Davor Hebel, Fidelity Ventures @ TMT.Ventures'08 Zagreb


Published on

Davor Hebel, Fidelity Ventures - presentation from TMT.Ventures'08 Zagreb (http://tmtevents.eu by New Europe Events)

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Davor Hebel, Fidelity Ventures @ TMT.Ventures'08 Zagreb

  1. 1. The Balkans and Central Europe: a land of opportunity for global VCs and Entrepreneurs How to build, finance and exit successful companies Davor Hebel, Vice President, Fidelity Ventures TMT.Ventures’08 Zagreb
  2. 2. Agenda <ul><li>About us </li></ul><ul><li>CEE and the Balkans opportunity for a global VC </li></ul><ul><li>Some thoughts on building a successful start-up </li></ul><ul><li>Fundraising tips and what to expect from VCs </li></ul>
  3. 3. About us One of the largest global mutual funds: $2 trillion under management… … not so long ago Global VC and growth equity firm with over $1B under management across US, Europe, India and China Investing €3-30M in venture and growth equity investments in Western and Eastern Europe focused in Internet, Software, Media, and Clean Tech Vice President in London Croatian with first hand start-up bruises McKinsey, HBS Boards: Asset Control, Seatwave, Newbay Fidelity Investments Fidelity Ventures European Focus About Me
  4. 4. CEE and the Balkans opportunity for a global VC 2005: “eBay Buys Skype for $4.1 Billion” Estonian development Peer-to-peer VOIP software founded by Friis and Zanstrom (Kazaa) Global champions Regional champions 2008: “Forticom acquires controlling stake for $92M (~€100M valuation)” Polish Largest Polish social network built on Friends Reunited principle 2002: seed funding @ ~$2M valuation 2003/2004: 1 st and 2 nd rounds of funding 2006: NK founded by student Maciej Popowicz 2007: EFF buy 20% for €2M (€10M valuation) Source: public references
  5. 5. Some thoughts on building a successful start-up <ul><li>No need to reinvent the wheel (e.g., Nasza Klasa) </li></ul><ul><li>70% of start-up ideas come from previous work </li></ul><ul><li>It will change anyhow… but it is like a baby </li></ul><ul><li>Experience counts, passion wins </li></ul><ul><li>Complementary skill-sets do work </li></ul><ul><li>Different phases bring different challenges </li></ul><ul><li>The game – investors need to make money </li></ul><ul><li>Find right capital – stage and risk (equity vs. debt) </li></ul><ul><li>Make it last 12-18 months, valuation not key </li></ul><ul><li>Cash is king, profitability queen (especially now) </li></ul><ul><li>Build solid foundations - 1 st mover not always key </li></ul><ul><li>Know your objective - €1M, €10M, €100M, €1B? </li></ul><ul><li>Think about it when you start the company </li></ul><ul><li>Technology sale – good for some </li></ul><ul><li>Build relationships with potential exit partners </li></ul>Finding an idea Building the team Fundraising Growing a company Exiting
  6. 6. Jaws in Space (the art of a good pitch) <ul><li>Keep it simple </li></ul><ul><ul><li>VCs see >100 companies for each one they invest in </li></ul></ul><ul><ul><li>Comparables and analogues really help </li></ul></ul><ul><ul><li>Two questions: </li></ul></ul><ul><ul><ul><li>Why’s this one going to be big? </li></ul></ul></ul><ul><ul><ul><li>Is it going to be a nightmare? </li></ul></ul></ul><ul><li>Some rules </li></ul><ul><ul><li>Don’t make us think too hard (e.g., comparables) </li></ul></ul><ul><ul><li>Put together a short slide deck and simple financial model </li></ul></ul><ul><ul><li>Science not allowed (usually) </li></ul></ul><ul><ul><li>Establish credibility, name dropping allowed </li></ul></ul>
  7. 7. How much do you need and how can VCs help? Typical Pre-Money Valuation Required IRR Valuation/ Return 30% 50% 70% 100% <$1M $2-10M $10-30M $40M+ Series B Angel Series A Expansion Stage $10-15M Anything goes $3-5M Anything goes Typical raise Go-to-market Recruiting Connections General advice Recruiting Connections Product Recruiting Connections Exit Recruiting Connections VC help Old rules : software $30M, chips $50M, SaaS $60M, systems $100M New rules : web 2.0 <$10M, startup costs much lower (cloud, open source, moore’s law)
  8. 8. Choosing investors <ul><li>Money is increasingly abundant </li></ul><ul><ul><li>If the team is credible </li></ul></ul><ul><ul><li>If someone has made money doing something similar </li></ul></ul><ul><ul><li>If the investors can see a good return in 5 years or less </li></ul></ul><ul><ul><li>And can write a big enough cheque (or small enough) </li></ul></ul><ul><li>Investor quality matters but so does fit </li></ul><ul><ul><li>Average fund makes no money! (1/3 rule, focus on hits) </li></ul></ul><ul><ul><li>Fund size and stage </li></ul></ul><ul><ul><li>Have they done something similar before </li></ul></ul><ul><ul><li>How can they help (tangibly) </li></ul></ul><ul><li>Use the analogues </li></ul><ul><ul><li>Yahoo (Moritz, Sequoia); Google (Moritz); YouTube (Moritz) </li></ul></ul><ul><li>Make them work for you – it is expensive money! </li></ul>
  9. 9. Reminder…you miss 100% of shots you don’t take Send me questions & thoughts: davor.hebel@fil.com