by Dr. Joachim Behrendt

1. STAGE FINANCING FOR VENTURES
Dr. Joachim Behrendt

2. INTRODUCTION
StartNowHow
• Open seminar series for active and prospective entrepreneurs
• 10 sessions on monthly basis until summer 2016
• Covers relevant theoretical and practical aspects of entrepreneurship
• Based on lecture „entrepreneurship“ @Bogazici University
• Based on experiences of entrepreneurs, investors, mentors and consultants
• Each session with guest speaker (entrepreneurs, investors, mentors, etc.)
• Language: English / Turkish
• Thursdays 17.15h – 19.30h
• Next session: Thu 12. May 2016
• Topic: The Investment Process – Pitching, Negotiations and Termsheet
• Certificate provided for participants joining at least 70% of the sessions
• Early registration for each session required (eventbrite), limited capacity!
• Priority for regular participants
Startnowhow – Seminar 813.04.2016 2

3. INTRODUCTION
StartNowHow - Seminar Topics (preliminary)
1. Thu 1.10.15: The entrepreneurial ecosystem in Turkey
2. Thu 15.10.15. Entrepreneurship as a profession
3. Thu 12.11.15: Opportunity recognition and evaluation
4. Thu 10.12.15: Planning, developing and testing a business model
5. Thu 7.1.16: Market and competitor research
6. Thu 11.2.16: Financial planning for startups
7. Thu 10.3.16: Digital Marketing planning and control
8. Thu 14.4.16: Funding the startup – stage financing for ventures
9. Thu 12.5.16: The investment process – pitching, negotiations and termsheet
10. Thu 9.6.16: Success and failure as an entrepreneur
Startnowhow – Seminar 813.04.2016 3

4. RAISINGMONEY
Initial New Venture Losses
13.04.2016 4Startnowhow – Seminar 8
Source: Timmons, J.A./Spinelli, S., New Venture Creation, p.427

5. RAISINGMONEY
Low-Budget vs. Big-Money-Models
13.04.2016 5Startnowhow – Seminar 8
Source: Volkmann, C.K./Tokarski, K.O./Grünhagen, M., Entrepreneurship in a European Perspective, p.291

6. PRE-SEEDPROGRAM
6Startnowhow – Seminar 813.04.2016
RAISINGMONEY
Startup Life Cycle

7. RAISINGMONEY
Life Cycle Financing
13.04.2016 7Startnowhow – Seminar 8
Source: Timmons, J.A./Spinelli, S., New Venture Creation, p.433

8. RAISINGMONEY
R&D Grant Programs
Startnowhow – Seminar 8
Source: Novicor
13.04.2016 8

9. RAISINGMONEY
Business Failure Rates
13.04.2016 9Startnowhow – Seminar 8
Source: Shane, Ihe Illusions of Entrepre-
neurship, New Haven / London 2008
US study UK studies
Source: Stokes / Wilson, Small Business
Management, p. 87

10. RAISINGMONEY
Lemons and Pearls
13.04.2016 10Startnowhow – Seminar 8
Source: Timmons / Spinelli, New Venture Creation, p. 158

11. RAISINGMONEY
Venture Life Cycle and Target Returns
13.04.2016 11Startnowhow – Seminar 8
Source: Leach, J.C./Melicher, R.W., Entrepreneurial Finance, p.255

12. CO-INVESTINGWITHBIC
• Agreement BIC – Investors
• BIC Angel Investments is a brand of BIC Behrendt International Consulting
A.Ş., owned 100% by Joachim Behrendt
• BIC provides angel investment services but does not invest itself
• Joachim Behrendt invests himself alongsinde other BIC angels
• Interested investors enter into a service agreement with BIC
• By invitation only / ends anytime one party decides not to continue
• Contains limited confidentiality provisions
• Exptected (but not obligatory): At least two investments per year, minimum
ticket size normally 25,000 TL
• Angel Investments
• Investors invest directly into the startup and become shareholders in A.Ş.
• All BIC angels (including Joachim Behrendt) belong to the same shareholder
group in proportion to their investment, protected by minority rights
• Termsheet and definitive agreements (template-based) are provided by legal
advisors of BIC, quick agreement with startups targeted
• BKS application process for startup handled by BIC
12Startnowhow – Seminar 813.04.2016
BIC Angel Investment Network: Legal Framework
RAISINGMONEY

13. RAISINGMONEY
Investment Process of Business Angels
13.04.2016 13Startnowhow – Seminar 8
Source: Volkmann, C.K./Tokarski, K.O./Grünhagen, M., Entrepreneurship in a European Perspective, p.300

14. RAISINGMONEY
VC‘s Organizational Structure
13.04.2016 14Startnowhow – Seminar 8
Source: Smith, J.K./Smith, R.L./Blisss, R.T., Entrepreneurial Finance, p.90

15. RAISINGMONEY
VC Capital Investment Process
13.04.2016 15Startnowhow – Seminar 8
Source: Smith, J.K./Smith, R.L./Blisss, R.T., Entrepreneurial Finance, p.95

16. VALUATION
• $3.5m investment in a company
• Expected to earn $2.5m per year in 5 years
• VC expects to make 50% per year on invested capital
• Comparable companies trade at 15X price / earnings ratio
The VC Valuation Method - Example
Source: Bürkan Beyli, Buran Ventures

17. VALUATION
New Venture Valuation: Market Multiples
13.04.2016 17Entrepreneurship
Source: Grichnik, D./Bretttel, M./Koropp, C./Mauer,R., Entrepreneurship, p.101

18. VALUATION
• The VC must own enough to realize 50% return per year
 (1 + 0.50)5 x ($3.5 million) = $26.6 million
• After five years, the company is expected to be valued at
 15 x $2.5 million = $37.5 million
• $ 26.6 / $ 37.5 = 70.9%
• Implied (post-money) valuation today:
 $3.5 million / 70.9% = $4.9 million
The VC Valuation Method- Example (2)
Source: Bürkan Beyli, Buran Ventures

19. OUTLOOK
StartNowHow - Outlook
• Today‘s materials will be made available to participants for downloading
• Next Seminar: „The investment Process – Pitching, Negotiatons and
Termsheet“
• Guest Speaker: Mehmet Onarcan, BIC Angels / Mentors Network Turkey
• Thursday, 12.5.2016, 17.15 – 19.30h
• Don‘t forget to register early (eventbrite) - capacity 50 people!
• Priority for participants / registrants from today‘s session
• General rule: Allocation of seats according to participation
• Regular participation = certificate (70% participation)
Startnowhow – Seminar 813.04.2016 19

20. BIC ANGEL INVESTMENTS
Dr. Joachim Behrendt
Phone: +90 212 328 1939
Fax: +90 212 328 1933
www.bicangels.com
http:/twitter.com/joachimbehrendt
http://tr.linkedin.com/pub/joachim-behrendt/18/706/a7a
Email: j.behrendt@bicangels.com