This presentation was made for StartSmart event about angel investing and angels perspective to the investment target (ie. startup).

1. StartSmart !
Petri Lehmuskoski
Co-Founder – Gorilla Ventures Oy
@Petrileh

2. >85 %
<10 %

3. • Petri Lehmuskoski, portfolio entrepreneur
– Toptronics 1983 (exit 2005)
– Topsoft 1985
– Turun Tietokeskus 1989
– Diggibag AB 2000 (exit 2005)
– Gorilla Ventures 2012
• Education
– Business College 1989
– eMBA (partially) 2004-2005
– Harvard Business School 2010

4. • Experience
– Building turnover from 0€ to 120M€
– Managing organization from 1 person to 180 persons
– Expanding operations from 1 country to 7 countries
– Running multiple companies simultaniously
– Largest singel deal 14M€
– Three time hours away from bankruptcy
• Startup relevance
– First ”angel” investment in 1988
– Seen x.xxx pitches
– Analyzed 1.000+ startups
– Invested in 30+ companies
– Active in operational level in 6 startups

5. My mission: ”I am going to help 30
succesfull companies to be formed
every year”

6. Areas to be covered
• Why startups fail ?
• What investors look at startups ?
• What kind of investors there are ?

7. Startups five stages
•
Idea/Invention
=> Hallucination
=> Externally shared vision
=> Business validation
=> Innovation
There are no shortcuts to success !
And money can distract you…

8. Each stage requires
• Loads of learning
– Product thingking
– Customer development
– Business model development
– Team development
– Different KPI’s (old metrics become vanity metrics)
– Administration
• And financing

10. Before you can
run, you need to
learn to crawl !

12. Theory
Problem
Solution
Competition
Market

13. Reality
Problem
Solution
Competition
Market

14. Competition
1. Do nothing
2. Other way to solve the
problem
3. Do ourselves
4. Direct competition

15. ”The difference between the
winning startups and those who
lose is that the winners
understand why customers buy.
The losers never do.”
Steven Blank

16. Areas to be covered
• Why startups fail ?
• What investors look at startups ?
• What kind of investors there are ?

17. Problem
• Whose problem is it ?
– Users or customers ?
• How many customers in major markets have the problem ?
• Are there other ways to solve the problem ?
• Has the problem been validated ?

18. Different worlds, different things
Corporation
Start-up
Execution
- ”Good sales person”
-
-
Product/Market Fit
- Can it work in theory ?

19. Added value
•
•
•
•
How big is the pain ?
How much money is involved if problem solved ?
What are drawbacks (solving the problem) ?
Do you meet one of the three ”must have conditions in value
added ?

20. 3 ”must-have” conditions
(G Moore, Crossing the Chasm,
pg 102-103)
• It enables a previously unavailable strategic capability that
provides a dramatic competitive advantage in an area of
prime operational focus
• It radically improves productivity on an already wellunderstood critical success factor
• It visibly, verifiably, and significantly reduces current total
overall operating costs

21. Solution
• Is you solution scalable in all areas
– Technology, logistics, sales, team etc.
• Is the solution solving the real problem
• What does the solution need to be implemented ?
• What does the execution require from team

22. Team
•
•
•
•
•
•
•
Do you have a team ?
How experienced is your team ?
Teams relevance to the problem ?
How long you have been together ?
Ownership split ?
Do you understand what you need next in your team ?
Are you capable of learning and evolving ?

23. Business potential
• What is the actual business potential ?
• How much money do you need to reach the potential
– VC’s need >20M€ investments
• What are your customer aquisition costs vs. customer
lifetime value

24. Ask
•
•
•
•
What stage are you at ?
What are you going to achieve with the money ?
How long will money last – can you deliver in time ?
What is the long term financing plan ?

25. Areas to be covered
• Why startups fail ?
• What investors look at startups ?
• What kind of investors there are ?

26. Different kind of investors
•
•
•
•
•
•
Goverment
Family, Friends, Fools
Angel Investor
Industrial VC
VC
Stock market

27. Different investor profiles
•
•
•
•
Fools – nice hobby/I got rich
Industry agnostic
Industrial/Business investor
Spray and pray

28. Know your investor
•
•
•
•
What kind of exit strategy do they have ?
What is their investment perspective (really) ?
What kind of investments have they made ?
Can they make additional investments ?
– Investment period
– Cash available
• Who would be the manager responsible ?
– How many companies in portfolio

29. Active investors role
Find
Build
Exit
• Securing to be DD ready
• Product-market-fit development
• Creating sence of urgency and execution excellence
• Helping prioritisation and optimal market position
• Educating founders to be business managers and recruiting key personnel
• Funding
• Strategy development and build professional board
• Creating exit opportunities
• Finding and managing M&A partners
• Deal execution

30. Few tools

31. Validation board

32. The Petri Model Canvas
Paying Customer
Your Body text
Problem
Your Body text
XYZ Company
Unfair advantage
Your Body text
KPI’s
Your Body text
Early Buyers
Your Body text
Solution
Your Body text
Iteration #1
Market
Your Body text
Channels
Your Body text
Costs
Your Body text
04-Jan-2013
Unique Value
Proposition
Your Body text
Existing Alternatives
Your Body text
Customer Aqusition
Cost
Your Body text
Customer Lifetime value
Your Body text

33. Thank you !
Email: petri.lehmuskoski@gorillaventures.fi
Twitter: @Petrileh
www.gorillaventures.fi