Galileo Venture Academy - 3/3/2010 Support for a 15 minutes presentation NB: Galileo is the European GPS :-)

1. Ready for VC? A short check list. Olivier Witmeur 1

2. First seek to understand,then to beunderstood. Stephen Covey, The SevenHabits of Highly Effective People, Habit 5 Galileo Venture Academy - Olivier Witmeur ©2010 2

3. The name of the game The VC business is to make money with equity position in non listed firms: Invest and sell (exit) Make 3 to 10 times the investment over 3-7 years Growth potential and timing are mission critical. Money is invested to support growth: R&D, S&M, internationalization… VC help/support entrepreneurs to grow their business (partner) Main VC criteria (beyond a strong BP): Management team Uniqueness Growth potential Exit Galileo Venture Academy - Olivier Witmeur ©2010 3

4. 1. Do yourHomework. From BP To Pitch Formal Aspects Mantra Pitch Executive Summary Investor Presentation Key Success Factors FinancialPlan Production / SCM Milestones / Stages Sales & Marketing R&D Financings Risk & sensibility Analysis Organization Team IPPosition Board Partnerships Business Model Vision (Exit incl.) MarketResearch Environment Analysis (Competition incl.) Benchmarking Networking Proof ofConcept 4 Galileo Venture Academy - Olivier Witmeur ©2010

5. 2. Understandthatitis a people business! Experience Competences Passion YOU Commitment Vision Trustworthy Adaptable Open Mind 5 Galileo Venture Academy - Olivier Witmeur ©2010

6. What makes you (truly) unique Team, know-how… Partnerships, exclusivity… ? Business model Technology, secrets, patents… Brand, location… First Mover Advantage 6 Galileo Venture Academy - Olivier Witmeur ©2010

8. Directvs indirect sales

9. Sales process duration

11. Market diversification (international)

12. Product diversification

14. Sales & Marketing constraints

15. Investment required

16. Additional developments7 Galileo Venture Academy - Olivier Witmeur ©2010

17. 5. The exit route Main exit routes : Trade sales IPO Buy-out (Convertible Debts) Multiple aspects to take into consideration when analyzing exit path and timing: Management / Founders  Personal life impact! Company  Development stage Investor  Funding cycle Market  Market conditions 8 Galileo Venture Academy - Olivier Witmeur ©2010

19. Use of funds

20. Key People

21. Milestones

22. Options

23. Exit organization Contingent valuation 9 Galileo Venture Academy - Olivier Witmeur ©2010

24. About Valuation VCs value the future performance, not the past. V = F (future cash-flows, value @ exit, exit time, expected return) Typical expected return: Seed 60-100% Start-up 50-60% Early development 40-50% Growth 30-40% VC are not looking for majority position as such, especially during first rounds. Current valuation are on the (very) low side … … but valuation correction mechanisms can be very important. Galileo Venture Academy - Olivier Witmeur ©2010 10

26. Smiling (fun is OK!)

27. Humble but not modest

28. Passionate …

29. … but realistic

30. Avoid:

31. Too technical

32. Too much numbers

33. Too much names

34. Jargon (Argh!)

35. Prepare and rehearseI WANT IT NOW! 11 Galileo Venture Academy - Olivier Witmeur ©2010

36. Where to go? VCs organize multiple financial rounds: Seed & Start-up stage: <500k€ with Business Angels and local investors Early growth: 1M€-2M€ with national VC firms Fast growth: >2M€ with international VC syndicate, often lead by A national VC National VC association in most countries BVA in Belgium: www.bva.be AFIC in France : www.afic.asso.fr BVK in Germany: www.bvkap.de BVCA in UK: www.bvca.co.ok … EVCA atEuropeanLevel: www.evca.com Galileo Venture Academy - Olivier Witmeur ©2010 12

37. Final thought You never get a second chanceto make a first impression. Galileo Venture Academy - Olivier Witmeur ©2010 13

38. Thankyou CONTACT: Olivier Witmeur Solvay Brussels School Of Economics and Management Université libre de Bruxelles owitmeur@ulb.ac.be www.olivierwitmeur.net 14 Galileo Venture Academy - Olivier Witmeur ©2010