Date post: | 14-Jul-2015 |
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Startup Galore … … How VCs think in a Unicorn World.
Thomas Grota, Investment Director T-‐Venture (Deutsche Telekom) @thomasgr Blog: thomasgr.tumblr.com
Pirates on Shore 2015
My current porKolio and areas of VC experNse:
Mobile Internet, Big Data & Cloud based PlaKorms
Thomas Grota – Investment Director T-Venture Holding GmbH – @thomasgr
E X I T S
T-‐Venture’s PorKolio of 100co’s
3 Unicorns & 5 IPOs $1B+ in Value
20+ Centaurs $100m+ in Value
40+ of Little Ponies $10m+ in Value
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So.. How can I become successful in Fundraising?
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Learn to understand how Investors THINK about YOU!
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Like Startups – VCs are risking to burn $$$ of LPs
55% of US venture capital investments are wriaen off
62% of EU investments are wriaen off
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But the Market has changed – and so did VCs.
2/9/15 10
4.000.000 €
400,000 €
40,000 € 4,000 €
1995 2005 2010 2014
Costs needed to start an IT based company
Technology Drivers
Open Source
Cloud + AWS
Developers Start Companies
==========
99% cost reduction
Entrepreneurs need less capital to start a company Thanks to cloud, viral markeNng via social & easy payment.
441
119 75 86
2000 2005 2010 2012
# of acNve U.S. VCs declined, But BIG funds raised. … low number leads to dominant VCs seeking Unicorn investments.
2/9/15 12 Previous Tech Cycle
Current market cap: $139B+ $173B+ $347B+
$33B+
$30B+
$206B+ $212B+
New Tech Cycle
Market Capitalization at IPO ($B)
So private investors capturing more value in early stage companies, encouraging greater pre-‐IPO funding while capturing own pro-‐rata.
*) Data from Q1 2015.
13 This looks promising ! – So let’s start a business…
2/9/15 14
Public listed startups are significantly more mature than in the past IF Pre-‐IPO stage is reached -‐ the investments are secured for longer
IPO in '00 IPO in '13
3.1 7.4
Years to IPO (from first financing)
IPO in '00-'01 IPO in '13-'14
$35 $102
Revenue ($mn)
IPO in '00-'01 IPO in '13-'14
13.3 5.3
Valuation/Revenue Multiple
More Time More Revenue Smaller MulNple,
but more Return
Late stage private financing produces loky valuaNons. When a concept works the competition is fierce.
2/9/15 15
Seed Stage Early Stage Later Stage
Larger Later stage rounds aker validaNon
More seed rounds as costs decline & sources of capital increase
TradiNonal VC
Today’s VC
ValuaNon Beaer equity posiNon for early stage investors and founders
compeNNve areas (Big funds needed)
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Thus late stage valuations have risen the fastest in 4years! That competition based trend must be watched very carefully…
184%
235%
Source: Q2 20014 PitchBook US Venture Industry Data Sheet. As of Q1 2014
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Consider: Early Exit: lower price, big stake vs. Late Exit: higher price, small stake
Not everyone will reach the BIG EXIT
… Buyers are looking for the Big Deal!
To be successful offer great Value to Customers
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To be successful offer great VALUE to Customers
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You are THE hardest compeNtor …. or THE best fit
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you close an innovaNon gap for a market leader
Snowden gave as the Opportunity to Become Big in Security
21 There is the Opportunity to Become Big in SECURITY…
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However the focus is outside Europe for the future !
The App Economy is Growing much Faster outside EU28 Revenues from apps and app related products & services, EU28 vs. Rest of World, 2014
Seek smart partnerships for reach and trust
23 Seek smart partnerships for reach and trust
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QuesNons?
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Always ask for advice -‐ not for money. (money will come if advisor is interested)
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ENJOY THE RIDE BEING AN ENTREPRENEUR! ...
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…. but find the right Balance in life – Have FUN!