Exporting your e business from the investment perspective
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GLOBAL GROUP Ventures provides venture consulting and private equity services focused on Central and Eastern Europe. Ken Globerman gave a presentation on entrepreneurship from an investment perspective. He discussed GLOBAL GROUP's work since 2010 advising various organizations. Globerman also analyzed Poland's developing early-stage investment ecosystem and the gap in available funding there. The presentation covered topics such as the venture capital investment cycle, historical fund performance, and case studies of startups that received funding.
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Exporting your e business from the investment perspective
- 1. GLOBAL GROUP V E N T U R E S Venture Consulting / Private Equity Services Entrepreneurship from the Investment Perspective Ken Globerman November 27, 2012
- 4. GLOBAL GROUP Ventures u Active in Central Eastern Europe (CEE) since 2010
- 5. Select Organizations With Whom GLOBAL GROUP Has Cooperated or Advised
- 6. A Developing Early-Stage Capital Investment Eco-System in Poland Ernst & Young ranks Poland 1st in Central Eastern Europe and 36th globally with regards to “Investment Attractiveness” – suggesting a developing investment eco-system Cultural Differences Law and Exit Corporate Opportunity Governance Investment Educational Eco-System Talent Pool System Availability Country of Source: Pitch Johnson Presentation and Risk Source: 2011 Ernst & Young, “Global “Venture Capital & the Finance of Capital Venture Capital and Private Equity Innovation” – Metrick/Yasuda Country Attractiveness Index”
- 7. Debt Capital Public Equity Follow-on or Public § Income / Dividend Addressing an Investment Gap in Poland producing § Mature / Stable § Conservative Public Offering Private Equity Access to External Funding or Initial Buyout § Growth slowing & maturing § Cash Flow (EBITDA) positive § May be Profitable B, C Rounds Venture Capital § Rev. generating § More rocket fuel required !!! § Often still not Profitable A Round Venture Capital § Usually Revenue Producing § Typically Cash Flow Negative § Not Profitable Seed Round § Company/ Angel or Prototype formed § Maybe Revenue Producing “Bootstrapping” Incubators Contests § Projects and Grants “Ideas” Stage
- 8. So You’re Thinking About Going “Global”… http://www.youtube.com/watch?v=ZTFJocQBLyE
- 9. Raising MONEY The Investment Cycle Money Fund Raised from Managed by LP GP Fund Investors Manager Invest: Exit: Sale/ Portfolio IPO, Fund Companies Liquidated Acquired
- 10. Historical VC Fund Performance VC equity typically needs 3+ years to evaluate on an IRR basis. Source: Publically available information, Sand Hill Econometrics and “Venture Capital and the Finance of Innovation”, Metrick/Yasuda.
- 11. 10-Year Total Value Multiples (TVM) First Round Investment History ~74% of all first round TVM = Total Value Multiples investments lead to negative return % Probability Distribution Source: Publically available information, Sand Hill Econometrics and assumptions found in “Venture Capital and the Finance of Innovation”, Metrick/Yasuda. Private transactional data with 10 years of life, initiated between 1990 and 2000, Assumes companies “still private” after 10 years have failed.
- 12. Time Value of MONEY! Positive! Cash Dividend Dividend Sale / Divest Flows! 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Negative! Invest Invest 1 st Round 2 nd Round Cash Flows!
- 13. What Kind of Company do you want to be? Lifestyle Business 10X Business* Note: The “10X business concept” is discussed at length in the book “Great By Choice”
- 14. Top 5 Things Investors Care About In Start-ups
- 15. Case Study 1 Łukasz Foltyn Portable Version Naspers tenders writes code for of the 100% of equity communicator Communicator and Gadu Gadu is de-listed Warsaw Equity Gadu Gadu lists Holdings buys on Warsaw 45% stake Stock Exchange 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 WEH increases equity stake Naspers begins Gadu Gadu from 45 to 80% to buy shares of Premieres Gadu Gadu Source: Publically available data
- 16. Case Study 2
- 17. Tequila Mobile GLOBAL Free-to-play mobile social games network GROUP V E N T U R E S End of 2010 Venture Consulting / Private Equity Services Peak of embeded April 2012 distribution Total gross 10M unique users on revenue generated from free- Tequila Planet platform 2003-2007 to-play exceeds $7M within 1 year Started as a (embedded distribution) Mid 2011 Mobile Games Development Closed private Shop investment round for $1.5 million April 2011 Presnt Day 2007 Tequila Raising Pivoted to a Planet additional „freemium” Dec 2007 Platform Growth Early 2010 model Tequila Mobile Platform direction launched Capital Incorporation: commenced Decision to Spin-off with a 10 build its own distribution & in- engineer team app billing platform and 500k in cash
- 18. Global coverage GLOBAL Players in 80 countries! GROUP V E N T U R E S Venture Consulting / Private Equity Services 35 employees; 5 nationalities 20 million users across 80 countries Team based in Wroclaw, London, Berlin, Madrid, Beirut Co-fouders still keep majority stake in the company #3 Rising Star in Technology Fast 50, Deloitte 2011
- 19. Case Study 3
- 20. Case Study 3 FIRST EXTERNAL ANGEL INVESTOR: ~200K CHF ----- Immediate relocation to Started as outsourced PRODUCT PIVOT: Created California Programmer Consultants product algorithm to (first clients Switzerland) summarize search results VC A-ROUND: Got attention from Copenhagen Winner Raised in US film industry; built USA digital advertising integration system 2006 2007 2008 2009 2010 2011 2012 Jarek’s • “Dominate the Niche” and “Bring us a 100x return story” Lessons • “Get out of the Office; Talk to your customers” Learned • “Solid US investor connections? Not so fast…”
- 21. The Investor vs. The Entrepreneur Summary Points The Investor’s Perspective The Entreprenuer’s Perspective } Are we prepared to give up part of our Company? } How committed are we? } What aspirations do we have? Lifestyle? 10x returns? } Do we need financing? How much? What for? } Time horizon: Infinite
- 22. We’ve only touched the tip of the iceberg!
- 24. Final Thoughts
- 25. Dziękuję! For More Information: Ken Globerman ken.globerman@globalgroupventures.com www.globalgroupventures.com www.linkedin.com/in/kengloberman