Tatjana Zabasu, RSG Capital @ TMT.Ventures'08 Zagreb

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Tatjana Zabasu, RSG Capital - presentation from TMT.Ventures'08 Zagreb (http://tmtevents.eu by New Europe Events)

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Tatjana Zabasu, RSG Capital @ TMT.Ventures'08 Zagreb

  1. 1. Investment committee from the inside: simple rules, fast decisions, big money Who and how decides on the future of projects?
  2. 2. RSG Capital & Prvi sklad <ul><li>RSG Capital established in July 2006, as a consultancy & debt financing company targeting early stage companies </li></ul><ul><li>VC fund “Prvi sklad” , managed by RSG Capital established in March 2008 </li></ul><ul><li>10 M € under management </li></ul><ul><li>Focusing on early stage financing </li></ul><ul><li>No industry focus </li></ul><ul><li>Size of investment up to 1.500.000 € for a minority share (up to 50%) </li></ul>
  3. 3. The process <ul><li>Team </li></ul><ul><li>Technology </li></ul><ul><li>Market potential </li></ul>Rejected ~60%
  4. 4. What are we looking for? <ul><li>A great, capable team </li></ul><ul><li>Innovative technology; product/service with unique value </li></ul><ul><li>Elaborated business model </li></ul><ul><li>Market potential / customer need </li></ul><ul><li>Sound marketing strategy </li></ul><ul><li>Scalability </li></ul><ul><li>Reasonable valuation </li></ul><ul><li>Profitable exit strategy </li></ul><ul><li>Alignment of interest of investors’ with </li></ul><ul><li>investee company’s interest </li></ul>
  5. 5. Possible showstoppers <ul><li>Team issues </li></ul><ul><li>Lack of focus </li></ul><ul><li>No scalability, slow growth </li></ul><ul><li>Not in investment focus </li></ul><ul><li>Valuation </li></ul><ul><li>No exit strategy </li></ul><ul><li>Fierce competition </li></ul><ul><li>Low margins </li></ul><ul><li>IP problems </li></ul>
  6. 6. People behind the process VC Fund Investment policy Legislation Investors Management Company Investment Committee Industry Experts Advisory Board
  7. 7. Investment Committee <ul><li>Optional – not all VC funds have an investment committee </li></ul><ul><li>Typically consists of managing director (partner) and senior partners </li></ul><ul><li>Decides on majority or consensus basis </li></ul><ul><li>RSG Capital: </li></ul><ul><ul><li>8-member Investment committee: </li></ul></ul><ul><ul><ul><ul><li>Managing director </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Independent experts </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Representatives of investors </li></ul></ul></ul></ul><ul><ul><li>NDA </li></ul></ul>
  8. 8. Decision making <ul><li>Investment proposal </li></ul><ul><ul><li>Team </li></ul></ul><ul><ul><li>Product/service </li></ul></ul><ul><ul><li>Market </li></ul></ul><ul><ul><li>Main terms included in term sheet </li></ul></ul><ul><li>Investment committee meetings: </li></ul><ul><ul><li>Pros & cons ~ collective intelligence of IC members </li></ul></ul><ul><ul><li>Request for additional information </li></ul></ul><ul><ul><li>Final decision of IC – majority basis, decisive vote of managing director </li></ul></ul><ul><ul><li>Green light for further activities </li></ul></ul>
  9. 9. If things go wrong… <ul><li>Minimizing the mistakes: </li></ul><ul><li>Things to do before investing </li></ul><ul><li>Monitoring after the deal </li></ul><ul><li>Hands on approach: taking action </li></ul>Management issues <ul><ul><li>Underperformance (revenues, gross margin) </li></ul></ul><ul><ul><li>Cost base not controlled </li></ul></ul><ul><ul><li>Working capital problems </li></ul></ul>
  10. 10. If things go wrong… <ul><li>Before investing </li></ul><ul><li>Know the team </li></ul><ul><li>Know the market </li></ul><ul><li>Understand business model </li></ul><ul><li>Monitoring </li></ul><ul><li>Close relationship w management </li></ul><ul><li>Ask for information </li></ul><ul><li>Keep in touch w the market </li></ul><ul><li>Taking action </li></ul><ul><li>Act on early warning signs </li></ul><ul><li>Changes in management </li></ul><ul><li>Good money after bad? </li></ul><ul><li>Review all options </li></ul>Distributed responsibility – yes, but what’s more important is collective knowledge and experience Investment manager Investment committee
  11. 11. RSG Capital Venture capital management Tehnološki park 21 1000 Ljubljana T: +386 1 620 33 00 F: +386 1 620 33 05 [email_address] www.rsg-capital.si

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