This document summarizes a seminar on the investment process for startups. The seminar covered topics such as pitching to investors, negotiating termsheets, valuation methods, and the post-investment process. It provided examples of valuation techniques used by venture capitalists and outlined the next steps in BIC Angel Investments' seminar series on entrepreneurship.

1. THE INVESTMENT PROCESS – PITCHING, NEGOTIATIONS AND
TERMSHEET
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 9.June 2016
• Topic: Success and Failure as an Entrepreneur
• AWARD CEREMONY
• 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 812.05.2016 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 / AWARD CEREMONY
Startnowhow – Seminar 812.05.2016 3

4. Investment
Closing
4BIC Angels Investments12.05.2016
• Post investment process
(mentoring etc.) starts
immediately after termsheet
• Startup has to set up AŞ and
provide full initial funding
• (If not already established)
• Asset deal with old startups‘
company at arm‘s length
principle possible
• Short due diligence
• Financials if established
• Legal
• Personnel / reference check
• Definitve legal agreements
standardized
• Articles of Association, Share
Purchasing Agreement
• Employment / Noncompete
• Techncal Service Agreement
• Legal support (lawyers)
• If BKS investment: Application
process in parallel, managed by
BIC
• Full capital payments
immediately after BKS approval
/ signing definitive agreements
THEINVESTMENTPROCESS

5. RAISINGMONEY
Venture Life Cycle and Target Returns
12.05.2016 5Startnowhow – Seminar 8
Source: Leach, J.C./Melicher, R.W., Entrepreneurial Finance, p.255

6. VALUATION
New Venture Valuation: CF Multiples
12.05.2016 6BIC Angels Investments
Source: Smith, J.K./Smith, R.L./Bliss, R.T., Entrepreneurial Finance, p.422,423

7. 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

8. VALUATION
New Venture Valuation: Market Multiples
12.05.2016 8Entrepreneurship
Source: Grichnik, D./Bretttel, M./Koropp, C./Mauer,R., Entrepreneurship, p.101

9. 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

10. OUTLOOK
StartNowHow - Outlook
• Today‘s materials will be made available to participants for downloading
• Next Seminar: „Success and Failure as an Entrepreneu“
• Guest Speaker: Utku Subakan, Bionluk
• With Certificate Award Ceremony
• Thursday, 9.6.2016, 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)
• BIC101 Acceleration Kickoff Event:
• Thu, 2.6., 9.00 – 12.30h
• Kolektif House Levent
Startnowhow – Seminar 812.05.2016 10

11. 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