KIC Innoenergy Master School - Session on Venture Capital Funding

Sociedade de Capital de Risco, SA

KIC Innoenergy Master School UCP Lisbon/ IST

Lisbon, 20 October 2014

Sociedade de Capital de Risco, SA

Financing

Needs

FFF / Microcredit

TTA

Business Angels

Venture Capital

Bank Debt

Public Funding Programs (ex. H2020)

Customers

Sources of Funding

+

+ -

-

Stage of Development

( + Risk - )

Pre-seed/ Accelleration

Seed Series B

• Idea phase

• IP development

• “Alpha”/MVP launch

…

• “Beta” release

• Product/market fit

• Initial traction

• Incorporation

• Monetization

• Formalization • Internationalization

• Traction “ramp-up”

• Growth / scaling

• Globalization

• Consolidadation

Characterisitics

The Early Stage Investment Funding Process

Risk / Mortality Rate

Extreme / >95% Very high (70%-90%) Very High (50%-70%) High (30%-50%)

Start-up (Series A)

Investors

• TTA / Incubator’s

• Government/University funding

• Idea/BP competition

• Personal funds

• Angel investors

• FFF

• Micro VC’s

• Personal funds

• Super Angels • VCs

• VC’s • Hedge Funds

Essential Characteristics

• Sizeable

• Proprietary

• Scalable

• Traction

• Team

• Skin

10 things to keep in mind

Sociedade de Capital de Risco, SA

1. VC’s invest in businesses…

…not ideas

Sociedade de Capital de Risco, SA

2. K.I.S.S.

Sociedade de Capital de Risco, SA

3. Focus

Sociedade de Capital de Risco, SA

4. There is no such thing as a perfect pitch

Sociedade de Capital de Risco, SA

5. You are only as good as your last milestone

Sociedade de Capital de Risco, SA

6. Prospective financials make for great story telling…

…but not much else

“In a startup, no business plan survives first contact with customers.”

Steve Blank

Sociedade de Capital de Risco, SA

7. Traditional valuation metrics (NPV, IRR…) are of little value

Sociedade de Capital de Risco, SA

8.

PRICE VALUE

Sociedade de Capital de Risco, SA

9. Smart Money =

SMARTS + MONEY

Sociedade de Capital de Risco, SA

10. Credibility is EVERYTHING!