Startnowhow - Stage Financing for Ventures
Transcript of Startnowhow - Stage Financing for Ventures
INTR
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StartNowHow
• Open seminar series for active and prospective entrepreneurs
• 10 sessions on monthly basis until summer 2016
• Covers relevant theoretical and practical aspects of entrepreneurship
• Based on lecture „entrepreneurship“ @Bogazici University
• Based on experiences of entrepreneurs, investors, mentors and consultants
• Each session with guest speaker (entrepreneurs, investors, mentors, etc.)
• Language: English / Turkish
• Thursdays 17.15h – 19.30h
• Next session: Thu 12. May 2016
• Topic: The Investment Process – Pitching, Negotiations and Termsheet
• Certificate provided for participants joining at least 70% of the sessions
• Early registration for each session required (eventbrite), limited capacity!
• Priority for regular participants
Startnowhow – Seminar 8 13.04.2016 2
INTR
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StartNowHow - Seminar Topics (preliminary)
1. Thu 1.10.15: The entrepreneurial ecosystem in Turkey
2. Thu 15.10.15. Entrepreneurship as a profession
3. Thu 12.11.15: Opportunity recognition and evaluation
4. Thu 10.12.15: Planning, developing and testing a business model
5. Thu 7.1.16: Market and competitor research
6. Thu 11.2.16: Financial planning for startups
7. Thu 10.3.16: Digital Marketing planning and control
8. Thu 14.4.16: Funding the startup – stage financing for ventures
9. Thu 12.5.16: The investment process – pitching, negotiations and termsheet
10. Thu 9.6.16: Success and failure as an entrepreneur
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Initial New Venture Losses
13.04.2016 4 Startnowhow – Seminar 8
Source: Timmons, J.A./Spinelli, S., New Venture Creation, p.427
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Low-Budget vs. Big-Money-Models
13.04.2016 5 Startnowhow – Seminar 8
Source: Volkmann, C.K./Tokarski, K.O./Grünhagen, M., Entrepreneurship in a European Perspective, p.291
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Life Cycle Financing
13.04.2016 7 Startnowhow – Seminar 8
Source: Timmons, J.A./Spinelli, S., New Venture Creation, p.433
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Business Failure Rates
13.04.2016 9 Startnowhow – Seminar 8
Source: Shane, Ihe Illusions of Entrepre-
neurship, New Haven / London 2008
US study UK studies
Source: Stokes / Wilson, Small Business
Management, p. 87
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Lemons and Pearls
13.04.2016 10 Startnowhow – Seminar 8
Source: Timmons / Spinelli, New Venture Creation, p. 158
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Venture Life Cycle and Target Returns
13.04.2016 11 Startnowhow – Seminar 8
Source: Leach, J.C./Melicher, R.W., Entrepreneurial Finance, p.255
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BIC
• Agreement BIC – Investors
• BIC Angel Investments is a brand of BIC Behrendt International Consulting A.Ş., owned 100% by Joachim Behrendt
• BIC provides angel investment services but does not invest itself
• Joachim Behrendt invests himself alongsinde other BIC angels
• Interested investors enter into a service agreement with BIC
• By invitation only / ends anytime one party decides not to continue
• Contains limited confidentiality provisions
• Exptected (but not obligatory): At least two investments per year, minimum ticket size normally 25,000 TL
• Angel Investments
• Investors invest directly into the startup and become shareholders in A.Ş.
• All BIC angels (including Joachim Behrendt) belong to the same shareholder group in proportion to their investment, protected by minority rights
• Termsheet and definitive agreements (template-based) are provided by legal advisors of BIC, quick agreement with startups targeted
• BKS application process for startup handled by BIC
12 Startnowhow – Seminar 8 13.04.2016
BIC Angel Investment Network: Legal Framework R
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Investment Process of Business Angels
13.04.2016 13 Startnowhow – Seminar 8
Source: Volkmann, C.K./Tokarski, K.O./Grünhagen, M., Entrepreneurship in a European Perspective, p.300
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VC‘s Organizational Structure
13.04.2016 14 Startnowhow – Seminar 8
Source: Smith, J.K./Smith, R.L./Blisss, R.T., Entrepreneurial Finance, p.90
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VC Capital Investment Process
13.04.2016 15 Startnowhow – Seminar 8
Source: Smith, J.K./Smith, R.L./Blisss, R.T., Entrepreneurial Finance, p.95
VA
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• $3.5m investment in a company
• Expected to earn $2.5m per year in 5 years
• VC expects to make 50% per year on invested capital
• Comparable companies trade at 15X price / earnings ratio
The VC Valuation Method - Example
Source: Bürkan Beyli, Buran Ventures
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New Venture Valuation: Market Multiples
13.04.2016 17 Entrepreneurship
Source: Grichnik, D./Bretttel, M./Koropp, C./Mauer,R., Entrepreneurship, p.101
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• The VC must own enough to realize 50% return per year
(1 + 0.50)5 x ($3.5 million) = $26.6 million
• After five years, the company is expected to be valued at
15 x $2.5 million = $37.5 million
• $ 26.6 / $ 37.5 = 70.9%
• Implied (post-money) valuation today:
$3.5 million / 70.9% = $4.9 million
The VC Valuation Method- Example (2)
Source: Bürkan Beyli, Buran Ventures
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K StartNowHow - Outlook
• Today‘s materials will be made available to participants for downloading
• Next Seminar: „The investment Process – Pitching, Negotiatons and Termsheet“
• Guest Speaker: Mehmet Onarcan, BIC Angels / Mentors Network Turkey
• Thursday, 12.5.2016, 17.15 – 19.30h
• Don‘t forget to register early (eventbrite) - capacity 50 people!
• Priority for participants / registrants from today‘s session
• General rule: Allocation of seats according to participation
• Regular participation = certificate (70% participation)
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BIC ANGEL INVESTMENTS Dr. Joachim Behrendt
Phone: +90 212 328 1939 Fax: +90 212 328 1933
www.bicangels.com http:/twitter.com/joachimbehrendt http://tr.linkedin.com/pub/joachim-behrendt/18/706/a7a
Email: [email protected]