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Startup galore how VCs think in a unicorn world - T-Venture Thomas Grota
The document discusses the evolving landscape of venture capital and startup funding, highlighting the shift in how investors approach companies in a unicorn-driven market. It notes the significantly reduced costs for startups due to technological advancements and emphasizes the importance of understanding investor perspectives. Additionally, it underscores the growing competition among late-stage valuations and the need for entrepreneurs to create substantial value for their customers.
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Startup galore how VCs think in a unicorn world - T-Venture Thomas Grota
- 1. 1 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
- 2. 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
- 3. 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
- 4. 4 So.. How can I become successful in Fundraising?
- 5. 5 Learn to understand how Investors THINK about YOU!
- 6. 6 Like Startups – VCs are risking to burn $$$ of LPs
- 7. 55% of US venture capital investments are wriaen off
- 8.
- 9. 9 But the Market has changed – and so did VCs.
- 10. 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.
- 11. 441 119 75 86 2000 20052010 2012 # of acNve U.S. VCs declined, But BIG funds raised. … low number leads to dominant VCs seeking Unicorn investments.
- 12. 2/9/15 12 Previous TechCycle 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. 13 This looks promising ! – So let’s start a business…
- 14. 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
- 15. 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)
- 16. 2/9/15 16 Thus latestage 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
- 17. 17 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!
- 18. To be successfuloffer great Value to Customers 18 To be successful offer great VALUE to Customers
- 19. 19 You are THE hardest compeNtor …. or THE best fit
- 20. 20 you close an innovaNon gap for a market leader
- 21. Snowden gave asthe Opportunity to Become Big in Security 21There is the Opportunity to Become Big in SECURITY…
- 22. 22 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
- 23. Seek smart partnershipsfor reach and trust 23 Seek smart partnerships for reach and trust
- 24. 24 QuesNons?
- 25. 25 Always ask for advice -‐ not for money. (money will come if advisor is interested)
- 26. 26 ENJOY THE RIDE BEING AN ENTREPRENEUR! ...
- 27. 27 …. but find the right Balance in life – Have FUN!