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J son partners

  1. 1. Presentation 4th April 2012"Connecting Mentors with Startups”Karl  Johannesson  J’son  &  Partners    
  2. 2. TopicsIntro: -Global trends Role of Mentors: -Russian trends - Why mentor -Kazakhstan status - Ideal mentor - Mentors for KazakhstanStartup Key Factors: Recommendations -Phases - To develop a VC industry ecosystem - Create legislation - Funding mechanism
  3. 3.   About Karl Johannesson About J’son & Partners Swedish  Na+onality   Speaks  5  languages  fluently Resident  in  Luxembourg ˜ 30+ years as Management Consultant [since 1981] ˜ Management Consultancy ˜ Founder of J’son & Partners ˜ Offices in Moscow, Almaty, Astana, Brussels, ˜ Worked in Europe, US, Russia and Central Asia ˜ Business Plan, Strategies, Research etc. ˜ Vaste International expertise in ICT ˜ 100+ clients in ICT ˜ Large International Contact Network ˜ Famous “brand” in Russia ˜ Understands Kazakhstan ICT sector: o Digital Communications 2010 & 2011 o Many client projects for Kazakhtelecom, GSM Kazakhstan, Zerde, NIF, KazTranscom , MCI MINT etc etc. Special+es Sample  big  and  successful  projects  -­‐  J’son  &  Partners   Finance Strategy Market Business Projects Analysis Plan M&A Number 1 Number 3 Number 1 Satellite Operator IT Company Central Asia ICT Hub ???
  4. 4.   ¢ Fundraising – < 100 M equity deals in Russia ¢ M&A for clients – internet, mobile, mobile content, portals ¢ Business Plans and Investment Teaser across Russia and Central Asia Several successful seed- and start-up ventures: Sample: ¢ Founded Sotovik.ru with $50K and developed to #1 mobile portal in Russia. Sold to private investor after reaching monthly net profit of +50K per month In Kazakhstan ¢ Mentor 3 start-ups in the field of ICT and digital media ¢ Assist in raising financing for 3 start-ups+ ¢ Develop plans for “Mobile Applications Center” [web developers] ¢ Platform for start-up fairs at DigitalCom 2011 and 2012
  5. 5.   Managing Partner of Almaz Capital Partners Alexandr Galitsky participated in Press- conference for startup projects and gave master-class for startup project managers on how to create a real business from an idea Alexey Trusov, Project manager Alexandr Galitsky, of iStartUp Managing Partner of Almaz Capital Partners “As a specialist, who supervised start-up projects I would like to say that it is great that we were invited, and the necessary conditions were created and organization of the event, which can get the best start-up projects. Today Digital Communications is the most important event in the field of ICT in Kazakhstan.”
  6. 6.   The basics Profit Venture Pre-IPO Seed Venture Capital & Invest- Capital Capital Acquisitions ment Risk Seed Stage Early Stage Later Stage IPO Stage In Kazakhstan there is more venture money available than “worthwhile projects”. In the US the other way around with a factor of X 1000 Venture capital-backed companies are a driver for growth
  7. 7.   Venture capital-backed companies produce 21 % of U.S. GDP and 11 % of employment in the private sector, despite accounting for less than 0.2 % of all businesses – this shows how critical Venture Capital is ! Kazakhstan <500 times less Venture Capital to GDP ratio in 2011.
  8. 8.   ¢ Requirements for getting a start-up funded by VCs is increasing. ¢ VCs are now more selective and will focus even more on picking only the really good deals. ¢ The evaluation of a start-up should add up to a multi-million market potential before the start-up becomes interesting from a VC perspective. ¢ Also they want to see ideas that present a clear value proposition. ¢ Team behind the start-up is critical. Proven record and experience with dealing with critical stakeholders to your start-up is regarded as highly valued. Also ¢ Show your ideas and get feedback from mentors. ¢ Don’t be afraid of having ideas stolen. Good ideas can get lost because mentors could not provide feedback. ¢ Your pitch has to be perfect first time
  9. 9.   Silicon Valley Magic “Silicon Valley’s culture can be explained by its interconnectivity and blurring of boundaries between contributors to the ecosystem. The culture has been created by all stake holders – founders, mentors, investors, lawyers, bankers, PR people, journalists, bloggers – supporting the entire business lifecycle, overseeing success from idea and inception through to access to capital, expansion, exit and even failure” In effect Silicon Valley is a big Mentor Park 1/3 of world total venture capital is located in Silicon Valley. Another 1/3 of the remaining capital is located in the rest of the US, while the remainder is
  10. 10.    “Sexy”  Russian  Web  Start-­‐up  Plus Venture Comment #1 Russian Online Travel 60 million game downloads in the first year from initial release without venture money Best Offer service - Highest revenue growth in Russia’s internet history: from zero to $15 million monthly revenues in one and a half years Browser toolbar creation service High-performance web server, reverse proxy and e-mail proxy software provider Lady Fashion E-commerce Web recommendation and discovery service to end-users. Source:  Forbes largest internet startup funding in Russia $55M
  11. 11.   2015 2025 ew HIGH N Digital  Content Digital  Devices Industrial Consumer  Electronics e ld Environmental av or Value Internet   Technologies Broadb Br l W Technologies Digital he gita Telecommunica+ons Nano   and Brain   T Content   Di Body  Technologies Informa+on  Technology   Cellular  Communica+ons Space  Technology   Applica+ons Television Entertainment Robo+cs Satellite  Communica+ons Web  5.0 MEDIUM Mobile  Communica+ons Ci+zens Virtual   Technologies Adver+sing Biotech   Reality Informa+on  Society Ar@ficial Computers Global  Networks Intelligence   Informa+on  Technology   Media Cellular  Communica+ons Telecommunica+ons Legend  Segments Web  2.0 Content   Television Entertainment Established Environmental  Technologies Adver+sing Satellite  Communica+ons Emerging   Mobile  Communica+ons Disrup+ve  Technologies Informa+on  Society Big   Time Impact LOW 2015 Source:    J’son  &  Partners 2010 2025 Transformed Narrow  @me   Long  @me Kazakhstan is on halfway towards becoming digital and could focus on
  12. 12.  You  are  in  the  wrong  part  of  the  World  J Source:    B&H,  Corpora+ons,  J&P There is a direct relationship between R&D spend and technological, know- how and new ICT industrial activity including start-ups and spin-offs. Kazakhstan is not on the radar screen yet.
  13. 13.   A mentor is “a trusted friend, counselor or teacher, usually a more experienced person.” Source:  Wikipedia ¢ Benjamin Graham acted as a mentor for Warren Buffet ¢ Plato mentored Socrates ¢ Aristotle mentored Plato ¢ Alexander the Great had Aristotle ¢ Steve Jobs had Larry Ellison ¢ Kivi had professors at KBTU Mentors are unique because they know about all the mistakes you can possible make and they have a great network. And they are typically inexpensive. If they like your idea they can help you tremendously. But you must take the decisions and execute. The might take a small piece of your equity.
  14. 14.   Typical ICT start-up 1 or 2 person typically starts Pomegranate using savings or other fixed revenues No hardware is needed as in prototyping phase or making a mobile application. Pomegranate is likely to survive for only 6 months. Has 10% chance of achieving breakeven, another 10% chance to breakeven in the next 3 months. With the help of mentor-s Pomegranate success chances are increasing dramatically
  15. 15.   MENTOR Scale Up Investment MENTOR Start Selling MENTOR Marketing 4P Finish Prototype MENTOR Pitching Modify 2014 Developing Prototype 2013 2012 Minimal Viable Product
  16. 16.   Tipping Point in Kazakhstan ? When will Kazakh Investors [angels, seed-financiers] want to invest their money in Kazakh start-ups or companies rather than putting money in real estate, stocks taxi business or on the bank ? This will happen when ? ¢ Few local success stories that has made it and can be role models ¢ Investing into start-ups is “getting popular” ¢ Tax- and risk taking initiatives are introduced for privates and corporates [too invest in start-ups] ¢ When ICT and application environment is more mature [compare Russia in 2000-2005 and Russia in 2012] ¢ When broadband and mobile & fixed internet penetration reaches critical mass in 2014-2015 ¢ When targeted start-up Funds start appearing [one announced April 3rd 2012 J] ¢ + When the stock market in Kazakhstan is reformed, including enabling “baby-IPOs”
  17. 17.   1 Setting up of a Mentoring Programme in Kazakhstan sponsored by the government and private businesses ˜ Connect business leaders with entrepreneurs who have achieved success already. ˜ Introduce Mentor Program within universities and networks of SMES. ˜ Create processes supporting this. Review Board and coaching. ˜ Public presence 2 Connect Profitable big businesses with start-ups through seed-finance mentor projects; Beeline, Samruk-Kazyna, Kcell etc. allocating funds for mini-projects and/or seed-projects with “guaranteed” success ˜ Attract and allocate small scale project financing $5,000-25,000 with managed pay-out 3 Create a Mobile Innovation Center [ecosystem] ˜ For existing and smaller start-ups can get the first critical know-how, access to hard ware, application environment and soft skills e.g. a“leg-up” to get the idea off the ground. 4
  18. 18.   5 Setting up of a in PPAP (public-private-academic partnership) Program in Kazakhstan together with public sector players like Zerde and Alatau IT Park and large and small enterprises, and universities (both local, e.g., KIMEP, SDU, etc., and foreign, e.g., U. Texas, Austin in the US, Lancaster U. and Newcastle U in the UK, and Waseda U. in Japan). Quote Ramesh Kini, KBTU 6 Introduce a comprehensive Package of Legislation [after consulting with SMEs, investors and start-ups and other stakeholders] to unlock the full potential of Kazakhstan’s entrepreneurial spirit ! U.S. introduced such a scheme recently. Find and/or create a VC Fund ready to focus on Students – future stars. 7 Give: business planning skills, crucial to young entrepreneurs Make: shortlist selected by a judging panel made up of active angel investors and sponsors. Make: Vetting workshops on pitching, accounting and legal advice, networking and
  19. 19.   There will be an internationally structured “Start-up Fair” with real investors and real projects. So get ready !!!!
  20. 20. I  am  ready  to  contribute  as  Mentor    to    any  viable  Kazakh  start-­‐up    !Karl  JohannessonE-­‐  mail:  kjohannesson@jsonpartners.comMobile:  +  7  777  017  1900