David Scholtz - Ariadne Capital
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Presented by David Scholtz 26 th May 2011 Nice idea, or nice little earner? Ariadne Capital’s view on equity investments in the Creative Sector
description
David Scholtz, Associate Director at Ariadne Capital, discusses Ariadne's view on investments in the creative sector.
Transcript of David Scholtz - Ariadne Capital
Presented by David Scholtz 26th May 2011
Nice idea, or nice little earner?
Ariadne Capital’s view on equity investments in the Creative Sector
Building Great Businesses
• What is Ariadne Capital?
• Themes & Future Developments
• Ariadne Exits
• Architecting for Success
• Stages of Company Growth
• Creative Sector Opportunities
• What We Look For
• Our ACE 1 Fund
What is Ariadne Capital?
• Founded in 2000 by Entrepreneurs Backing Entrepreneurs
• Building the bridge between start-up and corporate• Three closely linked business units:
• ACE1 Fund• £20m early stage fund focused on Digital Enablers
• Corporate Advisory:• Capital Placement (later stage)
• Business Development (Corporates and high-growth companies)
• Strategic Advisory (Corporates and high-growth companies)
• Entrepreneur Country:• Online community of Entrepreneurs and Corporates
• Events aimed at raising the profile of Entrepreneurialism
BeatThat Quote sold to Google in 2011 Product Comparison
AIM listed in 2007; current market cap ~£160m (2011)
Mobile banking*
Stan James acquired 50% Racing Today, Nov 2010
Online Gambling*
Acquired by EMI, August 2010 Viral Widget Distribution*
70% acquired by Powwownow, July 2010 SaaS Collaboration Tools*
Acquired by Nuance for $102m, Dec 2009 Voice-as-a-Service*
Acquired by EMC for $153m, May 2006 Data Protection
Acquired by eBay for $2.6bn, Sep 2005...(Microsoft 2011 for $8.5bn )
VoIP
Acquired by Miva for $183m, June 2004 Pay-Per-Click
Acquired by Vendare Media in 2004, then to Connexus and Epic Advertising
Search Relevancy
Ariadne Exits 2000-2011: Early Market Exits
New.Net
Five Stages of Company Growth
1. Concept Stage
o Insight into a behaviour
o Initial alpha to closed beta
2. Product Stage
o Open Beta
o Define Go-To-Market strategy
3. Biz Model Validation
o Building traction
o Establish channels
4. Scale
o Fully funded at ~£5m
o Scale through partnerships
5. Exit
o Sustainable business
o Consolidate or get consolidated
5
Creative Industry Opportunities
• Great opportunity to enable the eco-system economics model
• Leverage digital opportunities to scale• Service industries have shifted to online• Leverage tools that enable co-creation, distributed
roles & lean operations• Focus on creation and benefit from process from
digital efficiencies• Value attributed to:
• Insights• Processes• Team• Clients
• Innovative business models• Turn insight into a process / framework• Get paid for value• Systematise low-value / best practice• Value created not only in the service but in the provision• Companies that become a ‘must have acquisition’• Examples of key deal flow of interest in creative sectors:
• Advertising creative process• Fashion (e.g. design)• Creative process workflow management (e.g. architecture
sector)• Digital media (video, music, ebooks, etc.) distribution, co-
creation and data• Hospitality sector automated data services
What we look for in the Creative Sector
ACE Fund I
• Focus
• £20m venture fund (LLP) for seed / early stage “digital enabler” businesses
• Looking for businesses that can scale through partnerships and “open markets”
• Typical Deal
• £250K - £500K with potential to co-invest
• £3m - £6m fully funded model
• Strong management team, relevant expertise / track record
• Game changing models in sector i.e. “digitally enabled” new “ecosystem economic”
• No pre-beta technology risk; will take market execution risk
www.ariadnecapital.com
Thank You
