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This presentation was made for StartSmart event about angel investing and angels perspective to the investment target (ie. startup).
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StartSmart !
Petri LehmuskoskiCo-Founder – Gorilla Ventures Oy@Petrileh
>85 %<10 %
• Petri Lehmuskoski, portfolio entrepreneur– Toptronics 1983 (exit 2005)– Topsoft 1985– Turun Tietokeskus 1989– Diggibag AB 2000 (exit 2005)– Gorilla Ventures 2012
• Education– Business College 1989– eMBA (partially) 2004-2005– Harvard Business School 2010
• Experience– Building turnover from 0€ to 120M€– Managing organization from 1 person to 180 persons– Expanding operations from 1 country to 7 countries– Running multiple companies simultaniously– Largest singel deal 14M€– Three time hours away from bankruptcy
• Startup relevance– First ”angel” investment in 1988– Seen x.xxx pitches– Analyzed 1.000+ startups– Invested in 30+ companies– Active in operational level in 6 startups
My mission: ”I am going to help 30 succesfull companies to be formed
every year”
• Why startups fail ?• What investors look at startups ?• What kind of investors there are ?
Areas to be covered
• Idea/Invention=> Hallucination=> Externally shared vision=> Business validation=> Innovation
There are no shortcuts to success !
And money can distract you…
Startups five stages
• Loads of learning– Product thingking– Customer development– Business model development– Team development– Different KPI’s (old metrics become vanity metrics)– Administration
• And financing
Each stage requires
Before you can run, you need to learn to crawl !
Problem
Solution
Competition
Market
Theory
Problem
Solution
Competition
Market
Reality
Competition1. Do nothing2. Other way to solve the
problem3. Do ourselves4. Direct competition
”The difference between the winning startups and those who lose is that the winners understand why customers buy.The losers never do.”Steven Blank
• Why startups fail ?• What investors look at startups ?• What kind of investors there are ?
Areas to be covered
Problem• Whose problem is it ?
– Users or customers ?• How many customers in major markets have the problem ?• Are there other ways to solve the problem ?• Has the problem been validated ?
Different worlds, different things
Corporation- Execution- ”Good sales person”
Start-up- Product/Market Fit- Can it work in theory ?
Added value• How big is the pain ?• How much money is involved if problem solved ?• What are drawbacks (solving the problem) ?• Do you meet one of the three ”must have conditions in value
added ?
3 ”must-have” conditions (G Moore, Crossing the Chasm,
pg 102-103)
• It enables a previously unavailable strategic capability that provides a dramatic competitive advantage in an area of prime operational focus
• It radically improves productivity on an already well-understood critical success factor
• It visibly, verifiably, and significantly reduces current total overall operating costs
Solution• Is you solution scalable in all areas– Technology, logistics, sales, team etc.
• Is the solution solving the real problem• What does the solution need to be
implemented ?• What does the execution require from team
Team• Do you have a team ?• How experienced is your team ?• Teams relevance to the problem ?• How long you have been together ?• Ownership split ?• Do you understand what you need next in your team ?• Are you capable of learning and evolving ?
Business potential• What is the actual business potential ?• How much money do you need to reach the potential
– VC’s need >20M€ investments• What are your customer aquisition costs vs. customer
lifetime value
Ask• What stage are you at ?• What are you going to achieve with the money ?• How long will money last – can you deliver in time ?• What is the long term financing plan ?
• Why startups fail ?• What investors look at startups ?• What kind of investors there are ?
Areas to be covered
Different kind of investors• Goverment • Family, Friends, Fools• Angel Investor• Industrial VC• VC• Stock market
Different investor profiles• Fools – nice hobby/I got rich• Industry agnostic• Industrial/Business investor• Spray and pray
Know your investor• What kind of exit strategy do they have ?• What is their investment perspective (really) ?• What kind of investments have they made ?• Can they make additional investments ?
– Investment period– Cash available
• Who would be the manager responsible ?– How many companies in portfolio
Active investors role
Find
• Securing to be DD ready• Product-market-fit development• Creating sence of urgency and execution excellence
Build
• Helping prioritisation and optimal market position• Educating founders to be business managers and recruiting key personnel• Funding• Strategy development and build professional board
Exit
• Creating exit opportunities• Finding and managing M&A partners• Deal execution
Few tools
Validation board
Customer Aqusition CostYour Body text
Early BuyersYour Body text
Paying CustomerYour Body text
CostsYour Body text
Customer Lifetime valueYour Body text
ProblemYour Body text
ChannelsYour Body text
KPI’sYour Body text
SolutionYour Body text
Unfair advantageYour Body text
MarketYour Body text
Existing AlternativesYour Body text
Unique Value PropositionYour Body text
The Petri Model Canvas XYZ Company04-Jan-2013
Iteration #1
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Thank you !Email: [email protected]: @Petrilehwww.gorillaventures.fi
