kic innoenergy master school - session on venture capital funding
DESCRIPTION
Session on Start-up funding alternatives, venture capital and pitching to VC'sTRANSCRIPT
Sociedade de Capital de Risco, SA
KIC Innoenergy Master School UCP Lisbon/ IST
Lisbon, 20 October 2014
Sociedade de Capital de Risco, SA
Financing
Needs
FFF / Microcredit
TTA
Business Angels
Venture Capital
Bank Debt
Public Funding Programs (ex. H2020)
Customers
Sources of Funding
+
+ -
-
Stage of Development
( + Risk - )
Pre-seed/ Accelleration
Seed Series B
• Idea phase
• IP development
• “Alpha”/MVP launch
…
• “Beta” release
• Product/market fit
• Initial traction
• Incorporation
• Monetization
• Formalization • Internationalization
• Traction “ramp-up”
• Growth / scaling
• Globalization
• Consolidadation
Characterisitics
The Early Stage Investment Funding Process
Risk / Mortality Rate
Extreme / >95% Very high (70%-90%) Very High (50%-70%) High (30%-50%)
Start-up (Series A)
Investors
• TTA / Incubator’s
• Government/University funding
• Idea/BP competition
• Personal funds
• Angel investors
• FFF
• Micro VC’s
• Personal funds
• Super Angels • VCs
• VC’s • Hedge Funds
Essential Characteristics
• Sizeable
• Proprietary
• Scalable
• Traction
• Team
• Skin
10 things to keep in mind
Sociedade de Capital de Risco, SA
1. VC’s invest in businesses…
…not ideas
Sociedade de Capital de Risco, SA
2. K.I.S.S.
Sociedade de Capital de Risco, SA
3. Focus
Sociedade de Capital de Risco, SA
4. There is no such thing as a perfect pitch
Sociedade de Capital de Risco, SA
5. You are only as good as your last milestone
Sociedade de Capital de Risco, SA
6. Prospective financials make for great story telling…
…but not much else
“In a startup, no business plan survives first contact with customers.”
Steve Blank
Sociedade de Capital de Risco, SA
7. Traditional valuation metrics (NPV, IRR…) are of little value
Sociedade de Capital de Risco, SA
8.
PRICE VALUE
Sociedade de Capital de Risco, SA
9. Smart Money =
SMARTS + MONEY
Sociedade de Capital de Risco, SA
10. Credibility is EVERYTHING!