What I have learned from working with entrepreneurs (and being one), with VCs and angels in Europe, why we are different to our US counterparts and why this *may* matter.

1. Fundraising in Europe
10 non-textbook lessons for
entrepreneurs
Maria Dramalioti-Taylor
Managing Partner
x.Million Capital Ventures SA
07.11.2012
x.Million Capital Ventures
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2. Agenda
• Venture/Angel Capital:
– How to decide if you need it
– How to navigate Angels & VCs
• On raising Capital in UK/EU
UK Entrepreneur: “Why bother? I am off to the US”
UK Investor: ”Go, but not before you see this…”
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3. #1 - Sell shares only when you need SPEED
ENTREPRENEUR HAS… …AND NEEDS…
…money to move
1 *FASTER* than OWN
Original
THEREFORE FACES…
capital allows
idea …intensifying
competition
2 …SO SELLS shares to
Best-in-market to pay for..
founding team
Hiring
3 Faster product
development
Large potential
Infrastructure
market
Commercialisation
Geographical expansion
x.Million Capital Ventures
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4. #2- Know your place in the FUNDING SPECTRUM
NET CASH
POSITION
Grants Venture Capital Venture Capital
Bootstrapping Angel Capital Series A Series B,C,D
Family (€2m-€20m) (€5m-€20m)
Venture
Debt
+
- Closed Public SCALE STAGE
ALPHA BETA
1st Revenue
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5. DO IT LIKE A JACANA
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6. #3 – Decode the Business Angels
• Angels invests own money
Angels are • Small amounts, early, at
low valuation
like women: – €10k-€250k at
temperamental valuation €0.5-€2m
& (mostly) • Exit:
– sell at €5-10m
irreplaceable valuation & make 1.5-
3x
– bring VCs, get diluted
(may) make 5-10x
• AIM: 2x capital (but
mostly get capital back)
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7. #4 – Decode the Venture Capital business
• VCs raise a fund every 2-4
years
VCs run a – Invest other people’s money
business.
• Invest the funds over 5 years
They make it • Exit (sell) via M&A or IPO
• They take:
sound like – 2.5% pa management fee on
funds managed
Black Magic. – Carry = 20% x [Total Return at
Exit] – [Total Amount
IT IS NOT. Invested]
• AIM: ONE 10x home run
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8. #5 – γνῶθι…τω επινδυτή
Angels may
not let
you fail,
VCs may
give you a
big
success
SOURCE: www. http://www.instigatorblog.com
x.Million Capital Ventures
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9. #6 - Series “A” Crunch: MIND THE GAP
+
NET CASH POSITION
Closed Public SCALE
- ALPHA BETA
STAGE
1st Revenue
DISCONNECT
ANGEL /VC
VC
ANGEL CAPITAL
€ 500k € 2m
x.Million Capital Ventures
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10. #6 - Series “A” Crunch in NUMBERS
Germany & UK are more affected by the VC/AC disconnect
ICT Deal volume per deal size bracket
16,000 900
US , 14,339
800
Deal Volumje ( non US)
14,000
Deal Volume (US)
12,000 700
UK
600
10,000
500
8,000
US , 5,585
400
6,000 US , 4,705
300
4,000 Germany
200
2,000 100
- Russia -
< $ 0.5M $0.5M - $2M >$2M
Source: Data from ThomsonOne, Period: 10 years
x.Million Capital Ventures
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11. NOTE: The blurring of AC/VC in the US is coming
to Europe (maybe)
www.dramalioti-taylor.org
x.Million Capital Ventures
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12. #7 – A new taxonomy of investors
#Venture Accelerators
Astia (for female geeks) Aim for the one that suits
Seedcamp your needs best
Interesting blog:
Springboard http://disruptivegrowth.wo
Accelerator Academy rdpress.com/2010/10/14/do-
500 stratups accelerators-help-raise-
Y-Combinator funds/
….
# Super Angels
AngelLab
AngelList
# The NEW lean VC
They treat every entrepreneur as an individual
x.Million, EC1 CAPITAL et al.
x.Million Capital Ventures
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13. #8- Connect the fundraising dots
“what they offer”
Fight the vs.
information “what you need”
asymmetry
– Initial capital per idea
Sources – Sector focus: do they
www.thefunded.com understand it?
www.fredestin.com – Risk tolerance: can they
venturehacks.com deal with uncertainty?
earlystageadventures.com – Compatibility: will their
www.adventurista.com pride suffer if you fail?
– Terms (& strings attached)
x.Million Capital Ventures
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14. Agenda
• Venture/Angel Capital:
– How to decide if you need it
– How to navigate the VC scene
• On raising Capital in UK/EU…
UK Entrepreneur: “Why bother? I am off to the US”
UK Investor: ”Go, but not before you see this…”
14

15. #9 - The US VC is prone to “bubbles”, when they
burst startups become orphaned
US VC is big &… … some say already in a “bubble”
Investments per
capital in US is
5.8x higher than EU
US EU
0.15% 0.026%
5.8x
GDP
GDP
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16. #9 – US VCs face an IPO crunch
CBOE @ 06.11.12:
IF Index >30
THEN
IPOs drop
dramatically
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17. #9 – Startups in the US need 2x avg. capital to
build £100m business
EU = 1/2 x USA
Source: Early Bird Ventures, 2012
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18. #9 – US tech acquisition of EU
companies is a well travelled road to exit
#US tech companies hold record offshore cash
100%
80%
60%
40%
20%
0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
EU acquisitions by US companies non EU acqusitions by US companies
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Source: Zephyr M&A, 2012

19. Go. See. Come back.
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20. # 10 - EU Growth drivers to ride on
The $172bn eCommerce market in Europe will grow 1.7x
between 2010-15
eCommerce ($bn)
EU5: 1.7x in 5 Yrs
$172 bn <
10% of EU-5 retail EU-5 EU-5
$172 $292
2010 2015
x.Million Capital Ventures
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21. # 10 - EU Growth drivers to ride on
EU-5 Mobile Ad spending will grow 10x between 2011-2012
(2x as fast as in the US)
Mobile Ad Spending (mn)
$ 1,2 9 9
EU5 growth: 10x in 4 Yrs
$ 12 2
2011 2015
x.Million Capital Ventures
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22. # 10 - EU Growth drivers to ride on
Internet of Things:
The ratio of Devices /Humans is expected to grow 3x by 2020
2011: 2020:
8.99bn connected devices
1.8 connected devices 24bn connected devices
per person 6.6 connected devices per person
0.1 0.62
1.73 1 0.88
6.52 10.71 11.86
Fixed ( excl POTS) Mobile Short Range Other ( MAN, Satellite)
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23. Wireless connectivity flattened our world
85% of worlds population
covered by wireless signals
vs
80% of world population
connected to the electrical
grid
Source: Mary Meeker, KPCB, 2012
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24. Your turn
to talk
x.Million Capital Ventures
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25. European consumers are shifting online…
United States
Internet Users
90M
150M
East & West Europe
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26. European consumers are going mobile fast …
East & West Europe
Mobile Subscriptions
United States
2004, Mobile subscriptions
EU > US
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27. …and are more social than most
2x
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