Tudor Mafteianu, Founder & CEO of Blu Capital Partners on Techsylvania 2023 stage

1. What drives the value of
your business?
Why, when and how to
unlock it?
Tudor Mafteianu
CEO & Founder
Blu Capital Partners
Investment Banking Advisory

2. Founder (2016) – Getting screwed

3. Until 2019:
Investment Professional
Local & global Investment Firms
Private Equity, Debt & Venture
Deals from €1 to 200 millions
Tudor Mafteianu / Blu Capital Partners - Background
Since 2019:
Founder @Blu Capital Partners
M&A, Capital Raising Advisory €15 million avg. deal
+30 clients €5-100 million / deal
5 countries Starting from Series A
+€2 billion
deals
+500 firms
valued
Global
US, Europe
and Asia
3

4. Maximize your
position
Secure it. Be in
control
► Understand and leverage your
strengths
► Improve business KPIs in
anticipation for selling/raising
► Tell the right story to the right
audience
► Understand what impacts the
value of your business
► Be strategic in decision making
► Don’t make big mistakes
You want to maximize your position. You want to secure it. You want to be in control.
Why is the value of your business? It’s your score card for your work.
4

5. Reach and structure
Did you reach to all
relevant investors for you?
Did you propose a
transaction structure that
is appropriate?
Extrinsic Drivers
Valuations in public
markets
Impacting valuations in
private markets
Geopolitical events
Availability of capital
Intrinsic Drivers
Product/Service quality
Business size
Growth
Profitability
Management
Value Drivers and Their Influence on Your Business
Story-telling: The Equity Story
How do you present the
potential?
How do you present the
financials?
Extrinsic
Process
Intrinsic
 Market size →

6. How can value be realized / unlocked? 3 main routes
6
How is value realized? How are the investors am I dealing with?
Strategic
Private Public Equity (IPO)
Financial: Multiple of revenues, recurring revenues, profits, or business metrics
-> Enterprise Value - Net Financial Debt (Financial Debt - Cash)
- Operational: Multiple of users, clients, etc.
Valuation Methodologies (Simplified)
- At IPO level or pre-IPO
round (private placement)
- Institutional, retail, family
offices, etc.
Debt
- Banks: local,
regional, intl.
- Alternative debt:
Private, Mezzanine,
Venture Debt Funds
Equity
- Accelerators / VC
funds / family
offices: Pre-Seed,
Series A, Series B…
- Growth equity /
private equity
- Corporate – direct interest
- Minority stakes, either
from their own funds or
from a CVC
- OR majority stake up to
100% depending on their
strategy, culture, practice
Financial

7. Idea #1 – Invested volumes are down in 2023, dry powder is getting scarcer
7
Source: Atomico (powered by Dealroom.co and Crunchbase)

8. Idea #1 – Invested volumes are down in 2023, dry powder is getting scarcer
8
Source: Atomico (powered by Dealroom.co and Crunchbase)

9. Idea #1 – Invested volumes are down in 2023, dry powder is getting scarcer
9
Source: Pitchbook

10. Idea #1 – Invested volumes are down in 2023, dry powder is getting scarcer
10
Source: Pitchbook
Potential solutions to consider
Equity Capital
If raise now:
Go global
Tranche it
Debt Capital
Bank Debt
Venture Debt
Revenue-Based
Subsidies
/
Client Financing
Joint Ventures Digital Twin
Carve Out
Build Operate Transfer
(BOT)
Spin-off Exit

11. Idea #2 – don’t waste opportunity when momentum is right
11
Source: Pitchbook

12. Problem #3 – Rush into a deal, get key commercial terms wrong
12
Source: Pitchbook
M&A
• Optimize for upfront or
total value (deferred
payment, earn-outs, etc.)
• If you sell majority, always
negotiate call/put option
• If you don’t have long-
standing management,
ensure transition
Equity
• Make sure you only raise if
you need and when you
need at the right value
• Make sure liquidation
preference is within
reasonable limits
• Keep clauses in shareholder
agreement open for next
investors
Debt
• Repayment terms, early
repayments
• Refinancing conditions
• Covenants which lender
can execute on

13. Example – M&A with strategic buyer – software development services firms
13
Company 1 Company 2 Company 3
Price Multiple of EBITDA 5x 9x 12x
EBITDA 0,5 million EUR 3 million EUR 16 million EUR
Company Value 2.5 million EUR 27 million EUR 192 million EUR
Intrinsic value
driver
Intrinsic sub-driver Company 1 Company 2 Company 3
Market size In billion EUR 2 10 100
Size
Revenue 5 million EUR 20 million EUR 80 million EUR
FTEs 100 300 1.000
Productivity
Revenues/FTE € 50.000 € 66.667 € 80.000
Billability 65% 75% 80%
Growth For the past 5
years
20% 30% 40%
Profit margin % of revenues 10% 15% 20%
Conclusion Fundamentals Weak Medium Strong

14. Example – M&A with strategic buyer – How to increase the value by 4x?
14
Company 1 - now Company 1 - 2 years later
Sold for Multiple of EBITDA 5x 8x
EBITDA € 500.000 € 1.200.000
Enterprise Value € 2.500.000 € 9.600.000
x 4.0 since 2 years ago
Intrinsic value driver Intrinsic sub-driver Company 1 - now Company 1 – 2 years later
Size
Revenue 5 million EUR 8 million EUR
FTEs 100 100
Productivity
Revenues/FTE € 50.000 € 80.000
Billability 65% 75%
Growth For the past 5 years 20% 30%
Profit margin % of revenues 10% 15%
Quality of earnings Client diversification (Top 5) 100% of revenues 60% of revenues
Quality of services
Length of the client tenure 3 years 4 years
NPS Not calculating it 75%, at industry average
Churn rate 30% 20%
Conclusion Fundamentals Weak Medium

15. Example – M&A with strategic buyer – How to increase the value by 4x?
15
Company 1 - now Company 1 - 2 years later
Quality of earnings
Client div. (top #5) 100% of revenues 60% of revenues
Client industries No specialization Some specialization
Client contracts 2 clients (60%) -partner (no
control)
Open book contracts.
Renewable annually
90% clients directly with the
end-client. Competitive day
rate.
1.5 year contracts.
Normalization of earnings Founder costs reveal ->
reported profitability not
sustainable
Some founder costs but not
many, EBITDA accurate to 95%
Quality of services
Length client tenure 3 years 4 years
Net Promoter Score (NPS) Not calculating it 75%, at industry average
Churn rate 30% 20%
Quality of marketing
Website and marketing
materials
Website in local language, no
apparent international
experience, clients not
featured, team featured
partially
Modern website with good
look and feel, and case studies,
entire team featured showing
a strong culture
Conclusion Fundamentals Weak Medium

16. Back to value drivers – intrinsic, extrinsic, and process
16
Category Value Driver It impacts Considerations / Can I influence?
Intrinsic
Product & service Your financials and KPIs Great service / product. Build a clear roadmap. Improve service.
Client base Your financials and KPIs Global from day 1. Traction in 2 international countries or the US
Management Your financials and KPIs
Recruit senior. Compensate them above average. Include LTIP / ESOP.
Exceptional CEO & CTO. 3 (7) A-level VPs at Series A (B).
Operations Your financials and KPIs Strive for op. excellence. Repeatable, replicable processes.
Better KPIs The Valuation Growth -> profitability -> valuation. 1 million ARR. 2-5x YoY growth.
Unit Econmics The Valuation Track, analyze. At Seed - early proof. Series A and B - 100% proven.
Shareholding
Alignment of interests
Transaction complexity
+management: +80% at pre-seed, +60% at Series A, +40% at Series B
Extrinsic
Investor sentiment Multiples Can you time the market? Not really, but you can try :)
Geopolitical events Capital supply, value Risk mitigation plan in case of disruptions from geopolitical events.
Availability of
capital
Capital supply Change HQ to location with high supply. Get investors there.
Process
Reach to investors Maximize value Reach out correctly, to the right investor group and at the right time.
Transaction
structure
Certainty Stress-test your transaction structure to be in market standards.
Story-telling Maximize value The story-telling is more than just a story. It's a an equity story.

17. Example #2 - Equity raising from VC
17
Source: Inovo

18. What does a good process mean?
18
Good
Decisions
Strong advisors
on the deal
Investor
relationships
Clear
equity
story
Tight project
management
+High quality deck,
operational &
financial model

19. Why work with an advisor?
1
9
Blu Capital Partners
A network of +15,000 investors
Up to 2x faster than other advisors
1 Week to the first introduction
Working with a strong
advisor
Certainty
Maximize valuation
Relationships with
investors
A strong investment banking
advisor has:
Understanding of your sector
Industry Intelligence
Relationships with your relevant
investor audience

20. Thank you! Let’s talk!
Tudor Mafteianu
Managing Director
tudor.mafteianu@blucp.com
Read more: www.blucp.com
See you at BCP’s booth!
(near the entrance)