The Basics of VC The economics of an early-stage VC-fund PointNineCap @ Pirates on Shore Poznan - June 2014 early stage An intro to
An introduction to the basics of Early-Stage-VC
Aug 23, 2014
An introduction to the Basics of Early-Stage-Venture Capital
The economics of an early-stage VC-Fund
PointNineCap @ Pirates on Shore Poznan June 11th, 2014

The economics of an early-stage VC-Fund
PointNineCap @ Pirates on Shore Poznan June 11th, 2014

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The Basics of VCThe economics of an early-stage VC-fund
PointNineCap @ Pirates on Shore Poznan - June 2014
early stageAn intro to
Agendacześć
About Us
Intro to Venture Capital
About us@PointNineCap● Berlin-based, 2011● 45mEur, 2 funds● Seed & Series A (500k-1m €)● Europe & North America
@Mathias● Made @ Wuppertal (DE)● Business/Finance Studies @
ESB (DE) & Neoma (FR)● Ecommerce @ OTTO (DE)● Consulting @ Deloitte (SA)● VC @ Mountain Partners (CH)● M&A @ Naspers (CH/CEE)● VC @ PointNineCap● Mentor/Supporter @ Seedcamp,
LauncHub and Kisura
Sources of Startup financingIntro to the basics of early stage VC
Idea Startup Early Maturity Growth
Equi
ty
Clients
Crowdfunding
F&F
Accelerators
Angels
VC
Private equity
IPO
DebtExte
rnal
✓ Validate opportunity✓ Sustainable✓ “Easy”✓ Feedbackx Requires productx Risk of funded competitors
Clients: 4 Business Models
Supply Demand%
Software Users$
Product Customers$$
SaaS
Marketplace
eCommerce
Intro to the basics of early stage VC
Venture Capital: StagesPros:
✓Less maturity✓Quick growth✓Knowledge
Cons:
x Distraction, Effort, slow and hardx Less controlx Addictive
Intro to the basics of early stage VC
How does it work
1Closed fund(+) 40mEur
0 Institutional investorsPension funds
2FocusStage, Geography, Segment etc.Seed, West, Internet
3 Investments(ie. seed, 500k for 15%)
4Support growthStrategy, hiring, etc.
5Exits100mEur
6Allocation40mEur + 80%
85mEur -> founders15mEur -> fund
First 40mEur to
investors.
Next: 20% to fund
(carry), 80% a
investors
Intro to the basics of early stage VC
How does it work (ii)Maths
Fund size 40mEurGoal x3 cash-on-cashExits proceeds 120mEurAvg Ownership 15%Exits req. 800mEur
● Investments 40● Hit rate 33% hits
Requirements
● Big market = international!● Great team and ambition= full-
time & main occupation!● Fast growth = scalable!● Sustainable position =
Sustainable comp advantage!
Exit requirement (rule of thumb): x5 fund size
Intro to the basics of early stage VC
Fund Duration
time to build & sell a company: roughly 7 years→ average fund duration 7-10 years
How does it work (iii)
3y 5y 7y 10y
Investment Period Divestment Period
Extension Extension
Intro to the basics of early stage VC
How does it work (iv)Intro to the basics of early stage VC
→ Every investment needs to have “fund-maker” potential
Out of a hypothetical portfoliothat consists of 10 companies...
Intro to the basics of early stage VC
Relevant players (incomplete excerpt)
Intro to the basics of early stage VC
Questions? Feedback?
If you want to stay in touchwww.pointninecap.com
+ Some say we have a pretty cool newsletter! ;)
Follow us on Twitter and facebook@PointNineCap | /PointNineCap
[email protected] | XING | facebook | Angel.co
Thanks!
Further Reading● www.pointninecap.com
● Christoph’s Blog - The Angel VC (Partner at .9$)
● Pawel’s Blog (Partner at .9$)
● CB Insights on Berlin’s Startup Ecosystem
● European Tech Exits
● VentureLoop-Jobs @ Point Nine Family & Berlin Startup Jobs
● The Economist about Tech Startups (in Europe)
● The Economist - Comeback Capital: Venture Investing in Europe
● VentureBeat about Point Nine Capital
● WSJ about Michael Wolfe & Point Nine
● TechCrunch - Vend raises from Peter Thiel
● WSJ - Clio raises from Bessemer Ventures
● TechCrunch - Zendesk’s stellar IPO
Intro to the basics of early stage VC
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