Investor readiness


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Investor readiness

  1. 1. Investor readiness<br />International BioBusinessEducation for Young Scientists IBBE<br />Helsinki, April 28, 2005<br />Markku Sjöstedt<br />Director, PreSeed Finance<br />Finnish national fund for research and development<br />
  2. 2. PreSeed serviceConfidence on investment readiness for start-ups<br />LIKSA<br /><ul><li>focus on acquiring market information
  3. 3. 40 000 € and 4 months
  4. 4. resulting in a high quality business plan
  5. 5. Sitra and TEKES financing in cooperation</li></ul>DIILI<br /><ul><li>sales competence as sweat equity
  6. 6. resource: experienced business professionals
  7. 7. objective: to speed up the investment process</li></ul>INTRO<br /><ul><li>marketplace for early stage investments
  8. 8. private persons (business angels) as investors
  9. 9. aiming at syndication</li></li></ul><li>Stepping stone to venture capital<br />DIILI<br />sales competence<br />as sweat equity<br />business angels<br />verification<br />deal flow<br />INTRO<br /><ul><li>internet access
  10. 10. business forum
  11. 11. investment negotiations
  12. 12. syndicates</li></ul>SITRA<br />PreSeed<br />LIKSAfunding business plans<br />deal flow<br />VC (early stage)<br />300<br />60<br />30<br /><ul><li>© Risto Kalske</li></li></ul><li>It’s not all about money<br />business concept<br />start-up company<br />capital<br />human resources<br />
  13. 13. It’s not all about money<br />LIKSA<br />business concept<br />start-up company<br />DIILI<br />INTRO<br />capital<br />human resources<br />
  14. 14. Classification of companies<br />Venture capital investors are only interested in companies with high growth prospects, which are managed by experienced and ambitious teams who are capable of turning their business plans into reality.<br />high<br />Stars<br />Constrained<br />Innovation<br />Ambitious<br />Economic<br />core<br />low<br />Growth<br />high<br />low<br />Kirchhoff’s innovation-growth classification<br />
  15. 15. Equity investors look for increase in value<br />Investor x €<br />B<br />A<br />A<br />B<br />A<br />B<br />Investor<br />Investor<br />Turnover increases<br />
  16. 16. Business angels in the value chain<br />GROWTH<br />NEED FOR CAPITAL<br />IPO<br />RISK<br />Venture Capital<br />Business angels<br />Friends, Family, Fools<br />TIME<br />Seed<br />Start-up<br />Early growth<br />
  17. 17. Raise sufficient financeto create value<br />VC x+y+z <br />€<br />VC x + y <br />€<br />VC x <br />€<br />0 months<br />18 months<br />xx months<br />Team<br />Business idea<br />IPR<br />Reference customers<br />Extended delivery chain<br />
  18. 18. low<br />medium<br />high<br />Formation of value<br />understanding <br />competitors<br />customers<br />business<br />concept<br />products<br />technology<br />team<br />
  19. 19. Product/Service<br />Business plan<br />Industry<br />Management<br />Team<br />Market<br />Research<br />Financial<br />Projections<br />Operations<br />Balanced business plan<br />source: BVCA<br />
  20. 20. Results<br />LIKSA<br /><ul><li>510 LIKSA applicants instructed*
  21. 21. funding granted to 135 companies*
  22. 22. accelerates the commercialisation of the company
  23. 23. improves the target company’s possibility for receiving first investment</li></ul>* by December 31, 2004<br />INTRO<br /><ul><li>has organised private investments to an own line of business
  24. 24. a growing community of 260 private investors (business angels)
  25. 25. 30% investment ratio
  26. 26. added impact from private and public venture capital investments</li></ul>DIILI<br /><ul><li>a renewing group of 85 knowledge capital investors
  27. 27. 15 investments carried out
  28. 28. expedites investment negotiations
  29. 29. has opened up a new path to entrepreneurship</li></li></ul><li>Hop, skip, and a jump<br />commercialisation<br />€<br />preparation for the VC financing round<br /><ul><li>new set of criteria
  30. 30. new level of know-how
  31. 31. results achieved with first round financing</li></ul> investor readiness<br />Start-up<br />Business<br />angels<br />DIILI<br />customers<br />business plan<br />
  32. 32. stepping stone to venture<br /> +358 9 616 991 Itämerentori 2, PL 160, FI-00181 HELSINKI<br />