July 31st, 2013

   

„Summer  School  2013  Newsgames  “    

at  RTL  Journalistenschule  

July 31st, 2013

   

“The  myths  and  reality  of  star@ng  companies”  

Table of Contents

I.  About Robert C. Bush Jr.

II.  Who is curtis newton?

III.  The Financial Logic of Starting a Company

IV.  The Myth of Starting a Company

V.  Strategy of Venture Capital Companies

VI.  Pitching Mistakes

•  CFO at curtis newton gmbh, Cologne (Germany) •  Founding principal of Majlis Partners, a merchant advisory firm based in Dubai,

United Arab Emirates. Serves as a key advisor to governments, institutions, and family businesses on foreign direct investment, asset management, and corporate governance.

•  More than 20 years of professional services experience in investment banking and alternative investment management, including Islamic Finance.

•  Former Managing Director of Istithmar PJSC, a private equity and alternative investment firm with $10 billion AUM, established in 2003 by HH. Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai and Vice President of the UAE.

•  At the start of his career in 1989, Mr. Bush practiced mergers and acquisitions and merchant banking at Merrill Lynch. 

•  Bachelor‘s degree in philosophy from Amherst College, Amherst MA, USA. •  Master’s program at Paul H. Nitze School of Advanced International Studies, The

Johns Hopkins University. Studied international economics with a regional focus on Africa and the Middle East. Recipient of a Frank Savage Fellowship.

•  Juris Doctor degree, The University Of Virginia School Of Law

I. About Dr. Robert C. Bush Jr.

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LinkedIn profile http://de.linkedin.com/pub/robert-c-bob-bush-jr/70/33/a58  

•  As a driving force behind numerous startups since 2005, and the developer of new, digital innovations, curtis newton embodies the successful fusion of idea-makers with a skilled team.

•  Our passion lies in introducing new brands, conquering new markets and helping shape the digital future – and our network accelerates our progress.

•  curtis newton is active in the following industries: Digital Innovation, Social Media, Social News, Social Search, Pioneering digital projects, Travel Industry, Publishing Industry

Portfolio (selection) +itravel

I. Who is curtis newton?

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Social News Aggregator www.virato.de  

Social News Analytics Tool www.virato-analytics.de  

Twitter Topics Analytics Tool http://app.socialtopicgraph.com  

itravel Individual Travel GmbH www.itravel.de  

How many years do you need to work? Owner Small Business Employee

III. The Financial Logic of Starting a Company

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•  Built over three years •  Generating profit € 100k/year

•  40% taxes à € 60k/year •  Sold at 10* earnings à € 600k

Gross salary € 100k Taxes 45% Savings 33% Savings/year € 18,150 Years 33.1 Net € 600k

1.  Need big original ideas 2. Entrepreneurs are born 3. You have to be first 4. You need lots of € 5. Do something you love and the € will follow 6. You need to take big risks 7.  You have to be young to start a company

IV. The Myth of Starting a Company

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“Everybody has a plan until they get punched in the mouth.” Mike Tyson

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Myths 1. Need big original ideas 2. Entrepreneurs are born 3. You have to be first

IV. Starting a Company – Myths vs. Reality (1/2)

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Reality 1. Usually small ideas in proven markets work better

•  90% new business fail (10% product/80% lack of market) •  70-90% of ideas come from previous employment or existing

contracts

2. Some correlation between psychological traits and entrepreneurship but it seems many people learn or acquire attributes needed

•  Belgian students: 5% have run own business •  American students: 60% have run own business

3. Fast seconds win fast as often Product Innovator Winner Diet Cola R.C. Cola Coca Cola Microwave oven Raytheon Samsung Video Games Players Atari Nintendo Web browser Netscape Microsoft

Myths 4. You need lots of € 5. Do something you love and the € will follow 6. You need to take big risks 7. You have to be young to start a company

IV. Starting a Company – Myths vs. Reality (2/2)

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Reality 4. Why do people start a new business? •  € / independence / no alternative / < hours •  0.03% of new companies financed by venture capital •  Average amount of € used to start a business is 20k USD •  Common source of capital: savings and personal debt

5. 6. Successful entrepreneurs remove risks not take risks 7. The average age of a 1st-time entrepreneur starting a technology business is 39 in the USA

What  are  you  good  

at?  

What  do  you  like  to  do?  

What  people  will  pay  you  for?  

2. After first 6-12 months, identify best performers double-down on top 20%

70 % Fund

Capital

1. Start with large, well screened funnel of early stage companies or ideas around key themes

3. Build conservative model assuming 5-10% larger exits @ > $100M, 10-20% smaller exits @ <$100M

30% Fund

Capital

V. Strategy of Venture Capital Companies - Calculated Bets on the Funnel

Quantitative Investing before Traction

50 projects @ $$$K avg. (1st check) - Assume high failure rate (up to 80%)

Double-Down after Traction

10+ ‘winners’ @$$$$K-$$$M (2nd + 3rd check)

- - Target 2+ exits

@ $$$$M+

V. Strategy of Venture Capital Companies

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Myths •  Market research – consumers

are incapable of envisioning the future, you just have to give it to them

•  Product is viral – CTR on Facebook are 2% about the same as banner ads

•  Market size is xxx billion

Take 4 typical questions 1.  What problem are you trying

to solve? 2.  What is your target market? 3.  What is unique about your

product versus what is currently in the market?

4.  What do you need?

VI. Pitching Mistakes – Myths vs. Reality

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Reality •  Even Steve Jobs was not Steve Jobs •  Until a product is viral it‘s not viral •  You don‘t know how to analyzeyour

addressable market if your market is billions of euros.

4 hard questions 1.  How do you know what your customers want? 2.  How do you know that your customer will pay

for your product? 3.  How will competitors respond to your entry? 4.  What are your KPI‘s?

July 31st, 2013

 Ques@ons?  

Dr. Robert C. Bush Jr. Mail to robert.bush@curtis-newton.com

Address • curtis newton gmbh • Venloer Str. 151-153 • 50674 Cologne, Germany • Phone +49 221 29218 - 400 • Fax +49 221 29218 - 599

Follow us here fb.me/curtisnewtonlab • @curtisnewtonlab Web www.curtis-newton.com

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