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Fundraising in Europe                 10 non-textbook lessons for                       entrepreneurs                     ...
Agenda• Venture/Angel Capital:  – How to decide if you need it  – How to navigate Angels & VCs• On raising Capital in UK/E...
#1 - Sell shares only when you need SPEEDENTREPRENEUR HAS…                                     …AND NEEDS…                ...
#2- Know your place in the FUNDING SPECTRUMNET CASHPOSITION               Grants                                   Venture...
DO IT LIKE A JACANA                      5
#3 – Decode the Business Angels                   • Angels invests own moneyAngels are         • Small amounts, early, at ...
#4 – Decode the Venture Capital business                    • VCs raise a fund every 2-4                      yearsVCs run...
#5 – γνῶθι…τω επινδυτήAngels maynot letyou fail,VCs maygive you abigsuccessSOURCE: www. http://www.instigatorblog.comx.Mil...
#6 - Series “A” Crunch: MIND THE GAP             +NET CASH POSITION                                Closed            Publi...
#6 - Series “A” Crunch in NUMBERS                               Germany & UK are more affected by the VC/AC disconnect    ...
NOTE: The         blurring of AC/VC in the US is comingto Europe (maybe)                                          www.dram...
#7 – A new taxonomy of investors   #Venture Accelerators   Astia (for female geeks)   Aim for the one that suits   Seedcam...
#8- Connect the fundraising dots                              “what they offer”   Fight the                   vs.   inform...
Agenda• Venture/Angel Capital:  – How to decide if you need it  – How to navigate the VC scene• On raising Capital in UK/E...
#9 - The US VC is prone to “bubbles”, when they     burst startups become orphanedUS VC is big &…            … some say al...
#9 – US VCs face an IPO crunch                     CBOE @ 06.11.12:                                        IF Index >30   ...
#9 – Startups in the US need 2x avg. capital to           build £100m business                                          EU...
#9 – US tech acquisition of EU        companies is a well travelled road to exit         #US tech companies hold record of...
Go. See. Come back.x.Million Capital Ventures                                            19
# 10 - EU Growth drivers to ride on     The $172bn eCommerce market in Europe will grow 1.7x     between 2010-15          ...
# 10 - EU Growth drivers to ride on         EU-5 Mobile Ad spending will grow 10x between 2011-2012         (2x as fast as...
# 10 - EU Growth drivers to ride on Internet of Things: The ratio of Devices /Humans is expected to grow 3x by 2020 2011: ...
Wireless connectivity flattened our world       85% of worlds population       covered by wireless signals       vs       ...
Your turn                to talkx.Million Capital Ventures                             24
European consumers are shifting online…                                           United States    Internet Users         ...
European consumers are going mobile fast …                                      East & West EuropeMobile Subscriptions    ...
…and are more social than most                                      2x                                 27
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10 non textbook lessons for European Entrepreneurs

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What I have learned from working with entrepreneurs (and being one), with VCs and angels in Europe, why we are different to our US counterparts and why this *may* matter.

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10 non textbook lessons for European Entrepreneurs

  1. 1. Fundraising in Europe 10 non-textbook lessons for entrepreneurs Maria Dramalioti-Taylor Managing Partner x.Million Capital Ventures SA 07.11.2012x.Million Capital Ventures 1
  2. 2. Agenda• Venture/Angel Capital: – How to decide if you need it – How to navigate Angels & VCs• On raising Capital in UK/EU UK Entrepreneur: “Why bother? I am off to the US” UK Investor: ”Go, but not before you see this…” 2
  3. 3. #1 - Sell shares only when you need SPEEDENTREPRENEUR HAS… …AND NEEDS… …money to move 1 *FASTER* than OWN Original THEREFORE FACES… capital allows idea …intensifying competition2 …SO SELLS shares to Best-in-market to pay for.. founding team Hiring3 Faster product development Large potential Infrastructure market Commercialisation Geographical expansion x.Million Capital Ventures 3
  4. 4. #2- Know your place in the FUNDING SPECTRUMNET CASHPOSITION Grants Venture Capital Venture Capital Bootstrapping Angel Capital Series A Series B,C,D Family (€2m-€20m) (€5m-€20m) Venture Debt + - Closed Public SCALE STAGE ALPHA BETA 1st Revenue x.Million Capital Ventures 4
  5. 5. DO IT LIKE A JACANA 5
  6. 6. #3 – Decode the Business Angels • Angels invests own moneyAngels are • Small amounts, early, at low valuationlike women: – €10k-€250k attemperamental valuation €0.5-€2m& (mostly) • Exit: – sell at €5-10mirreplaceable valuation & make 1.5- 3x – bring VCs, get diluted (may) make 5-10x • AIM: 2x capital (but mostly get capital back) 6
  7. 7. #4 – Decode the Venture Capital business • VCs raise a fund every 2-4 yearsVCs run a – Invest other people’s moneybusiness. • Invest the funds over 5 yearsThey make it • Exit (sell) via M&A or IPO • They take:sound like – 2.5% pa management fee on funds managedBlack Magic. – Carry = 20% x [Total Return at Exit] – [Total AmountIT IS NOT. Invested] • AIM: ONE 10x home run 7
  8. 8. #5 – γνῶθι…τω επινδυτήAngels maynot letyou fail,VCs maygive you abigsuccessSOURCE: www. http://www.instigatorblog.comx.Million Capital Ventures 8
  9. 9. #6 - Series “A” Crunch: MIND THE GAP +NET CASH POSITION Closed Public SCALE - ALPHA BETA STAGE 1st Revenue DISCONNECT ANGEL /VC VC ANGEL CAPITAL € 500k € 2m x.Million Capital Ventures 9
  10. 10. #6 - Series “A” Crunch in NUMBERS Germany & UK are more affected by the VC/AC disconnect ICT Deal volume per deal size bracket 16,000 900 US , 14,339 800 Deal Volumje ( non US) 14,000 Deal Volume (US) 12,000 700 UK 600 10,000 500 8,000 US , 5,585 400 6,000 US , 4,705 300 4,000 Germany 200 2,000 100 - Russia - < $ 0.5M $0.5M - $2M >$2MSource: Data from ThomsonOne, Period: 10 yearsx.Million Capital Ventures 10
  11. 11. NOTE: The blurring of AC/VC in the US is comingto Europe (maybe) www.dramalioti-taylor.org x.Million Capital Ventures 11
  12. 12. #7 – A new taxonomy of investors #Venture Accelerators Astia (for female geeks) Aim for the one that suits Seedcamp your needs best Interesting blog: Springboard http://disruptivegrowth.wo Accelerator Academy rdpress.com/2010/10/14/do- 500 stratups accelerators-help-raise- Y-Combinator funds/ …. # Super Angels AngelLab AngelList # The NEW lean VC They treat every entrepreneur as an individual x.Million, EC1 CAPITAL et al.x.Million Capital Ventures 12
  13. 13. #8- Connect the fundraising dots “what they offer” Fight the vs. information “what you need” asymmetry – Initial capital per idea Sources – Sector focus: do they www.thefunded.com understand it? www.fredestin.com – Risk tolerance: can they venturehacks.com deal with uncertainty? earlystageadventures.com – Compatibility: will their www.adventurista.com pride suffer if you fail? – Terms (& strings attached)x.Million Capital Ventures 13
  14. 14. Agenda• Venture/Angel Capital: – How to decide if you need it – How to navigate the VC scene• On raising Capital in UK/EU… UK Entrepreneur: “Why bother? I am off to the US” UK Investor: ”Go, but not before you see this…” 14
  15. 15. #9 - The US VC is prone to “bubbles”, when they burst startups become orphanedUS VC is big &… … some say already in a “bubble”Investments percapital in US is5.8x higher than EU US EU 0.15% 0.026% 5.8x GDP GDP 15
  16. 16. #9 – US VCs face an IPO crunch CBOE @ 06.11.12: IF Index >30 THEN IPOs drop dramatically 16
  17. 17. #9 – Startups in the US need 2x avg. capital to build £100m business EU = 1/2 x USA Source: Early Bird Ventures, 2012 17
  18. 18. #9 – US tech acquisition of EU companies is a well travelled road to exit #US tech companies hold record offshore cash 100% 80% 60% 40% 20% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 EU acquisitions by US companies non EU acqusitions by US companies 18Source: Zephyr M&A, 2012
  19. 19. Go. See. Come back.x.Million Capital Ventures 19
  20. 20. # 10 - EU Growth drivers to ride on The $172bn eCommerce market in Europe will grow 1.7x between 2010-15 eCommerce ($bn) EU5: 1.7x in 5 Yrs $172 bn < 10% of EU-5 retail EU-5 EU-5 $172 $292 2010 2015x.Million Capital Ventures 20
  21. 21. # 10 - EU Growth drivers to ride on EU-5 Mobile Ad spending will grow 10x between 2011-2012 (2x as fast as in the US) Mobile Ad Spending (mn) $ 1,2 9 9 EU5 growth: 10x in 4 Yrs $ 12 2 2011 2015x.Million Capital Ventures 21
  22. 22. # 10 - EU Growth drivers to ride on Internet of Things: The ratio of Devices /Humans is expected to grow 3x by 2020 2011: 2020: 8.99bn connected devices 1.8 connected devices 24bn connected devices per person 6.6 connected devices per person 0.1 0.62 1.73 1 0.88 6.52 10.71 11.86 Fixed ( excl POTS) Mobile Short Range Other ( MAN, Satellite) x.Million Capital Ventures 22
  23. 23. Wireless connectivity flattened our world 85% of worlds population covered by wireless signals vs 80% of world population connected to the electrical gridSource: Mary Meeker, KPCB, 2012 23
  24. 24. Your turn to talkx.Million Capital Ventures 24
  25. 25. European consumers are shifting online… United States Internet Users 90M 150M East & West Europe 25
  26. 26. European consumers are going mobile fast … East & West EuropeMobile Subscriptions United States 2004, Mobile subscriptions EU > US 26
  27. 27. …and are more social than most 2x 27

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