kic innoenergy master school - session on venture capital funding
DESCRIPTION
Session on Start-up funding alternatives, venture capital and pitching to VC'sTRANSCRIPT
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Sociedade de Capital de Risco, SA
KIC Innoenergy Master School UCP Lisbon/ IST
Lisbon, 20 October 2014
Sociedade de Capital de Risco, SA
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Financing
Needs
FFF / Microcredit
TTA
Business Angels
Venture Capital
Bank Debt
Public Funding Programs (ex. H2020)
Customers
Sources of Funding
+
+ -
-
Stage of Development
( + Risk - )
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Pre-seed/ Accelleration
Seed Series B
• Idea phase
• IP development
• “Alpha”/MVP launch
…
• “Beta” release
• Product/market fit
• Initial traction
• Incorporation
• Monetization
• Formalization • Internationalization
• Traction “ramp-up”
• Growth / scaling
• Globalization
• Consolidadation
Characterisitics
The Early Stage Investment Funding Process
Risk / Mortality Rate
Extreme / >95% Very high (70%-90%) Very High (50%-70%) High (30%-50%)
Start-up (Series A)
Investors
• TTA / Incubator’s
• Government/University funding
• Idea/BP competition
• Personal funds
• Angel investors
• FFF
• Micro VC’s
• Personal funds
• Super Angels • VCs
• VC’s • Hedge Funds
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Essential Characteristics
• Sizeable
• Proprietary
• Scalable
• Traction
• Team
• Skin
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10 things to keep in mind
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Sociedade de Capital de Risco, SA
1. VC’s invest in businesses…
…not ideas
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Sociedade de Capital de Risco, SA
2. K.I.S.S.
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Sociedade de Capital de Risco, SA
3. Focus
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Sociedade de Capital de Risco, SA
4. There is no such thing as a perfect pitch
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Sociedade de Capital de Risco, SA
5. You are only as good as your last milestone
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Sociedade de Capital de Risco, SA
6. Prospective financials make for great story telling…
…but not much else
“In a startup, no business plan survives first contact with customers.”
Steve Blank
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Sociedade de Capital de Risco, SA
7. Traditional valuation metrics (NPV, IRR…) are of little value
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Sociedade de Capital de Risco, SA
8.
PRICE VALUE
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Sociedade de Capital de Risco, SA
9. Smart Money =
SMARTS + MONEY
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Sociedade de Capital de Risco, SA
10. Credibility is EVERYTHING!