3. Know your “Enemy” A lesson from the past
The “Art of War” Chapter 3 - Strategic Attack:
“…if you know your enemies and know yourself, you can win a hundred battles without a
single loss. If you only know yourself, but not your opponent, you may win or may lose. If you
know neither yourself nor your enemy, you will always endanger yourself.”
4. IT Start-up Lifecycle
Revenue
Sweat Equity,
FFF & Business
Angels BA’s
Syndicates
VC Funds, Strategic Alliances
Public Market
Birth of Next Generation of Startups
Know your Partner The actors in the investment lifecycle
Regional Funds
5. Investments in knowledge intensive companies are considered
risky due to:
o the intangible nature inherent their activities
o the relevant investment required
o perceived high default rates
o lack of an established income stream
Keep in mind that a risk capital investor
o Wants the money back
o Wants more (much more) than they invested
o Wants to know when
o Wants to measure the opportunity/risk
Know your Partner The actors in the investment lifecycle
6. Early stage (Proof of concept funds,
BAs, Seed Funds, Venture Capitalist)
Pre-Seed Seed Start up
Later stage (Venture Capitalist)
Second round
Expansion
Capital
Scope
Company
life-cycle
Identification
of Market
potential
Pre-
business
plan
Prototyping
And product
development
Business
plan
Commercial-
scale manuf.
And sales
Company
established
but not
invoicing
Structuring
commercial
channels
Building up
turnover
Continuous
ideas/concepts/
products
innovation
Making Profits
Know your Partner Financial Cycle and more
7. What further measures could help to increase access to funding and
channelling of funds to those who need them?
o support the development of regional co-investments funds of adequate size
o simplified and harmonized regional cooperative framework between managing
authorities
o providing business angels with a European passport to facilitate cross border
investments
o providing mutual recognition of existing fiscal incentives for business angels investing
freely across Europe
How can the EU further develop private equity and venture capital as an
alternative source of finance for the economy?
o the use of co-investment funds within the European Structural and Investment Funds
(ESIF) framework, could speed up the equity market and increase the
diversification of the source of funding
o exit opportunities for investors could be enhanced by supporting the development of
Post Angels Funds, funded by Public and Corporate investments, which would help to
reduce the length of time to exit
Building a Capital Market Union Some proposals
