krypton venture capital investment model

Do you have a Start Up company?

Do you know someone who has a Start Up company?

Quick Warm Up Question – Please Raise You Hands

Israeli’s Answers – 100 People 350 Hands Up !

Krypton VC - Our Name

Are Finance People Smarter ?

No One Is Smarter Than All Of You Together!

We Do Not Speculate - We Win!

Mass Intelligence

Game Plan

1. Start Up Ecosystem2. Start Up Ecosystem - Israel3. “Venture Capital Behind The Scenes” - BtoC4. Get To Know Your Competitor

*Krypton Investment Mechanism

Start Up Ecosystem - Investment Entities - “Suits World”

1. Angel Investor 2. Corporate Venture Capital (CVC)3. Equity Fund 4. Fund of Funds5. Hedge Fund 6. Holding Company 7. Incubator 8. Investment Company 9. Management Company 10. Mutual Fund 11. Secondary Fund 12. Turnaround Fund 13. Venture Capital (VC) Fund 14. Venture Capital Limited Partnership

1. Angel Investor - An individual who provides capital to one or more startup companies2. Corporate Venture Capital (CVC) - A subsidiary of a large corporation, which makes venture

capital investments3. Equity Fund - A fund which invests primarily in stocks, usually common stocks4. Fund of Funds - A fund which invests in other funds. 5. Hedge Fund - A fund, usually used by wealthy individuals and institutions which is allowed to

use aggressive strategies that are unavailable to mutual funds, including selling short, leverage, program trading, swaps, arbitrage, and derivatives. Since they are restricted by law to less than 100 investors, the minimum investment is typically $1 million. The general partner usually receives performance-based compensation. Hedge funds are not common in Israel.

6. Holding Company - A company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors. Also called a parent company.

7. Incubator A company or facility designed to foster entrepreneurship and help startup companies, usually technology-related, to grow through the use of shared resources and intellectual capital

Start Up Ecosystem - Investment Entities - Detailed

8. Investment Company - A firm that invests the pooled funds of retail investors for a fee. There are two types: open-end (mutual funds) and closed-end (investment trusts)

9. Management Company - The firm that organizes, manages, and administers funds. 10. Mutual Fund - An open-ended fund operated by an investment company, which raises

money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Benefits include diversification and professional money management. Shares are issued and redeemed on demand, based on the fund's net asset value, which is determined at the end of each trading session.

11. Secondary Fund - A fund which purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market.

12. Turnaround Fund - A private equity fund, which invests in troubled companies to cause a sharp, positive reversal in their performance.

13. Venture Capital (VC) Fund - Funds made available for startup firms and small businesses with exceptional growth potential. Managerial and technical expertise are often also provided. Also called risk capital.

14. Venture Capital Limited Partnership - Limited partnership that is formed to invest in small startup businesses with exceptional growth potential.

Start Up Ecosystem - Investment Entities - Detailed

Start Up Ecosystem - Company Terminology

1. Company2. Related Company3. Spin Off4. Startup

Start Up Ecosystem - Company Terminology

Related Company - A company which isn't listed in local territory but has at least one of the following characteristics: Headquartered in local territory; Has an R&D center in Local Territory; Has senior local management or received funding from an local company. Spin Off - An independent company created from an existing part of another company through sale or distribution of new shares. Startup - A new business venture in its earliest stages of development.

Start Up Ecosystem - Company Stages and Status

1. Seed 2. Research and Development (R&D)3. Mezzanine level4. Initial Revenue5. Revenue Growth6. Ceased to Operate7. Suspended Operations

Start Up Ecosystem - Company Stages and Status

1. Seed - A startup company, which is in its early days of product development and fund raising.Research and Development (R&D) Discovering new knowledge about products, processes, and services, and then applying that knowledge to create new and improved products, processes, and services that fill market needs.

2. Research and Development (R&D) - Discovering new knowledge about products, processes, and services, and then applying that knowledge to create new and improved products, processes, and services that fill market needs.

3. Mezzanine level - A term used to describe a company which is somewhere between startup and IPO. Venture capital committed at this level usually has less risk but less potential appreciation than at the startup level, and more risk but more potential appreciation than in an IPO.

4. Initial Revenue - A company whose yearly revenue does not exceed $10 million dollars.

Start Up Ecosystem – Company Stages and Status

5. Revenue Growth - A company whose yearly revenues exceed $10 million dollars and has a double digit yearly growth rate.

6. Ceased to Operate - When a company or project is listed as “Ceased to Operate” on IVC-Online*, it means that the company or project is no longer operating in its latest reported offices and the known communication channels with such company or project are not operating. “Ceased to Operate” does not necessarily mean the company or project is liquidated or dissolved.

7. Suspended Operations - When a company or project is listed as “Suspended Operations” on IVC-Online* it means that the company or project has suspended its R&D activity. However, such company or project can still have an IP (Intellectual Property) that it is interested in selling or offering integration services through third parties. It is possible that a company or project under suspension may, in the future, be re-operating and the listing can be reversed when IVC is so notified.

Start Up Ecosystem - Company Terminology

Target Crowd – Business Model

1. Business To Consumer 2. Business To Business

B2C B2B

3 Important Data Slides On Israel

Please Stay Strong!

Start Up Ecosystem - Israel

Start Up Ecosystem - Israel

• Israel has more than 5,000 active startup companies• More than 2,000 new pre-seed join the cycle annually • Average of ~600 New startups every year • Israeli high-tech companies raised $2.3 billion in 2013• Altogether 662 finance deals • 395 deals attracted 1.7 billion =74 % • the highest amount in the past 10 years

*IVC-Online Database (www.ivc-online.com)

*IVC-Online Database (www.ivc-online.com)

Decline In Internet Deals

*IVC-Online Database (www.ivc-online.com)

Investment By Stage

“The days when a startup could sell investors on a dream andnorevenuearecomingtoaclose” -Chris Dixon

Decline In Internet Deals

“Venture Capital Behind The Scenes” – B to C

Business or transactions conducted directly between acompany and consumers who are the end-users of itsproducts or services.

Real World - Definition of 'Business To Consumer – B To C

Real World - Definition of 'Business To Consumer – B To C

Traditional B to C Investment Firms

1. No Evaluation Model In B to C Universe = High Risk

2. Inefficient Use of Investment = Waste

3. Time To Market = Changing Market / Needs

Traditional B to C Investment Firms

What Is The Solution – NO B TO C ?

What You Should Do?

McDonald’s

Supermarket

Startup

KIM Investment Mechanism – We Don’t Know

KIM Investment Mechanism – We Don’t Know

1. Mass Intelligence

2. Smart Marketing &Capital Investment

3. No Wasted Time

What Do We Look For ?

1. Me Too & Market Size

2. Committed & Smart Team

3. Working POC = Working Proof of Concept

Krypton Investment Process

Mass Intelligence Stage 500k – 1 Million USD Marketing Investment

100K-1Million Cash Investment

Heart Beat Evaluation

Yes

PredeterminedEquityPartnershipAdditional Investment

Separation

No

Take Homes

1. Ice Breaker – “Superman”

2. Know Your Friend - Start Up Ecosystem

3. Dream Days Are Over – Know Your Revenue Model

4. MacDonald's Or Startup?

5. Know Your Enemy and Learn From Him

6. No Wasted Time