1. THE CASE FOR SEEDING EUROPE
+Turkey
STARTUPTURKEY 2014
VITALY M. GOLOMB | @VITALYG

2. +Investor
K E E N P R I N T. C O M
I N V E S T O R H A R V E S T. C O
S TA R T U PA D D V E N T U R E . C O

3. #startupturkey supports #ukraine

4. THE SILICON VALLEY FUNDING STACK
circa 2014
M&A / IPO
GROWTH EQUITY
$100M+ VC FUNDS
ANGELS/SEED VCs
ACCELERATORS
BOOTSTRAP/Friends Family & Fools

5. EUROPEAN FUNDING STACKcirca 2014
M&A / IPO
GROWTH EQUITY
$100M+ VC FUNDS
ANGELS / SEED VCs
ACCELERATORS
BOOTSTRAP / FFF

6. 2001 DOT COM CRASH
US VC FUNDS RAN AWAY FROM EUROPE
few, STRONG EUROPEAN VC FUNDS SURVIVED

8. LARGE FUND THESIS ARE BASED
ON $5M+ FIRST ROUND
… and pre-date

9. LIMITED BIG DEALS
+
LIMITED EXITS
=
MOST REGIONAL
FUNDS TOO BIG
TO PROVIDE GOOD
RETURNS

10. YESTERDAY’S SEED IS TODAY’S SERIES A/B

11. YESTERDAY’S IPOs ARE TODAY’S ACQUIHIRES

12. SOURCE: STEVE BLANK

13. MEDIAN EXIT = $20M
SOURCE: SEED DB

14. MINIMUM ACCEPTABLE VC RETURN
20% IRR OR 6X ON CASH
$300M FUND = $1.8B

15. MODEL BROKEN EVEN IN SILICON VALLEY
TOP QUARTILE = 2.1X

16. SOURCE: STEVE BLANK

17. DO YOU FEEL
LUCKY?

18. WELL DO
YOU, PUNK?

19. EUROPE PRODUCES HIGHER
MULTIPLES THAN U.S.

20. EXIT ARE 25% SMALLER, BUT…
ENTRY VALUATIONS ARE 3-4X LOWER

21. EUROPE PRODUCES
50% AS MANY EXITS AS U.S.
AND 1/3 OF $100M+ EXITS
WITH ONLY 20% OF U.S. VC

22. MEDIAN CASH-ON-CASH
$100M+ EXIT MULTIPLE
4.5X
US
2005-2011 SOURCE: EARLYBIRD, DOW JONES VENTURE SOURCE
7.2X
EUROPE

23. REPEAT ENTREPRENEURS
IN VC FUNDED COMPANIES
50% NEW
93% NEW
50% REPEAT
7% REPEAT
1998
2007
SOURCE: EARLYBIRD GLOBAL ENTREPRENEURSHIP REPORT

24. NUMBER OF LATENT EUROPEAN
ENTREPRENEURS GROWING
9.0%
8.5%
2012
7.4%
2006
5.2%
4.5%
2000
SOURCE: EARLYBIRD GLOBAL ENTREPRENEURSHIP REPORT

25. DEAL FLOW GROWING
12% CAGR

26. BLACKJACK

27. SPLIT
DOUBLE DOWN
MULTIPLE
INVESTMENTS
IN THE SAME
THEME
INCREASE
OWNERSHIP %
AS RISK IS
REMOVED

28. TYPICAL “BLACKJACK” 3 STAGE
INVESTMENT PATH (IN EUROPE)
$500K@ $8M VAL
=
14% OWNERSHIP
(POST DILUTION)
$100K@ $1M VAL
=
10% OWNERSHIP
$200K@ $4M VAL
=
12.5% OWNERSHIP
(POST DILUTION)

29. CASH-ON-CASH EXIT MATH
$30M
5.25X
$50M $100M
8.75X
17.5X

30. TYPICAL FUND NEEDS AT LEAST TWO
30X EXITS OUT OF 10-20 INVESTMENTS
“BLACKJACK” FUND HAS 10X MORE CHANCES

31. @vitalyg

32. “BLACKJACK” SEED FUND
FOR EUROPE
LAUNCHING IN 2014
@vitalyg

33. “I SKATE TO WHERE THE
PUCK IS GOING TO BE,
NOT WHERE IT HAS
BEEN.”
!
WAYNE GRETZKY

34. want the slides?
follow @vitalyg