Startnowhow - Opportunity Recognition and Evaluation
Transcript of Startnowhow - Opportunity Recognition and Evaluation
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Profile of an Investor...
• Male (%70-%95)
• Aged between 35-60
• University graduate
• Proven track record as an Entrepeneur or
Professional
• Can dedicate 1 day minimum for the startup
• Can invest 100K –1M TL into a startup (%20 of PA)
• Willing to open his/her network for the startup
• Knows the industry he/she is investing in
• Geographically close
Source : Prof. Erhan Erkut MEF Üniversitesi; BIC Angel Investor Seminar 13.Nov.2014
Why be an Investor … *?
• Monetary gain
• Personal Gratification
• Diversification of portfolio
• Contibution to the economic development of the society
• To keep oneself busy
*Not necessarily in this order
Source : Prof. Erhan Erkut MEF Üniversitesi; BIC Angel Investor Seminar 13.Nov.2014
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An Investor invests in … • Projects they easily understand
• Projects that excites them…
• Projects they can contribute to ..
• The team .. interity , dedication , focus ..
• Founders they can communicate with
..’coachable’
• Projects of reasonable size
• Startups with not too many shareholders
Source : Prof. Erhan Erkut MEF Universitesi; BIC Angel Investor Seminar 13.Nov.2014
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Selection Committee and Lead Investor
• Selection Committee
• Consists of 4-8 members of BIC Angel Investments, efforts 1-2
hrs/week
• Evaluates 1st round candidates, if interested participates in 1st round
meetings, public and partner pitching events Istanbul / Izmir / Ankara
• Selects 2nd round candidates
• Supports continuous improvement of startup selection process
• Lead Investor
• Elected from BIC Angel Investors of respective startups
• Takes lead in mentoring, coaching and supporting founders
• Initially weekly, later at least monthly meetings
• Represents BIC Angel Investors in startup, coordinates cooperation
• Becomes nonexecutive member of BoD, protected by BoD insurance
• Invites to, and runs monthly founder-investor business development
meetings
6 BIC Angels Investments 08.12.2014
Out of 100 Startups
seeking investment
• The ones which are elected after a 2-3
minute presentation • 30 minutes evaluation 60 red 40
• 3 hours evaluation 25 red 15
• Fullday evaluation 10 red 5
• Terms-conditions 3 red 2
• GO AHEAD ……..........................2
Source : Prof. Erhan Erkut MEF Üniversitesi; BIC Angel Investor Seminar
13.Nov.2014
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Investment Criteria….of Projects
Main consideration: Founder‘s capabilities
- Capable, skilled and, if possible, experienced team (preferred 2-3 founders)
- Willing to listen and share no ego, open minded , transparent
- Full commitment and low salary expectations necessary,
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Markets
Business Model
Life Cycle Financing
Acceptable Valuation
Capable Founder &Team
Added Value
Sustainable and scalable business model targeted
- Supporting lean startup approach, start with minimum viable product (MVP)
- Proven and tested business model before spending for marketing & sales
Startup financing
- Startup / early growth (first round) financing preferred
- Seed financing in exceptional cases
Valuation in line with current Turkish market conditions
- Target post-money valuation start up financing: 1-2 Mio TL
- Deviations for seed financing (-) / Early growth financing (+)
Investments into Turkish Internet / ecommerce /other markets
- Criteria: Market size, market growth, entry barriers, global reach
Cooperation with BIC Angel Investments adds value to the venture
- Cash injection can push business
- Mentorship and support services can add significant value to the business
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Stage 1: Sourcing and Initial Screening
9 BIC Angels Investments 8/12/2014
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Stage 2: First Pitch and First Analysis
10 BIC Angels Investments 8/12/2014
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Stage 3: Second Meeting / Full Analysis
11 BIC Angels Investments 8/12/2014
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Main Reasons for Failure
12 BIC Angels Investments
Source: Kuratko, Entrepreneurship – Theory, Process, Practice, p.2 68
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