1<br />How To Web: Venture capital demystified<br />Philipp Kandal / @apphil/ CTO & co-founder skobbler<br />9th June 2011...
2<br />Brief intro: skobbler is a startup with > 50 employees and significant VC investment<br />Source: OpenStreetMap Cre...
3<br />Entrepreneurship and pitching for VC is hard work, but the ride is fun!<br />
4<br />Venture capital can mean many different things<br />Incubators / seed financing<br />Angels / early stage<br />Vent...
5<br />What do VCs expect? What are fundable businesses?<br /><ul><li>Exit possibility
5-10 x return
Fast growing business
Proof of concept not investment heavy</li></li></ul><li>6<br />Venture capital doesn’t make you (as founder) rich, it’s on...
Basic terms of venture capital term sheets explained<br /><ul><li>Valuation (Pre- and Post-Money)
Liquidation preference
Drag along regulations
Vesting
Voting rights / Board control
Stock option pools</li></li></ul><li>Risks in raising Venture capital<br /><ul><li>Loose of control
Liquidation preferences (especially “double dip” ones)
Convertible debts
Vesting schedules
Pure exit-driven business
No shop provisions
Squeeze out in future rounds</li></li></ul><li>Understanding the typical negotiation phases for closing a VC is crucial<br...
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Venture Capital demistified

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Venture Capital demistified

  1. 1. 1<br />How To Web: Venture capital demystified<br />Philipp Kandal / @apphil/ CTO & co-founder skobbler<br />9th June 2011<br />
  2. 2. 2<br />Brief intro: skobbler is a startup with > 50 employees and significant VC investment<br />Source: OpenStreetMap Creative Commons Attribution-ShareAlike 2.0 licence (CC-BY-SA).<br />
  3. 3. 3<br />Entrepreneurship and pitching for VC is hard work, but the ride is fun!<br />
  4. 4. 4<br />Venture capital can mean many different things<br />Incubators / seed financing<br />Angels / early stage<br />Venture Capital / A series<br />
  5. 5. 5<br />What do VCs expect? What are fundable businesses?<br /><ul><li>Exit possibility
  6. 6. 5-10 x return
  7. 7. Fast growing business
  8. 8. Proof of concept not investment heavy</li></li></ul><li>6<br />Venture capital doesn’t make you (as founder) rich, it’s only a start<br />6<br />
  9. 9. Basic terms of venture capital term sheets explained<br /><ul><li>Valuation (Pre- and Post-Money)
  10. 10. Liquidation preference
  11. 11. Drag along regulations
  12. 12. Vesting
  13. 13. Voting rights / Board control
  14. 14. Stock option pools</li></li></ul><li>Risks in raising Venture capital<br /><ul><li>Loose of control
  15. 15. Liquidation preferences (especially “double dip” ones)
  16. 16. Convertible debts
  17. 17. Vesting schedules
  18. 18. Pure exit-driven business
  19. 19. No shop provisions
  20. 20. Squeeze out in future rounds</li></li></ul><li>Understanding the typical negotiation phases for closing a VC is crucial<br /><ul><li>Teaser paper
  21. 21. Pitch
  22. 22. Business plan validation
  23. 23. Term sheet
  24. 24. Due diligence
  25. 25. Contract / closing</li></li></ul><li>Venture capital is a numbers game – approach as many as you (reasonably) can<br /><ul><li>Structure the VCs you want to approach in A,B,C targets
  26. 26. Approach them in phases
  27. 27. Approach as many as you can
  28. 28. Personal introductions are key</li></li></ul><li>Don’t give up quickly<br /><ul><li>Character and persistence is the key skill for entrepreneurs
  29. 29. Most VCs invest more in people and characters as businesses</li></li></ul><li>Assume only the deal is done once it’s signed<br />
  30. 30. Keys to maximize values<br /><ul><li>Proven market
  31. 31. Proven product
  32. 32. Proven team
  33. 33. Revenues (This is king!)</li></li></ul><li>14<br />Red flags to walk away from VC negotiations<br /><ul><li> Investments in direct competitors
  34. 34. Bad track record / reputation (check references)
  35. 35. “Dumb money” (unless explicitly wanted)</li></li></ul><li>15<br />A good venture capitalist offers much more as plain “dumb” cash<br /><ul><li>Mentoring
  36. 36. Industry contacts
  37. 37. Paths to exit routs
  38. 38. Technology & HR knowledge</li></ul>15<br />
  39. 39. Think big& Change the world, don’t do a MeToo!<br />
  40. 40. Good further readings on this topic<br /><ul><li>Guy Kawasaki: The Art of the Start
  41. 41. Founders at Work
  42. 42. The Startup Game
  43. 43. VentureBeat(http://venturebeat.com)
  44. 44. Ben’s blog (http://bhorowitz.com)
  45. 45. Babbling VC (http://babblingvc.typepad.com)
  46. 46. Fred Wilson (http://www.avc.com)
  47. 47. The Equity Kicker (http://www.theequitykicker.com)</li></li></ul><li>Great Events to get in touch with Enterpreneurship & the Venture Capital Industry<br /><ul><li>Seedcamp
  48. 48. StartupWeekend
  49. 49. SchoolForStartups (Romania)
  50. 50. StartupDigest (mailing list with events)
  51. 51. Demo (conference)
  52. 52. Basically any barcamp or industry conference</li></li></ul><li>19<br />Remember: It’s a fun ride<br />Enterpreneurship is a great way to new experiences! <br />
  53. 53. THANK YOUfor your kind attention!Get in touch: Philipp Kandal, philipp.kandal@skobbler.com Mobile: +49 172 4597015<br /> Follow me on <br />.com/apphil<br />

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