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Volta Ventures
SEED & EARLY STAGEVENTURE CAPITAL FORINTERNET & SOFTWARE
COMPANIES IN THE BENELUX
[email protected]@frankmaene
About me
• Volta Ventures
• Hummingbird Ventures
Big Bang Ventures
• Helping Silicon Valley cies.
expand into EU
• Enterprise software
• Economics degree
Why funding…
Investment to fuel growth
• Finance fast(er) growth
• Team hires
• International expansion
Investment to fuel growth
Investor for his added value
• Sounding board / Coach / Mentor
• Networking
• Recruiting
• Strategy
• Assistant to the CEO
Do you really want/need a VC?
It’s personal, very personal
• Involvement?
• Style?
• Domain
• Expertise?
• Motivation?
How does a VC fund work?
VC
FUND
LP HNWI
LP Institutional
GP Managers
STARTUP
STARTUP
STARTUP
(Ad)Venture Capital?
5-6/10
3-4/10
1-2/10
deals will loose ± all the money
deals will return ± 1x the money
deals will work out and return 2-10x
early stage VC’s have to seek deals with 10x potential
... hopefully resulting in returning the fund + 10% IRR
With a VCComes…
Do you really want a VC?
• Growth is the main focus
• It’s not just you anymore• Team
• Board
• It comes with a contract, a.k.a. shareholders agreement
• Exit ultimate goal (3-7 years)
• Cash
• Exploit an opportunity fast
• Stay ahead of competition
• Advise, Network, Time
Why choose a VC ?
100% x $ 1M
or
1% x $ 1B
Why should a VC choose
YOU ?
It’s for you if
‘I lead but I seek input’
‘I want to get big fast’
‘Binary outcome = ok’
‘I want to conquer the world’
‘I’m the boss, till the end’
‘I’m not in a hurry’
‘ Let’s grow slowly&safely’
‘I want to be big in Belgium’
But not if
OK, you’ve decided to go VC
Now What?
Odds < 5%
50 mandays = min
How to pick an investor?
• Right Region / Sector / Stage
• Startup experience
• Personal fit
• Complementary / Value add
What do we need to know?
• Market and size
• Issues with current products
• Your product
• Competition and benefits
• Revenue and Go To Market model
• Team and execution
• 12-18 month runway
Issues with European Start-Ups
• Long on technology, short on marketing– A good product does NOT sell itself
• Little experience with business plans, pitching to VC’s
• Not convinced of need for A-team
• Not very clear on positioning, target customers and value proposition
• Long on figures, short on vision/dream
• Full of themselves, not interested in competition
Turn offs
• “Sign an NDA or I tell you nothing”
• “Our numbers are very conservative”
• “There is no competition”
• “The Americans don’t get Europe”
• “We’re just back from a very good –first- meeting with Microsoft/FB/Cisco …”
• “We provide real service”
• “We’re committed to our customers”
• “A Big 5 did our financial plan, so it must be right”
Risk Assessment Criteria
ADDRESSABLE MARKET
COMPETITIVE POSITIONING
PROSPECTS
REVENUE
PARTNERS
MARKET STAGE / TIMING
COMMERCIAL RISK
COMPLEXITY
STATUS
FOUNDERS
TIMING
FEATURE CREEP
MARKET FEADBACK
TECHNOLOGY RISK
INTERNATIONAL EXPERIENCE
START-UP EXPERIENCE
COMPLETE SKILL COVERAGE
HIRING
OPERATIONS DELIVERY
MANAGEMENT RISK
INVESTMENT
RUNWAY
SYNDICATION
CONTROL
NEXT ROUND
OUR STAKE
FINANCIAL RISK
How to PITCH to an
investor?
Investor ≠ Customer
Company ≠ Product
How to get to term sheet
• Focus
• You are selling
• Don’t ‘calculate’ valuation
• Don’t give an agenda
• Solicit competitive offers
• Get a lead investor
• Advisors?
@frankmaene
It’s a processLEAD
BP SENT
INITIAL MEETING
RADAR
FIRST DUE DILIGENCE
NEGOTIATION
LOI
DUE DILIGENCE
LEGAL
CLOSE
• No magic formula
• Stage / Team / TAM
• Comparables
• Competition
• Runway
• Other terms
Valuation?
Evaluateyour options
Best when…
Services, consulting, apps
Graduates/ Students
Get to MVP
Get to MVP
Fast growth
Devices, IoT
Collateral
Research, Patents
VC has a big impact
Made in Europe
Source: NVCA
Respect
