Speaking at pirates on shore event in Riga (Latvia) to young founders and entrepreneurs about the changing world of venture capitalists regarding unicorns, high valuation, IPO metrics and how to be motivated to start own company by Thomas Grota T-Ventures Deutsche Telekom Group

1. 1
Startup
Galore
…
…
How
VCs
think
in
a
Unicorn
World.
Thomas
Grota,
Investment
Director
T-­‐Venture
(Deutsche
Telekom)
@thomasgr
Blog:
thomasgr.tumblr.com
Pirates on Shore 2015

2. My
current
porKolio
and
areas
of
VC
experNse:
Mobile
Internet,
Big
Data
&
Cloud
based
PlaKorms
Thomas Grota – Investment Director T-Venture Holding GmbH – @thomasgr
E
X
I
T
S

3. T-­‐Venture’s
PorKolio
of
100co’s
3 Unicorns & 5 IPOs
$1B+ in Value
20+ Centaurs
$100m+ in Value
40+ of Little Ponies
$10m+ in Value

4. 4
So..
How
can
I
become
successful
in
Fundraising?

5. 5
Learn
to
understand
how
Investors
THINK
about
YOU!

6. 6
Like
Startups
–
VCs
are
risking
to
burn
$$$
of
LPs

7. 55%
of
US
venture
capital
investments
are
wriaen
off

8.
62%
of
EU
investments
are
wriaen
off

9. 9
But
the
Market
has
changed
–
and
so
did
VCs.

10. 2/9/15 10
4.000.000 €
400,000 €
40,000 €
4,000 €
1995 2005 2010 2014
Costs needed to start an IT based company
Technology
Drivers
Open
Source
Cloud +
AWS
Developers
Start Companies
==========
99% cost reduction
Entrepreneurs
need
less
capital
to
start
a
company
Thanks
to
cloud,
viral
markeNng
via
social
&
easy
payment.

11. 441
119
75 86
2000 2005 2010 2012
#
of
acNve
U.S.
VCs
declined,
But
BIG
funds
raised.
…
low
number
leads
to
dominant
VCs
seeking
Unicorn
investments.

12. 2/9/15 12
Previous Tech Cycle
Current market cap:
$139B+ $173B+ $347B+
$33B+
$30B+
$206B+ $212B+
New Tech Cycle
Market Capitalization at IPO ($B)
So
private
investors
capturing
more
value
in
early
stage
companies,
encouraging
greater
pre-­‐IPO
funding
while
capturing
own
pro-­‐rata.
*)
Data
from
Q1
2015.

13. 13
This
looks
promising
!
–
So
let’s
start
a
business…

14. 2/9/15 14
Public
listed
startups
are
significantly
more
mature
than
in
the
past
IF
Pre-­‐IPO
stage
is
reached
-­‐
the
investments
are
secured
for
longer
IPO in '00 IPO in '13
3.1 7.4
Years to IPO
(from first financing)
IPO in '00-'01 IPO in '13-'14
$35 $102
Revenue ($mn)
IPO in '00-'01 IPO in '13-'14
13.3 5.3
Valuation/Revenue
Multiple
More
Time
More
Revenue
Smaller
MulNple,
but
more
Return

15. Late
stage
private
financing
produces
loky
valuaNons.
When a concept works the competition is fierce.
2/9/15
15
Seed
Stage
Early
Stage
Later
Stage
Larger
Later
stage
rounds
aker
validaNon
More
seed
rounds
as
costs
decline
&
sources
of
capital
increase
TradiNonal
VC
Today’s
VC
ValuaNon
Beaer
equity
posiNon
for
early
stage
investors
and
founders
compeNNve
areas
(Big
funds
needed)

16. 2/9/15 16
Thus late stage valuations have risen the fastest in 4years!
That competition based trend must be watched very carefully…
184%
235%
Source:
Q2
20014
PitchBook
US
Venture
Industry
Data
Sheet.
As
of
Q1
2014

17. 17
Consider:
Early
Exit:
lower
price,
big
stake
vs.
Late
Exit:
higher
price,
small
stake
Not
everyone
will
reach
the
BIG
EXIT
…
Buyers
are
looking
for
the
Big
Deal!

18. To be successful offer great Value to Customers
18
To
be
successful
offer
great
VALUE
to
Customers

19. 19
You
are
THE
hardest
compeNtor
….
or
THE
best
fit

20. 20
you
close
an
innovaNon
gap
for
a
market
leader

21. Snowden gave as the Opportunity to Become Big in Security
21There
is
the
Opportunity
to
Become
Big
in
SECURITY…

22. 22
However
the
focus
is
outside
Europe
for
the
future
!
The
App
Economy
is
Growing
much
Faster
outside
EU28
Revenues
from
apps
and
app
related
products
&
services,
EU28
vs.
Rest
of
World,
2014

23. Seek smart partnerships for reach and trust
23
Seek
smart
partnerships
for
reach
and
trust

24. 24
QuesNons?

25. 25
Always
ask
for
advice
-­‐
not
for
money.
(money
will
come
if
advisor
is
interested)

26. 26
ENJOY
THE
RIDE
BEING
AN
ENTREPRENEUR!
...

27. 27
….
but
find
the
right
Balance
in
life
–
Have
FUN!