How a startup should deal with investors Venture ideas @ETH – 7 th November 2013 Redalpine Venture Partners Ltd, Pfingstweidstrasse 60, 8005 Zurich, Switzerland, +41 44 271 15 30, www.redalpine.com early stage investments by entrepreneurs NICOLAS BERG
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Serial entrepreneur with 10 start-ups (1984-2011) - e.g. founder of Borsalino 1998, sold 2000 at 20x multiple to Ringier- iCEO Sharoo June-September 2013
Full time angel investor in 16 start-ups (2000-2006) - e.g. Investor & Country Manager XING 2004-2010
IPO at 30x multiple 2006 Partner at Redalpine Venture Partners (since 2007)
- Built a portfolio of 20 European high innovation start-ups with Redalpine Capital I & II
- 5 portfolio companies ranked among 13 Swiss top start-ups in 2011
Lecturer, journalist and jury member- Teaching students & entrepreneurs at venturelab.ch since 2006- Jury member of business plan & seed money contests (Venture kick,
A typical successful Top-10-Swiss-Startup 2013 2/3 from Zurich or Lausanne 20 out of 26 founders were not Swiss! 80% ICT, Life Science or Electronics 2/3 with links to ETH, UZH or EPFL
A typical successful Top-10-Swiss-Startup 2013 2/3 from Zurich or Lausanne 20 out of 26 founders were not Swiss! 80% ICT, Life Science or Electronics 2/3 with links to ETH, UZH or EPFL
What’s ambitious & successful?B2C/P2P: 1% of above numbers x CHF 100 = ?
8m Swiss200’000 Swiss millionaires2000 Active angel investors40 professional full-time angels10 really successful angels5 deal proposals per day 5 deals done per year = <0.5% probability for each deal proposal
I follow the lead wolf (brand name) in my investor network, and I avoid startups in fundraising mode since >9 months
I go for the hockey stick ORI don’t want to loose any investment
As soon as there is a gap to the plan I quit ORas soon as there is good news I invest more
If there are no news for several months I expect bad news ORIf I get good & bad news instantly my confidence rises
Founders that follow each of my advises have no clew ORfounders that never listen are autistic
Good people help the weak and poor OR professional investors focus on strongest portfolio companiesCopyright Redalpine Venture Partners AG, Switzerland 31
Identify best investors for your startup
Best exits in your sector last 5 years? Identify investors and founders of those startups!
Which top investors are close to me (1-2h by car/plane) and have an affinity to my market and idea?
Which investors have resources just now? (time, money; stage ofinvestment portfolio, last closing or exit)
Check references on investors contacting portfolio companies
Only best investors are good enough for ambitious startups
Ambition level of founder and investor must match (1b, 100m, 10m exit goal?)
Always pitch for & negotiate with 2-4 alternative investors Copyright Redalpine Venture Partners AG, Switzerland 33
Examples for good early stage VCs
Switzerland Index Ventures, Geneva Brains-to-ventures, St. Gallen Redalpine Venture Partners, Zürich VI Partners, Zug/Morges Creathor, Zürich/Germany Innovationsstiftung SZKB, Schwyz
European early-stage VCs Atomico, HTGF, Earlybird, Sofinnova, Eden, Partec,
Wellington …
Superangels & Fresh Angels (entrepreneurs with a good exit)
Tailor made approach, do research first (portfolio CEO’s) Identify door openers in your network to target
- Portfolio companies- Co-Investors- Lawyer, Banker, Incubator, University tech transfer etc.
Phone, Email, Youtube, Powerpoint, Word, Excel… Find out best timing for first contact Never look desperate
- If it hurries it’s often not interesting (except if top investors already arelined up with subscriptions)
Good investors want to discover startups «Didn’t answer my mail» doesn’t mean noCopyright Redalpine Venture Partners AG, Switzerland 36
How do I pitch for investors
Be extremely well prepared (exercise 30x, get feedback!) Enthusiastic, relaxed, competent Simple, simple, simple – reduced to the MAX Only target is to achieve a next meeting
Switzerland: Benefit of Venturelab, CTI coaching, Startup Weekend, actor school, CTI-invest, Venturekick …
Pitch: 10-12 Slides 5-10 Min not smaller than Font 24
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«You miss 100% of the shots you don't take.»
Wayne Gretzky, Hockey legend
«To evaluate the potential of a new idea requires a clear understanding of the market dynamics. We trust in the team of Redalpine to master this challenge successfully.»