversity of the team – Who has worked together before? – What is the motivation of the team?Helsinki Stockholm Silicon Valley www.nexitventures.com
  9. 9. Changing The CEO? 8 Different phases of development -> different type of management skills  Seeking the right business model - speed and agility  Rapid scaling and building the organization - sales and growth  Oiling the well functioning engine  Faces for the Exit - IPO or M&A If thing are not working out?  Sometimes changing the CEO is the only real option left for VC’sHelsinki Stockholm Silicon Valley www.nexitventures.com
  10. 10. Nexit VenturesArtturi Tarjanne 9 Thank you! Bridging Mobile OpportunitiesHelsinki Stockholm Silicon Valley www.nexitventures.com

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