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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.  

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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.  

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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…  

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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.

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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!