From Idea to Sustainable Business

Tomas Martunas

Ncell App Camp, 2014.12.09

• About me• Business development cycle• How your rise your value• Startup or not startup • Elements showing attractiveness of

idea• Investors targets• How to talk to Investor

Agenda

About me and businesses I am involved

1997-2001 2001-2011 2011-2012 2012-Now

GOT FUNDING

GOT FUNDING

GOT FUNDING

PROVIDES

FUNDING ;)

Series AFor What? Monetization, Business Expansion, Sales & Marketing

Who? VC, Alliances

How much? 1-2 Millions USD

Pre-seedFor What? Prototype, Business Plan

Who? FFF, Business Angels, Accelerators, Government grants, Contests, Crowd funding

How much? <20.000 USD

Seed For What? Project development, Beta, Patents, First traction, Monetisation tests, Go-to-market plans

Who? Seed VC Funds, Business Angels

How much? <300.000 USD

3 months

Money

Time

6-24 months 3-5 years

Investments

Sales

Valley of

Death

Business development cycle

Series B; Series C, IPOFor What? Business Expansion, Sales & Marketing

Who? VC, Alliances, Banks

How much? >10 Millions USD

How your company valuation rise over time?

Valuation

Time

Pre-seedYou HAVE IDEA

It is WORTH 0 USD IF you do nothing with it!

SeedAfter 6 months you are LUCKY

YOU get SEED Funding 200.000 USDYour Share value = 700.000 USD

Series AAfter 12-24 months you get lucky again!

You get Series A 1.500.000 USDYour Share value = 4.200.000 USD

What is better?

Startup

• Unlimited opportunities • You control everything• Fast Learning journey

• GRAND responsibility• Multi-tasking/ multi-functions• Total devotion

Employee

• Work from 9:00 till 18:00• Specialization/Focus• Little responsibility

• “Salary CAP”• You are controlled• Limitations/Restrictions

+

“Law of startup physics: the amount of work you have will always expand to 1:30 AM” Box.net CEO Aaron Levie on Twitter“Law of startup physics: the amount of work you have will always expand to 1:30 AM” Box.net CEO Aaron Levie on Twitter

+

--My 2 cents: Stride for what you desire,

Do what you know best!

TOP 10 Elements of Sustainable & Attractive Startups

Startups with characteristics in next

slides have the best chance to

become enduring companies

Source: www.sequoiacap.com

No.1 Clarity of purpose

Summarize the company’s business on the back of a business card.

No.2 Large markets

Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop.

No.3 Rich customers

Target customers who will move fast and pay a premium for a unique offering..

No.4 Focus 

Customers will only buy a simple product with a singular value proposition.

No.5 Pain killers  

Pick the one thing that is of burning importance to the customer then delight them with a compelling solution.

No.6 Think differently 

Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition.

No.7 Team DNA   

A company’s DNA is set in the first 90 days. All team members are the smartest or most clever in their domain. “A” level founders attract an “A” level team.

No.8 Agility 

Stealth and speed will usually help beat-out large companies.

No.9 Frugality 

Focus spending on what’s critical. Spend only on the priorities and maximize profitability.

No.10 Inferno

Start with only a little money. It forces discipline & focus. A huge market with customers yearning for a product developed by great team requires very little firepower.

What are investors targets?

• Get profit. Investors want to get return on investment.

• Capital preservation. To diversity assets, keep nominal growth, avoid inflation.

• Synergies. Product can add value for Investors other Investee companies or their products/services.

• Self-actualization. Need for now-how transfer, recognition (business angels).

Stages ROI / yearSeed 60%+

Start-up 50%Early stage 40%2nd stage 30%Near exit 25%

How to talk to Investor?

• Idea for Investors has to be presented Fine-tuned.

• With Investors you need to talk their Language (Traction, LTV, CAC, Pre-money valuation… )

• Provide numbers, researches, assumptions, amount you need, where you plan to invest them, how you plan to earn money

• Do not expect fast result – Fund rising is long negotiation process.

RinkaProduktas

Product Market Team Finance

4 essential parts of Pitch

Tomas Martūnas

App Camp

CEO

LTK Capital

Partner & Business Development Director

Mobile: +37061145376

E-mail: t.martunas@ltkcapital.com.

t.martunas@appcamp.lt

http://lt.linkedin.com/in/tomasmartunas

THANK YOU !!! YOU ARE THE BEST !!!