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MtB Italy Tour 2010, Torino

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MtB Start-up School: education on entrepreneurship, business planning, venture capital market and Silicon Valley eco-system provided by Alberto Onetti during the special events of the Mind The Bridge 2010 Italy Tour.

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MtB Italy Tour 2010, Torino

  1. 1. Introduction to Entrepreneurship. <br />From Startups to Venture Financing<br />Mind the Bridge ItalyTour 2010<br />Torino, June 10th<br />Alberto Onetti, Chairman, Mind the Bridge Foundation<br />With the support of:<br />
  2. 2. Agenda<br />
  3. 3. Agenda<br />
  4. 4. State of Entrepreneurship in Italy<br /><ul><li>Lack of large companies
  5. 5. In Italy SMEs are 98% of the total
  6. 6. Mostly mature business
  7. 7. Primarily Services (67% of GDP), Manufacturing is only 24%
  8. 8. Innovative industries play a minor role (2-5%)
  9. 9. Strong family business vocation
  10. 10. “One man only at the helm.”
  11. 11. “Companies are life-long enterprises.”
  12. 12. “First get some revenue, and then invest.”
  13. 13. “Think real.” </li></ul>ITALY: INDUSTRY CONTRIBUTION TO GDP (2009)<br />Source: CrESIT 2010<br />
  14. 14. State of Venture Finance in Italy<br />[Source: Dow Jones Venture source, PWC/National VC Association, AIFI]<br /><ul><li>Lack of an established venture capital community
  15. 15. Of the €3.8B invested yearly (avg. 2005-2009), approximately €70M went to early-stage investments (AIFI & Pricewaterhouse­Coopers 2005-2009)
  16. 16. Only 255start-ups were able to get funded in the last three years, with an average deal size of €1M (AIFI & Pricewaterhouse­Coopers 2007-2009)
  17. 17. In 2009: 79 deals despite the financial crisis (€98M invested, -15% compared to prior year, while overall investments declined by 52%) (AIFI & Pricewaterhouse­Coopers 2009)
  18. 18. Small size of the stock market does not help
  19. 19. The stock market capitalization to GDP ratio is lower than 60%, versus 140% in the United States and 170% in the United Kingdom (IMF & World Federation of Exchange)
  20. 20. The aforementioned lack of large companies makes the exit from investment difficult</li></li></ul><li>State of Italian R&D<br /><ul><li>Quality basic research
  21. 21. Cumulative R&D investments are €17B (4% of GDP), whose 30% from universities and 20% from public and non-profit (ICE, Cotec, Istat)
  22. 22. 400k scientific publication in the period 1998-2008 ranking 8th in the global classification (7th for number of citations) (Thomson Reuters, 2008)
  23. 23. Biotech: 233 clinical trials in progress during 2009 (Ernst & Young 2010)
  24. 24. Issues in turning research into business
  25. 25. Lack of efficient technology transfer offices
  26. 26. Universities do not offer incentives for lecturers to spin-off business initiatives
  27. 27. Scarcity of skilled executives with strong entrepreneurial skills
  28. 28. Italian scientists do not think business</li></li></ul><li>Italy: Key Issues<br /><ul><li>Deal flow (# deals and quality)
  29. 29. High mortality (“crisi del primo miglio”)
  30. 30. Bridging research into business
  31. 31. Mindset
  32. 32. Managerial skills
  33. 33. Exit on the domestic market
  34. 34. Technology hot shots aspire to sell out to new economy “leviathans”
  35. 35. Language barriers</li></li></ul><li>Agenda<br />
  36. 36. Ingredients for a Startup<br />
  37. 37. What is an Entrepreneur<br />
  38. 38. Average entrepreneur’s profile<br />
  39. 39. Manager vs Entrepreneur<br />
  40. 40. Agenda<br />
  41. 41. The Big Idea!!!<br />… That’s Matters a Lot, but It’s All About Execution …<br />
  42. 42. The Questions Every Entrepreneur Must Answer <br />
  43. 43. The Business Plan<br />THE OPPORTUNITY:<br />The problem we solve (description of your product highlighting the benefits to the users/customers)<br />The competive advantage (why your product is better. Compelling reason to buy)<br />THE MARKET:The market you are addressing (market size, potential growth, competition)<br />BUSINESS PLAN<br />THE BUSINESS MODEL:<br />What are you looking for (capital you are raising- use of proceeds)<br />Financials (Burn and cash positive projections)<br />THE TEAM:The team and your relevant experience in the domain you're addressing<br />
  44. 44. Why a business plan<br />
  45. 45. business plan? Ok vsKo<br />What investors want to see <br />
  46. 46. Turning Scientists into Entrepreneurs<br />OK<br />KO<br />
  47. 47. Talking $$$<br />
  48. 48. Financials: Statement of Operations<br />
  49. 49. Who reads a business plan?<br />
  50. 50. Agenda<br />
  51. 51. The Funding Decision<br />Bootstrapping<br />Equity Financing<br />Founders’ capital/savings<br />Family/friends<br />Angels<br />Early stage VC<br />Early sources<br />VentureDebt/Loans<br />Acconts receivable<br />Strategic Partners<br />Retained earnings<br />VC firms<br />Corporate VC<br />Private placement<br />Investment banking<br />Public markets<br />Later sources<br />
  52. 52. The Angel Investor<br />
  53. 53. The Venture Capitalist<br />
  54. 54. Agreement variables and control mechanisms<br />
  55. 55. VC Financing Process: Getting Through The Funnel<br />1,000 Leads<br />150 Meetings<br />Actively Pursued70<br />$ <br />$ <br />5 – 10 Financed<br />$ <br />$ <br />Less than 1% of all leads get funded<br />$ <br />
  56. 56. What does an investor do with a business plan?<br /><ul><li>Looks to see who sent it</li></ul>15 sec<br /><ul><li>Analyzes key aspects</li></ul>sector<br />location<br />investment required<br /> 60 sec<br /><ul><li>Reads the plan</li></ul> 15 min<br /><ul><li>Decides whether or not</li></ul> to request a formal <br /> presentation<br /> 10min<br />Total: 26 min 15 sec<br />
  57. 57. Venture Capitals: Average Investment Portfolio<br /> DEFAULTS <br /> BREAKEVEN <br /> “FIRE SALES” <br /> ZOMBIES <br />IPO/M&A<br /> GOOD IPO/M&A<br /> WILD ONES (IPO) <br />TOTAL<br /> 60% <br /> 12% <br /> 10% <br /> 8% <br /> 6% <br /> 4% <br /> 0%<br />100%<br />Source: ATV<br />
  58. 58. Why Venture Capital ?<br />
  59. 59. Venture Capital Investments slowed down, but US stills leads the way<br />
  60. 60. Agenda<br />
  61. 61. The History of the Valley<br />
  62. 62. The (real) History of the Valley<br />
  63. 63. The (real) History of the Valley<br />? <br />Today:25 of Fortune 100<br />Adobe Systems<br />AMD<br />Agilent Technologies<br />Apple Inc.<br />Applied Materials<br />Business Objects<br />Cisco Systems<br />eBay<br />Electronic Arts<br />Google<br />Hewlett-Packard<br />Intel<br />Intuit<br />LSI Logic<br />Maxtor<br />National Semiconductor<br />Network Appliance<br />Nvidia<br />Oracle Corporation<br />SanDisk<br />Seagate Technology<br />Solectron<br />Symantec<br />Sun Microsystems<br />Yahoo!<br />…<br />INTERNET<br />PERSONAL COMPUTERS<br /><ul><li>Yahoo, ebay, Google (90s)</li></ul>INTEGRATED CIRCUITS<br /><ul><li>3Com, Adobe, Cisco </li></ul>WAVES OF INNOVATION<br /><ul><li>Apple (80)
  64. 64. Kleiner Perkins (72)</li></ul>DEFENSE<br />INNOVATION NETWORKS<br /><ul><li>Intel (68)
  65. 65. HP (47)
  66. 66. Lockheed
  67. 67. NASA</li></ul>1930 1940 1950 1960 1970 1980 1990 2000 <br />
  68. 68. The main pillars<br />KEY QUESTIONS<br /><ul><li>Is that replicable / portable?
  69. 69. Is it sustainable long-term?
  70. 70. What is the impact of the changing international outlook?</li></li></ul><li>Soft Factors<br />Key to Success<br /><ul><li>The importance of Dynamism, speed: continuous evolving world
  71. 71. Approach to Risk
  72. 72. Value of Failure (not just a downside but a must-have)
  73. 73. Importance of the Hub: a world of opportunities
  74. 74. Think Big</li></li></ul><li>Raising money Today (@#$!) in SV<br />Don’t talk to me if you…<br /> are you not local<br /> how many exits again?<br /> don’t show me the buyer (don’t IPO me…)<br /> haven’t jumped yet <br />
  75. 75. Why now?<br />It’s the best opportunity<br /> talent abounds <br /> from scarcity comes clarity<br /> innovation comes from hunger<br /> startup cost ~0<br />
  76. 76. (5) Lessons from Google<br />the team is all (almost)<br />healthy disregard for the impossible<br />big problems are better than small ones<br />users first<br />don’t pay attention to the VC bandwagon<br />
  77. 77. Agenda<br />
  78. 78. Mind the Bridge foundation<br />Mission:<br />to promote a new Italian entrepreneurial ecosystem that is:ethical, highly professional, internationally focused, excellence driven<br />Model:funded by foundations/companies/private sector/donorsnot government <br />partnering with the most relevant actors<br />Independent<br /><ul><li>bridging opportunities of the Silicon Valley with Italian talent
  79. 79. associating mentors and role models
  80. 80. professionalizing the business planning skills
  81. 81. using and building the network
  82. 82. “give back” to build a bigger pie</li></ul>Connecting Talent <br />
  83. 83. Building The Bridge: The Pillars<br /><ul><li>Discovering and Nurturing the Italian Talents (MtB Italy Tour 2010)
  84. 84. Selecting the best of breed (Annual MtB Business Plan Competition & MtB Call for Ideas)
  85. 85. Providing training & education to the new generation of entrepreneurs (MtBBootcamp and Coaching)
  86. 86. Showcasing the most promising startups and opening an international debate (MtB Venture Camp @ Corrieredella Sera)
  87. 87. Hosting&mentoring the most promising startups in the Silicon Valley (MtB Gym)
  88. 88. Pitching US investors / partners (MtB Gran Finale events)</li></ul>Connecting Talent <br />
  89. 89. Building The Bridge: The Timeline<br />
  90. 90. 2009 selectedStart-ups<br />Revolutionary antenna system (Milano) <br />Wi-Fi-derivedsolutions (Milano and Boston)<br />Comprehensivenon-invasive solution for both vertebral fractures and bone strenght assessment (Lecce)<br />Solutionto update anydigital information (Sassari)<br />Social-networkwhichallowusersto create musicthrough the web (Treviso)<br />Social marketplacefortravel, whereexperts can provideuserswith information and personalizedoffers (Milano)<br />Virtual and Augmented Reality technology (Pisa) <br />
  91. 91. THANK YOU FOR YOUR ATTENTION<br />Questions & Answers<br />BLOGS: <br />SOCIAL MEDIA: <br />www.mindthebridge.org<br />http://siliconvalley.corriere.it/<br />Facebook: Mind the Bridge - Connecting Talent<br />Twitter: MindTheBridge<br />Contactsinfo@mindthebridge.org<br />USEFUL LINKS: <br />www.mindthebridge.org<br />

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