ACCELERATING STARTUPSintro

Entrepreneuria Salon, 24.X.2013, @ PROPAGANDA

jkaczmarek@most-program.org

MOTIVATION

● pure pleasure● entrepreneuria startup

academy (summer 2013)● the 3 mega trends

THE 3 MEGATRENDS

1. the innovative entrepreneurship (gold?) rush2. begging for the next wave of innovation 3. talent wanted!

THE RUSH

the hype cycle by: Jackie Fenn & Mark Raskino, Gartner Inc.

Innovative Entrepreneurship?

natural resources

debt

TROUBLE IS...

● innovation needs $$$$$$$$$$$$$● innovation needs time● high risk (but must be balanced against not innovating)● risk that cannot be mitigated, must be accepted● lack of adequate performance measures● lack of reliable risk assessment measures● global competition is fierce

2# FUNDING GAP

Global problem: plummeting VC performance

BEGGING for...

● VC not adequate for long term investment (currently average seed->IPO cycle = ~10 years)

● Unstable: boom or bust cycles (uneven funds commitment )● EU problem: fragmented private equity, poor syndication, few

pan-European investors, local focus.● change of paradigm: no more technology push, customer crowds

reign EU: fragmented markets● Silicon Valley model not replicable? ● other means emerging: crowd funding (e.g. kickstarter.com)

BRIDGING THE FUNDING GAP

the hype cycle by: Jackie Fenn & Mark Raskino, Gartner Inc.

accelerators

private VC

crowdfunding

corporate/public VC

loans/stock/bonds

3# TALENT WANTED

EU problem: “a long tail of poor performance enterprises operating in fragmented uncompetitive markets.” , UK problem: “increasing the supply of VC has had a limited impact.”

Technopolis report to ERAB on VC and Yollies, Oct. 2011

CEE problem: “Funding outstrips quality ideas”, “Investors are desperately seeking innovation”

Financial Times, Sept 2013

WHAT IS A START-UP ACCELERATOR?

● a modern intensified startup incubator● open application process● intensive ( ~ 3 months)● mentoring, training and networking opportunities,

space, seed funding ● in exchange for equity

ranking source: Seed-DB & Forbes

TOP PROGRAMMES:

WHAT’S SO SPECIAL?

The pool of :● talent (participants)● experience (mentors/trainers)● network (space/meetings/feedback)● money (seed investment)

+ a clear goal

ARE THERE ACCELERATORS KINDS?

4 modelsA. talent farm (investor driven)B. next gen school (edu driven)C. employment catalyst (gov/ngo driven)D. business development (corporate driven)

TALENT FARM - Y Combinator ● funded: 2005● 550 startups funded

(AirBnB, Dropbox, Scribd) ● total investment $7.78 bln, ● average $45.2 m per

company● top 20 worth $ 4.7 bln

EDU PROGRAM

● Rock Accelerator Award Program

● INSEAD Centre for Entrepreneurship (ICE) Entrepreneurship Accelerator

CASE - INCUBATORS PROGRAMME by CSO, IL ● funded: 1991, by 2012 > 1,700 startups, $650M● 24 technology incubators… by 2009, 22 privatized !!!● 70- 80 new startups every year● ~ 1 gov $ attracted further 5-6 of private $● ~40% of the graduates still up and running● 100 Israeli start-ups gone NASDAQ in past 10 yrs● key sf: strict quality & performance control● key criterion: too risky to get private investor

CORPORATE

● Nike +

● Sanoma (Helsinki based publisher)

BENEFITS

● risk transfer● risk mitigation (pre-seed, seed)● intensive● better filtering● competitive (in attracting talents)● branding● hands-on● direct access to investors● builds entrepreneurship culture

CHALLENGES

● mainly ICT so far● shortage of talent● competition● still high risk (are we in a

bubble?)

● lack of standards● shortage of tutors● mental barriers

● too slow● shortage of personnel● culture incompatibilities

● culture clash● lack of measures● siloing

SOLUTIONS...

● shorten the exit cycle● corporate/government VCs, oh… really? (cultural clash)● VC syndication (including corporate VCs?)● focus on the small proportion of exceptional young firms that

grow fast to become large firms.● seek complementarities with public funding (highest risk/max

gain)

SOLUTIONS...

● do not mitigate risk, accept it, transfer/optimise● involve crowds (filtering/feedback/funding)● invest in technologies that make innovation cheaper (in silico

modelling, 3D printing)● offshore innovation ? :P

PRECAUTIONS!

● not only entrepreneurship● watch out with public money!● next wave of interventionism?● overloaded entrepreneurs● match supply of funds with the demand

LET’S DISCUSS

1. Challenges confronted by current acceleration programmes in Poland. What can still be learnt from foreign experience?2. The role of accelerators, costs and benefits, weaknesses to overcome and strengths to build upon.3. Startup acceleration and creation of entrepreneurship culture.4. Financing models of acceleration programmes and their long term financial viability.

1. Challenges confronted by current acceleration programmes in Poland. What can still be learnt from foreign experience?2. The role of accelerators, costs and benefits, weaknesses to overcome and strengths to build upon.3. Startup acceleration and creation of entrepreneurship culture.4. Financing models of acceleration programmes and their long term financial viability.5. Acceleration kinds: private, non-profit, public, hybrid?6. Can accelerators provide for the next wave of innovation? (critical approach welcome!)7. Acceleration programmes and technology transfer policies.8. Beyond acceleration - can the trend be leapfrogged?