An Evening With The Forsyth Group

Hi-Growth Technology and the Industrial Revolution 2.0

Brett PutterManaging Partner - Forsyth Group

@brettonputter

•New technologies

- Lower cost & quicker to implement

•Experienced executives

•Availability of investment

•Social / viral networks

•Market size – billions of people connected

•Every analogue business can & will be disrupted

Industrial Revolution 2.0 - Drivers

Multi $Bn valuation& Profitable

IPO – No. 1 social game

Raised $100m

IPO!!

The world’s most valuable company $35m D VC round

Fastest web site to get to 10m users

$105m Revenues in 2011

Raised $4m A round

Raised $24m in 2011

Raised $1.8m A round

What’s Hot

• Mobile Apps

• Online Publisher Solutions

• Big Data

• Cloud / SaaS / PaaS

• Social Commerce

• Social Media & Social Games

• Social Search & Recommendation

The 7 Life Stages of a Company

Which company stage is right for you?

1. Early Stage

• Idea - Proof of concept / product in alpha

• Little / no funding – friends and family

• $0 to $50k to $200k

• No salary

• 1/2/3 in team

• No revenues

• Opportunity for “co-founder” equity

• Very HIGH risk .

2. Seed Stage

• Product into beta stage – need to prove traction & business model

• $100k to $1m – Angels / Accelerators / VCs

• Limited salary

• 4/5 in team

• No revenues (small if any)

• Opportunity for sizable equity involvement

• HIGH risk

3. VC Stage “A”

• Proof of product market fit and business model

• VCs invest - $1m to $5m - “A” round of funding

• VCs bring in senior management

• Market related salaries

• Team building <10 to approx 20

• Some revenues

• Stock options - 1% or less

• Still pretty risky

• Expand product range

• VCs invest - $10m + (multiple)

• Market related salaries

• Team grows to 100+

• Significant revenues & scaling fast

• Internationalisation

• Stock options < 0.5%

• Significantly less risk

4. VC Stage “B/C/D”

5. Towards IPO / M&A Exit

• Multiple products

• VCs exit

• Top exec’s salaries increase

• Team grows to 1000+

• Significant restrictions and internal politics

• Internationalisation

• Small stock option grants annually

• Significantly less risk

6. Legacy Technology Companies

• Big, inflexible, flat lining, growth by acquisition

• Team size 10,000+

• Multiple products

• Significant frustrations

• Stock option grants annually

• Significantly less risk

Variables• Meaningful impact• Stage• Team• Funding• Product• Traction• Revenues• Remuneration – Google cut• Stock options / equity• Risk

Rewards

• Co-founders 5% to 25% +

• Employee / service providers

Due Diligence

• Team

• Funding

• Product

• Market

• Investors

VC Firms

Hi-Growth Technology Environment

• Investors have a lot of say

• IQ – high intellect

• Speed of execution & change

• Driven by technology & innovation

• Extreme environment - pressure

• Winner takes all

• Risks & rewards

What Companies Are Looking For

• Right attitude

• Drive, passion, energy, commitment, perseverance, determination, belief

• Get things done with limited resources

• Match to the culture of the company

• Skills / experience

San FranciscoBerlin

London

New York

Global Opportunity

London Tech Scene

• Hot

• Silicon RoundAbout

• TechCity / Government

• Networking events

– Silicon DrinkAbout, OpenCoffee, Product Tank, London Web Summit, Seedcamp etc

• Universities, Management Schools

• Most top VCs have offices in London

Join the Industrial Revolution 2.0!

Bretton PutterForsyth GroupEmail: brett@forsythgroup.comTwitter: @brettonputter Questions?