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Smau Milano 2015 - Pietro Strada
1. B and C Financing Rounds
and Beyond
23 October 2015
2. Disclaimer
Neither this presentation nor any of its contents may be used without the prior written consent of
Silverpeak LLP, trading as ‘Silverpeak technology investment banking’ (“Silverpeak”).
The information in this presentation reflects prevailing conditions and our views as of this date, all
of which are subject to change. In preparing this presentation, Silverpeak has relied upon and
assumed, without independent verification, the accuracy and completeness of all information
available to us or from public sources or which was otherwise reviewed by us.
4. Silverpeak overview
Silverpeak banks growth tech companies and corporates seeking to acquire them
Workflow software for B2B sales
persons
JUNE 2015
Venture debt and equity
financing
UK / UK
Advisor to Artesian
Next-gen orchestration SaaS for
Unified Communications
JUNE 2015
has been acquired by
UK / Hong Kong
Advisor to Syntelligence
Electronic ticketing software for
transit, tourism and loyalty schemes
AUGUST 2015
has been sold to
UK / Japan
Advisor to Smart
Transactions Group
BSS and analytics software for
mobile operators in emerging
markets
JULY 2015
has acquired control of
Mauritius / South Africa
Advisor to Digitata
ESTABLISHED INVESTMENT BANK TO GROWTH TECH COMPANIES
Rebranding of Go4Venture Advisors and combination
with Centerboard Partners in July 2015
110+ deals and 100+ man/years investment banking
experience
Focused on: internet/digital media; software; enabling
technologies; vertical solutions (fintech, healthtech,
cleantech)
Go4Venture continues as an online version of its Bulletin
(11,000 recipients)
Building a community around deal information
(www.go4venture.com/register)
Deal information based on Headline Transaction Index
(HTI) data published since 2004
SPONSOR OF GO4VENTURE
8. The median European series B round is now €12m, with a wide distribution
5
10
15
20
25
30
35
40
45
50
Adyen
GlobalFashionGroup
Home24
WorldRemit
Helpling
QuantaFluidSolutions
SaltsideTechnologies
Aledia
Trustly
Carmudi
Deliveroo
Qubit
YPlan
Azimo
GetYourGuide
Devialet
EyeEm
MediakraftNetworks
Feedzai
Lamudi
Intersec
FalconSocial
Enevo
Curetis
Cryptzone
KnCMiner
Wandera
Genomics
TrialReach
AccurisNetworks
Traxpay
Captify
eGym
Quinyx
JobAndtalent
Coresystems
SophiaGenetics
Soundtrackyourbrand
Kantox
Twenga
CurrencyFair
PEInternational
Purplebricks
Tado
Skeleton
Metail
DocPlanner
Melijoe
AyoxxABiosystems
Hazelcast
Scarosso
Qinec
LaRuchequiditoui
Drivy
Orderbird
Swrve
Sonnenbatterie
ArtesianSolutions
MarketInvoice
Gousto
Crowdcube
Source: Go4Venture HTI Database.
Deals with
values within:
# of
Deals
+/- 10% of
Median Value
5
+/- 30% of
Median Value
31
+/- 50% of
Median Value
46
Total Deals: 61
Median: €12m3rd Quartile 1st Quartile100
150
Large HTI Series B Fundraisings (€mn) Q3 2014 - Q2 2015
200
Legend
– US-focused investor
– US investor in Europe
– European investors only
10. Investors in B-rounds are a small number of recurring names and a long tail
ca. 150 investors participated
in B-rounds in the last year…
4 3 2 1 # of deals
Includes transactions completed between July 2014 and June 2015.
Wylie Family Trust
5
11. … but only 52 investors led the rounds …
4 3 2 1 # of deals
Includes transactions completed between July 2014 and June 2015.
5
12. … with a considerable variety of investor participants
4 3 2 1 # of deals
Includes transactions completed between July 2014 and June 2015.
5
FAMILY
OFFICES
Wylie Family Trust
PE, BANKS,
AM, OTHER
STATE
SUPPORTED
COUNTRY/IES
SPECIFIC
PAN-
EUROPEAN
SCOPE
US VC’s
WITH EU
PRESENCE
US VCs
STRATEGICS
14. Good execution is (of course!) key for B-rounds
Empty cells indicate information is not publicly available.
Sources: Go4Venture HTI Database, CrunchBase database, articles, press releases.
Clear
Elevator
Pitch
P P P P P P
Users / Customers (#) 3.5k NA >1k 4.3k 500k 86k
Revenue (€mn) €185mn €21mn NA NA €2mn NA
Team Size (#) 240 150 300 50 30 25
International Presence P P P P P
Momentum
Revenue Growth (%) 100% 200% 282 NA 200% NA
Strategic Partners P P P
Board Profile P P P P
Prior Raise (€mn) €12mn €28.9mn €8.9mn Undisclosed €6mn €1.9mn
Advised
Undisclosed P Undisclosed Undisclosed Undisclosed Undisclosed
Size
3rdParty
Validation
Empty cells indicate information is not publicly available.
Sources: Go4Venture HTI Database, CrunchBase database, articles, press releases.
15. Clear
Elevator
Pitch
P P P P P P
Users / Customers (#) NA 8M 85M 50M NA 10M
Revenue (€mn) €45mn NA NA NA €15mn+ NA
Team Size (#) > 150 c. 150 c. 100 250 c. 100 100
International Presence P P P P
Momentum
Revenue Growth (%) 70% NA NA NA NA NA
Strategic Partners P P P
Board Profile P P
Prior Raise (€mn) €8mn €35mn €17mn €12mn €5mn $15mn
Advised
Undisclosed Undisclosed P Undisclosed Undisclosed Undisclosed
Size
3rdParty
Validation
Good execution is expected for C-rounds!
Empty cells indicate information is not publicly available.
Sources: Go4Venture HTI Database, CrunchBase database, articles, press releases.
16. Recurring themes
Characteristics of successful companies vary obviously due to different sectors and business
models. A few themes however are always part of a good story
Here are the Series B themes, Series C are similar, but the numbers obviously bigger
Ability to articulate the value proposition
Market sizing: bottom-up and top-down
Customer segmentation
Customer-based forecasting
Competitive analysis
Unit Economics
‒ Customer acquisition costs
‒ Sales cycle
Pricing structure
Attractive business fundamentals
Clear and “investible” equity story
Strong value proposition
Proven revenue model
Sustainable business model and cost structure
Operational leverage
Referenceable customers
Organisational scalability
Geographical expansion plan
Overarching indicators
Revenues in the € millions, often > €5m
Sizeable team, often larger than 50 FTE
Presence in multiple international
markets
Customer/user base of meaningful size
‒ Indicatively 50+ customers in B2B or 100k-
1m+ users in B2C or B2B2C
Users/revenue growth of 50-100%+
Third party validation from
knowledgeable people or entities
‒ Commercial partners
‒ Technology partners
‒ Board members
‒ Senior team members
‒ Investors
17. Final negotiationsGo-to-marketPreparation phaseBefore the fund raising
What needs to happen for a successful B-round fundraising
Raise the company
visibility and profile
‒ Board that includes high-
profile independent
industry figures
‒ Attract senior talent,
possibly from non-
domestic markets
‒ PR and industry analysts
coverage
Financial support from
existing investors (finance
the business to sustain
process)
Establish early
relationships with
potential investors in
“non-suspect times”
Defining and sizing the
target market, linking
into commercial
pipeline, revenues and
market share
Correct positioning of
the business (incl.
competitive landscape)
Business model based on
unit economics that can
be verified in due
diligence
Preparing and rehearsing
the management
presentation
Involve the first-line
reports to the CEO, as
appropriate
Balance time/resources
between exploring broad
range of investors versus
the absolute need to be
focused on the business
Identify and speak to
the “A-list” investors:
relevant experience,
available funds, fitting
criteria
Phase the approaches:
first B-list, then A-list
Communicate
efficiently: provide
clear and concise
answers that can be
backed in the DR
Process that makes the
investors feel “special”
Use competitive deal
dynamics appropriately
Staged supply of info
Meeting or exceeding
the forecasts over
the fund raising
period
Involve the Board to
support the CEO in
the negotiations
Be well informed of
current market
terms (financial and
non-financial)
18. Typical mistakes in financing rounds
Mismanaged process
“Polluting” the market ahead of the process
Selling to investors like selling to clients
Missing the numbers during the process
Wrong timing
Starting too late, increasing the risk of running out of money
Starting too early without sufficient demonstration points
Overplaying the cycle: rushing for fund raising when not ready
Weak story
Go-to-market story too high level
Limited or no exposure to strongest competitors or global players
Lack of exit planning