funding and ecosystems for startups
TRANSCRIPT
FUNDING- AND ECO-SYSTEMS FOR START-UPS (ICT)
JAN VORSTERMANSMANAGING PARTNER
VENTUREWISE
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BACKGROUND: LIFE SO FAR General
o Born 25 March 1960o M.Sc. Telecom Engineering from Ghent University
Careero 1984 – 1989: R&D at Ghent University at Siemens (Nokia)o 1988 – 1994: Business unit management and business development at Telindus (Proximus)
and Nynex (Verizon)o 1994 – 2002: Operational, commercial and general management at BT Globalo 2003 – 2013: COO Telenet
Founder Qunova and Qunova Projects Co-founder VentureWise Founding Partner Volta Investor in Limecraft, Kinetura, Viloc, Moovly, Steampunk Wizards, Rabt, Skelia, Valle
Verde Non-Executive Director Invitel and Option, ex-board member iMinds
HAVE STARTUP STOP NEED MONEY STOP PLEASE HELP STOP
THE PROBABILITY OF START-UP SUCCESS IS LOW, WE NEED PROGRAMS THAT ENHANCE PROBABILITY OF SUCCESS Many start-ups, many with similar ideas and great teams Starting up is hard, 60 % of tech start-ups don’t survive (4 year horizon) It is OK to fail (early) Success = having a growing profitable business 1 / 40 000 become unicorn
No market needOut of cash
TeamOutcompeted
Pricing/cost
40%29%
23%19%18%
Top reasons for failure:
77% product/market fit
29% burn rate
SUCCESSFUL ENTREPRENEURS ARE MOST OF THE TIME NOT UNIVERSITY DROP-OUTS
Choose a job you like, and you will never have to work a day in your life (Confucius)
40Average age when they started their business
1%Come from rich or poor backgrounds
75%
75%
Worked as employees in other companies for more than 6 years
Ranked in top 30% at school and university
60%Started own business because standard work environments did not appeal to them
ARE WE SELECTING THE RIGHT START-UPS FOR INCUBATION AND ACCELERATION?
Choose a problem that agitates the crap out of
you
Make sure you are the right person to solve the
problem
Find the team with which you want to go to war
Define your strategy and funding requirements
Bootstrap the business as long as
possible
DO WE ALWAYS NEED TO PUSH FOR EXTERNAL (RISK) INVESTMENT?
Investors do not grow on treesGrowth & comfort don’t co-exist
People matterExternal funding means validation and valuation
… and risk/reward sharing
AmbitionBusiness Market Risk
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THE NATURE OF EARLY INVESTMENTS IS CHANGING, THIS REQUIRES EVEN MORE GUIDANCE
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WHERE CAN WE FIND CAPITAL IN THE EARLY STAGES OF DEVELOPMENT
BootstrappingFF&F
GovernmentBusiness AngelsIncubatorsCorporate FundsVC
Inception
+++++++++
+++------
Product/MarketFit+++
+++++
----
Scale-up
---
+/-+/-+/-
Crowdfunding ++ ++ -
+/-+/-
Funding Gap
Promising
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HELP THE START-UPS TO RAISE CAPITAL FROM PROFESSIONAL INVESTORS: TEACH
1. Be honest (to yourself)2. Know the business and …3. … the market (data, competition,
business models, benchmarks)4. Have a plan, no window dressing5. Identify/know potential investors6. Get an introduction, find allies7. Investors are extremely busy8. This is a sales job,9. No does not mean out10.First pitch to investors who are likely
to be negative
Ensure VCs (that invest early) are part of your eco-system
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BE CAREFUL WHAT YOU TEACH. THERE IS DATA, AND THEN THERE IS MORE DATAThe Entrepreneur Thinks:
The Presentations Says:
The Investor Thinks:
Everybody will want to buy our product
Our projections are conservative
We will have to take significant haircuts
This product version is really good
The product is ready This product will have to be reworked
The market is really big Our market will be 50 billion in 2017
They don’t know where the market is
I hope nobody knows the competition
There is no competition in this space
They don’t know the competition
Our technology is complex Our solution cannot be copied
(Almost) Everything can be copied
A few investors expressed an interest
We have many investors lined up
We are the first investor they speak to
I like our team We have a proven management team
I see limited experience
This person at the Fortune 50 company said they would sign
We will soon sign-up a Fortune 50 company
In your dreams
We are just to clever and agile compared to large companies
The large companies are too slow/dumb
Ever been eye to eye with an elephant?
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CROWDFUNDING AS ALTERNATIVE?
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KEY TRENDS IN CROWDFUNDING
Everybody can be an entre-preneur
• European markets are underdeveloped• Regulation is key to success• Crowdfunding is mainly a local activity• Crowdfunding is hard: 70-80% of cam-
paigns fail (US)• Global crowdfunding is growing 100%
yoyBELGIUM Rewards Equity
Amounts Raised 10-25 k€ 150-250
k€
Average Investment 85 € 700 €
Average Duration
30-45 days
45-60 days
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ENTREPRENEUR.
FLANDERS INNOVATION ECO-SYSTEM
FLANDERS INNOVATION ECOSYSTEM
Micro-electronicsCleanTech
ICTBio-tech
5 University Partners
Government
Corporate Partners
iMINDS: FLANDERS’ ICT RESEARCH AND ENTREPRENEURSHIP HUB
DIGITAL RESEARC
H
BUSINESS INCUBATIO
N
Strategic research
Applied research
Spin-offs
Global expansionfor tech businesses
Start-up supportfor entrepreneurs
Living lab research
European research projects
iMINDS SUPPORTING TECH BUSINESSES
iDiscover Business Opportuni-
ties
iBootDraft Business Proposition
iStartLaunch Start-up Company
Go GlobalGrow Com-
pany
INCUBATION
START-UPSfrom incubation program
120+
PROJECTSWit the industry
PROJECT PARTNERS
380+ 1100+
PUBLICATIONSYearly
RESEARCHERS
1000+ 850+
R&D PROJECTS
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BELGIUM: START-UP COMMUNITIES
5 years5 000 start-ups100 000 jobs
VENTUREWISE: A GROWTH ECO-SYSTEM FOR ICT START-UPS
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VENTUREWISE ?A balanced team strongly embedded in the Tech Eco-system
Jan VorstermansCorporate & ManagementTechB2BInternationalInvestor
Brendon GrunewaldEntrepreneur & Start-upM&AB2CInternationalFund Management
Bart BecksCorporate & ManagementEntrepreneur & Start-upInternational marketingB2CTech
Kenny WillemsIncubation/AccelerationOrganization/ProcessCFOB2BInnovation
Digital Media
IoT
Enterprise Software
Market Places
The most connected “Godfathers”
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FINANCING GAP BETWEEN INCUBATION/SEED AND LATER STAGE FUNDING IN EUROPE
Incubate Seed Later StageScale-up
Limited funding options in the scale-up phaseStart-ups need more than money
IncubatorsAcceleratorsGovernment
AngelsCrowd
PEVC
Corporates
(50-100k€) (100k-500k€) (500-2mio€) (+1mio€)
Consequences: Startups move very early to US Promising startups fold or are overrun due to insufficient funding Startups pivot to service-orientated companies
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VENTUREWISE ?
Fund Zero Fund 1 Studios Enterprise
Digital Media
IoT
Enterprise Software
Market Places
ECO-SYSTEM
ResourcesSkeilaInThePocketDreams & CreationGrowthGurus
IncubatorsiMindsBetaCoWorkRocketInternetAtelier
Special ServicesCrescoAngel.meBootstrapLabs
Corporates
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VENTUREWISE AS INVESTOR - KEY DIFFERENTIATORS
Our growth Ecosystem
• Partnerships with high-quality resource & service providers, working at favorable fees
• Equity for resources
Our investment strategy
• Early Stage: both Seed (100-500k €) and Scale-up (up to 1,5mio€)
• “Spray, not Pray”• Capital efficient deals• Data-driven decision-making for investments
Our team • Entrepreneurs for Entrepreneurs• Extensive expertise & network in the selected focus areas
“Hot” focus areas• Correspond with current breakthrough trends in Tech• Significant follow-up investment opportunities• Good exit potential (M&A)
Geographical reach
• Know-how of and access to various EU-countries (beyond BeNeLux)
• Scaling partners in USA & South-East AsiaFund kickstart • Integration of existing portfolio of investments (“fund 0”)
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VENTUREWISE – ANGEL.ME (CROWDFUNDING) PARTNERSHIP With VentureWise:
Advice and hands-on support Access to the eco-system Direct Investment from 100K – 2 Mio
Too early? Crowdfunding via Angel,me Combines rewards + equity Proprietary technology International partner network Guidance and networking (angel.me sessions and summit) Supporting platform partners: lower fees, more support
TO CONCLUDE
THE FINAL FRONTIER
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THE VALUE OF LARGER ECO-SYSTEMS HAS BEEN DEMONSTRATED
HOW?
The Rules from FastCompany#1 Don't Be a Chihuahua#2 Don't try to take more than your
fair share of the pie#3 If you're invited to a wedding,
don't outshine the bride or groom#4 Don't Be a Two-Timer#5 Give to Get#6 Be like Fonzie#7 Don't be a douche bag
My 5 rules for (tech) eco-systems:
1. The power of the ecosystem = N!2. An eco-system requires energy to sur-
vive3. Successful business models get copied4. Cooperation, win/win, open data5. From R&D to customer involvement