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Technology startups: how to and lessons learnt

Chania 05/02/2016

Apostolos Apostolakis

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ENTREPRENEUR – ANGEL INVESTOR

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…LEADING TO ADVISING A VC

A Venture capital firm specializing in SAAS , e-marketplaces and Adtech

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AGENDA

HOW TO DECIDE ON A VENTURE

LESSONS LEARNT/ SUGGESTIONS FOR ENTREPRENEURS

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6 QUESTIONS TO ANSWER

1 What is the product

2 Pain solved/benefits of product

3 Market size/competition

4 Team

5 Go to market plan/Investment required

6 Exit

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1 WHAT IS THE PRODUCT

Short and to the point description Everyone is lazy with limited attention span

Elevator pitchWhat is e-table.gr?

It is a web and mobile service that allows you to discover new restaurants, gain discounts and reserve a table with instant confirmation

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2 WHAT IS THE PAIN SOLVED/ BENEFITS

CONSUMER

Discovery

Screened and rated beauty salons

Convenience

BEAUTY SALONS

New Customers

Brand management

Reservation management (CRM)

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I LIKE PRODUCTS THAT SOLVE SIGNIFICANT PROBLEMS

Importance of problem solvedLow High

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3 MARKET SIZE AND COMPETITION

Market size 13,000 taxis In athens :200,000 daily rides

10% penetration means market is 20,000 rides per day Revenue per ride @0,75euros annual projected

sales @5 mil euros

Competition Radio dispatchers Consumer habits

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4 TEAM

BEFORE STARTUP DURING STARTUP

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4 TEAM

1 Complementary skills ΙΤ (Web development) Marketing Sales/Business development

2 Trust the team regarding Capabilites Ethos Commitment to the project

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WHAT AN INVESTOR LOOKS FOR IN A FOUNDER

FOUNDER SHOULD HAVE THE SKILLS

To build a 10-20 million euro business

To hire (and fire) and motivate 20-50 people

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SOFT SKILLS BUT MOSTLY CHARACTER

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5 GO TO MARKET PLAN

Product development• Web/mobile development

Marketing and Sales plan• Sales to the consumer• Sales to build merchant supply

Operations plan• Customer support• Merchant support

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5 REQUIRED INVESTMENT

Web and mobile platforms 50,000 eurosSales to doctors 30,000 eurosMarketing to consumers 70,000 eurosRunning expenses until first milestone 50,000 euros

Total angel round investment 200,000 euros

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6 EXIT

Sale to industry player

Sale to a private equity

IPO (for multinational companies)

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AGENDA

HOW TO DECIDE ON A VENTURE

LESSONS LEARNT/ SUGGESTIONS FOR ENTREPRENEURS

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CAPABILITY- AMBITION - OPPORTUNITY

All people

Driven/ risk taker

Capable

Willing to Pursue a big opportunity

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REVENUE CUTOFFS BASED ON INVESTOR

Investor Type Revenue potential cutoff

Family 0<

Friends/ Individual Investors 1,000,000<

Angels 5,000,000<

National Venture capital 20,000,000 <

International Venture Capital 50,000,000<

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LOCAL IS SMALLER BUT EASIER…

Revenue

Potential

Effort required (capital, resources, stress )Low High

High

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REVENUE CUTOFF FOR INVESTORS

Revenue

Potential

Effort required (capital, resources, stress )Low High

High

Cutoff

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THEN CHOOSE YOUR INVESTOR

Based on

1) Relevancy (industry /functional experience)

2) Capital availability (follow ons)

3) Chemistry

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IF YOU APPROACH AN INVESTOR DO NOT…

1) I have an Idea…

2) I don’t know how big this is

3) I don’t if there is competition

4) I cant find team members

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DO YOUR HOMEWORK…

Idea/ProductMarket size

Go to market plan

Operational needs + Capital needs

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… IT SHOWS RESPONSIBILITY TO YOURSELF AND YOUR LISTENER

Build credibility

Respect other people’s time

CREATE A CONCISE PRESENTATION

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CLEARLY DEFINE YOUR MARKET

TOTAL taxi market in Greece

Is 500 mil euros

Intermediation market

@10%

50 million

Market share @10%

5 mil

Actual market size

Total market Expected revenue

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AN IDEA IS WORTHLESS

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IF EXECUTED POORLY

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ADVANCE YOUR IDEA TO PRODUCT ON YOUR OWN

Seek funding at the latest possible stage

Faith in your product Less dilution

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KEEP IN MIND

Startup is a marathon sprint

Persistence and insistence

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IT TAKES TIME …

2 years

1 year

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RESOURSES

Angelist (investment presentations)

Crunchbase (valuations)

A16z.com (knowledge)

Ycombinator (knowledge)

Clarity.fm (expert advice)

Competition news and analyses

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USEFUL SERVICES

Mail marketing and marketing automation

Referal programs and growth hacking

Facebook management campaigns

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YOU WILL OVERCOME THE ROADBLOCKS

Success

Time

Temporary low points/ fails

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