1

Risikokapital og finansiering

UIO, 1 februar 2005

2

Contents

Introduction

The FSV Group

How VCs think and operate

Creating a successful startup

What to do now?

3

FSV is a leading Nordic VC

• Among the oldest and most seasoned VCs in the Nordic– Established in 1985– Currently investing from MNOK 530 FSV III, raised April 2000– Operating FSV IV, MNOK 590, largest secondary direct in the Nordic to date– FSV was a founding member of the NVCA (in 1989 …. and in 2001)

• Experienced Investor in Nordic and international tech companies – Reviewed >3 000 projects and 6-8 portfolios since inception

• Invested in 65+ companies and one major portfolio– Close co-operation with Advent International throughout– Founding member of the Nordic Venture Network

• Proven exit track record– 12 IPOs, 3 on Nasdaq– 46 industrial exits

• Introduced International VC structures to Norway – Preference shares, Anti-dilution, Veto-rights, Drag, Tag etc.

4

Our business…

.. Is to identify high potential growth companies

.. Invest in these companies

……work closely with management and other owners to build value in a 3-5 years perspective.

.. Exit (IPO or trade sale), and repeat…

Structured as funds to ensure liquidity focus and to protect ownersStructured as funds to ensure liquidity focus and to protect owners

5

FSV currently manages approx. NOK 2 billion invested capital across 100+ portfolio companies

• Established 1985

• NOK 130 mill. fund

• ICT sector focus

• Fund closed

FSV I

• Established 1996

• NOK 300 mill. fund

• Dedicated ICT fund

FSV II

• Established 2000

• NOK 530 mill. fund

• Dedicated ICT fund

• 70+% of committed capital invested

FSV III

• Established 2003

• NOK 590 mill. secondary fund with follow-on capital

• Sectors include: ICT, energy, maritime, services

FSV IV

                                                  

6

FSV has a diversified blue chip investor base

Main shareholders in Four Seasons Venture II

Aksjefondet Skandia Teknologi Bonheur ASA Den Norske Krigsforsikring for Skib Ganger Rolf ASA Gjensidige NOR Forsikring Gjensidige NOR Sparebank

Gjensidige NOR Spareforsikring Møller Investor AS Schibsted Multimedia AS Skaufoss AS Torstein Tvenge Vesta Forsikring AS

Main shareholders in Four Seasons Venture III

Avanse

Bonheur ASA

Control Consult AS

Den Norske Krigsforsikring for Skib

Gjensidige Forsikring

Gjensidige NOR Spareforsikring

Hartog & Co. AS

Orkla ASA

Schibsted Multimedia AS

Skandia Liv AB

Sparebank 1 Livsforsikring AS

Storebrand Livsforsikring AS

Torstein Tvenge

Main shareholders in Four Seasons Venture IV

Brage Invest AS

Dyvi AS

Firmament AS

Foinco AS

Hafslund Offentlige Pensjonskasse

Hamang Papirfabrik AS

Indigo Invest AS

Institusjonen Fritt Ord

Lærdal Finans AS

Natexis Private Equity International

Opplysningsvesenets Fond

Skagen Vekst

Sundt AS

Tredje AP -Fonden

Vital Forsikring ASA

7

Contents

Introduction

The FSV Group

How VCs think and operate

Creating a successful startup

What to do now?

8

A good VC manages risk

Private Equity Investments

Treasury Bonds

Public Shares

Venture Investments

Return

Risk

Corporate Bonds

Due diligence process and right agreement structures are key risk management toolsDue diligence process and right agreement structures are key risk management tools

Seed Investments

Pre-seed Investments

9

..and seeks to optimise the risk-reward ratio

• Build your execution plan

• Estimate capital required

• Consider risk-reward from investor perspective (market risk? - technology risk? - team risk?)

• ....reiterate

Knowing the customer is a pre-requisite for a succesful sale(you want the investor to ’buy’ your story)

Knowing the customer is a pre-requisite for a succesful sale(you want the investor to ’buy’ your story)

10

The venture lifecycle is fairly standardised

ScreeningScreening Due DiligenceDue DiligenceVekst /

Internasjonal-isering

Vekst / Internasjonal-

iseringInvesteringInvestering ExitExit

2-5 years

Dea

lsou

rcin

g

ScreeningScreening Due DiligenceDue DiligenceVekst /

Internasjonal-isering

Growth/ International-

isationInvesteringInvestment ExitExit

2-18 weeks -

Screening:

• Ensure broad flow of high quality

• Conduct initial screening

Due Diligence:

• Deep analysis of the company

• Issue Term Sheet

• Complete legal, commercial and technological Due Diligence

Investment:

• Unanimous partner group

• Investment committee approval

• Best practice legal structures

Growth/Intern.:

• Build the company

Exit:

• Exit through:

-Merger

-Trade Sale

-IPO

Pur

pose

11

..and most VC’s look for the same basic things

• A great team…….and ideally a good idea and scalable business model

• A large and/or fast growing market

12

Building trust early creates the right basis

13

..for a productive partnership

VC’S DRIVE THE VALUE AGENDA:

• Strategic & international perspective and experience

• Partnering: customers, channel and technology

• Building the management team

• Coaching (and changing) management

• Financial and strategic control functions

• Assisting in M&A, IPO and other financing activities

• Balancing the technology and market perspectives

14

Who controls the company following an investment?

… maintaining sense of shared purpose is essential for success… maintaining sense of shared purpose is essential for success

15

Classic entrepeneur pitfalls

• Explaining product/business model is only thing that matters

• VCs consider individual projects solely on their own merits

• Raise money when needed as opposed to when available

• 100% times 1 > 30% times 10

• VCs focus exclusively on maximising upside

• Rational machines, not emotional humans….

16

Contents

Introduction

The FSV Group

How VCs think and operate

Creating a successful startup

What to do now?

17

Creating a successful startup

• Share – information, ownership, honour

• Sell – to everyone all the time

• Create an ecosystem – people can move mountains

• Get paying customers - the proof of the pudding is in the eating!

… Create a self-fulfilling prophecy!… Create a self-fulfilling prophecy!

18

Steinvender ASA

Investors

Advisory Board& Sector Experts

Newco(now FSV IV)

The (FSV) SNDI ecosystem

19

Contents

Introduction

The FSV Group

How VCs think and operate

Creating a successful startup

What to do now?

20

What now?

• Build credibility and competence

• Work with people you respect (and that know more than you)

• Learn to sell

• Get to know your niche