The Case for Seeding Europe from #StartupTurkey 2014

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The Case for Seeding Europe from #StartupTurkey 2014

  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
  7. LARGE FUND THESIS ARE BASED ON $5M+ FIRST ROUND … and pre-date
  8. LIMITED BIG DEALS + LIMITED EXITS = MOST REGIONAL FUNDS TOO BIG TO PROVIDE GOOD RETURNS
  9. YESTERDAY’S SEED IS TODAY’S SERIES A/B
  10. YESTERDAY’S IPOs ARE TODAY’S ACQUIHIRES
  11. SOURCE: STEVE BLANK
  12. MEDIAN EXIT = $20M SOURCE: SEED DB
  13. MINIMUM ACCEPTABLE VC RETURN 20% IRR OR 6X ON CASH $300M FUND = $1.8B
  14. MODEL BROKEN EVEN IN SILICON VALLEY TOP QUARTILE = 2.1X
  15. SOURCE: STEVE BLANK
  16. DO YOU FEEL LUCKY?
  17. WELL DO YOU, PUNK?
  18. EUROPE PRODUCES HIGHER MULTIPLES THAN U.S.
  19. EXIT ARE 25% SMALLER, BUT… ENTRY VALUATIONS ARE 3-4X LOWER
  20. EUROPE PRODUCES 50% AS MANY EXITS AS U.S. AND 1/3 OF $100M+ EXITS WITH ONLY 20% OF U.S. VC
  21. MEDIAN CASH-ON-CASH $100M+ EXIT MULTIPLE 4.5X US 2005-2011 SOURCE: EARLYBIRD, DOW JONES VENTURE SOURCE 7.2X EUROPE
  22. REPEAT ENTREPRENEURS IN VC FUNDED COMPANIES 50% NEW 93% NEW 50% REPEAT 7% REPEAT 1998 2007 SOURCE: EARLYBIRD GLOBAL ENTREPRENEURSHIP REPORT
  23. NUMBER OF LATENT EUROPEAN ENTREPRENEURS GROWING 9.0% 8.5% 2012 7.4% 2006 5.2% 4.5% 2000 SOURCE: EARLYBIRD GLOBAL ENTREPRENEURSHIP REPORT
  24. DEAL FLOW GROWING 12% CAGR
  25. BLACKJACK
  26. SPLIT DOUBLE DOWN MULTIPLE INVESTMENTS IN THE SAME THEME INCREASE OWNERSHIP % AS RISK IS REMOVED
  27. 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)
  28. CASH-ON-CASH EXIT MATH $30M 5.25X $50M $100M 8.75X 17.5X
  29. TYPICAL FUND NEEDS AT LEAST TWO 30X EXITS OUT OF 10-20 INVESTMENTS “BLACKJACK” FUND HAS 10X MORE CHANCES
  30. @vitalyg
  31. “BLACKJACK” SEED FUND FOR EUROPE LAUNCHING IN 2014 @vitalyg
  32. “I SKATE TO WHERE THE PUCK IS GOING TO BE, NOT WHERE IT HAS BEEN.” ! WAYNE GRETZKY
  33. want the slides? follow @vitalyg

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