funding and ecosystems for startups

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FUNDING- AND ECO-SYSTEMS FOR START-UPS (ICT ) JAN VORSTERMANS MANAGING PARTNER VENTUREWISE

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Page 1: Funding and Ecosystems for Startups

FUNDING- AND ECO-SYSTEMS FOR START-UPS (ICT)

JAN VORSTERMANSMANAGING PARTNER

VENTUREWISE

Page 2: Funding and Ecosystems for Startups

2

BACKGROUND: LIFE SO FAR General

o Born 25 March 1960o M.Sc. Telecom Engineering from Ghent University

Careero 1984 – 1989: R&D at Ghent University at Siemens (Nokia)o 1988 – 1994: Business unit management and business development at Telindus (Proximus)

and Nynex (Verizon)o 1994 – 2002: Operational, commercial and general management at BT Globalo 2003 – 2013: COO Telenet

Founder Qunova and Qunova Projects Co-founder VentureWise Founding Partner Volta Investor in Limecraft, Kinetura, Viloc, Moovly, Steampunk Wizards, Rabt, Skelia, Valle

Verde Non-Executive Director Invitel and Option, ex-board member iMinds

Page 3: Funding and Ecosystems for Startups

HAVE STARTUP STOP NEED MONEY STOP PLEASE HELP STOP

Page 4: Funding and Ecosystems for Startups

THE PROBABILITY OF START-UP SUCCESS IS LOW, WE NEED PROGRAMS THAT ENHANCE PROBABILITY OF SUCCESS Many start-ups, many with similar ideas and great teams Starting up is hard, 60 % of tech start-ups don’t survive (4 year horizon) It is OK to fail (early) Success = having a growing profitable business 1 / 40 000 become unicorn

No market needOut of cash

TeamOutcompeted

Pricing/cost

40%29%

23%19%18%

Top reasons for failure:

77% product/market fit

29% burn rate

Page 5: Funding and Ecosystems for Startups

SUCCESSFUL ENTREPRENEURS ARE MOST OF THE TIME NOT UNIVERSITY DROP-OUTS

Choose a job you like, and you will never have to work a day in your life (Confucius)

40Average age when they started their business

1%Come from rich or poor backgrounds

75%

75%

Worked as employees in other companies for more than 6 years

Ranked in top 30% at school and university

60%Started own business because standard work environments did not appeal to them

Page 6: Funding and Ecosystems for Startups

ARE WE SELECTING THE RIGHT START-UPS FOR INCUBATION AND ACCELERATION?

Choose a problem that agitates the crap out of

you

Make sure you are the right person to solve the

problem

Find the team with which you want to go to war

Define your strategy and funding requirements

Bootstrap the business as long as

possible

Page 7: Funding and Ecosystems for Startups

DO WE ALWAYS NEED TO PUSH FOR EXTERNAL (RISK) INVESTMENT?

Investors do not grow on treesGrowth & comfort don’t co-exist

People matterExternal funding means validation and valuation

… and risk/reward sharing

AmbitionBusiness Market Risk

Page 8: Funding and Ecosystems for Startups

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THE NATURE OF EARLY INVESTMENTS IS CHANGING, THIS REQUIRES EVEN MORE GUIDANCE

Page 9: Funding and Ecosystems for Startups

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WHERE CAN WE FIND CAPITAL IN THE EARLY STAGES OF DEVELOPMENT

BootstrappingFF&F

GovernmentBusiness AngelsIncubatorsCorporate FundsVC

Inception

+++++++++

+++------

Product/MarketFit+++

+++++

----

Scale-up

---

+/-+/-+/-

Crowdfunding ++ ++ -

+/-+/-

Funding Gap

Promising

Page 10: Funding and Ecosystems for Startups

10

HELP THE START-UPS TO RAISE CAPITAL FROM PROFESSIONAL INVESTORS: TEACH

1. Be honest (to yourself)2. Know the business and …3. … the market (data, competition,

business models, benchmarks)4. Have a plan, no window dressing5. Identify/know potential investors6. Get an introduction, find allies7. Investors are extremely busy8. This is a sales job,9. No does not mean out10.First pitch to investors who are likely

to be negative

Ensure VCs (that invest early) are part of your eco-system

Page 11: Funding and Ecosystems for Startups

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BE CAREFUL WHAT YOU TEACH. THERE IS DATA, AND THEN THERE IS MORE DATAThe Entrepreneur Thinks:

The Presentations Says:

The Investor Thinks:

Everybody will want to buy our product

Our projections are conservative

We will have to take significant haircuts

This product version is really good

The product is ready This product will have to be reworked

The market is really big Our market will be 50 billion in 2017

They don’t know where the market is

I hope nobody knows the competition

There is no competition in this space

They don’t know the competition

Our technology is complex Our solution cannot be copied

(Almost) Everything can be copied

A few investors expressed an interest

We have many investors lined up

We are the first investor they speak to

I like our team We have a proven management team

I see limited experience

This person at the Fortune 50 company said they would sign

We will soon sign-up a Fortune 50 company

In your dreams

We are just to clever and agile compared to large companies

The large companies are too slow/dumb

Ever been eye to eye with an elephant?

Page 12: Funding and Ecosystems for Startups

12

CROWDFUNDING AS ALTERNATIVE?

Page 13: Funding and Ecosystems for Startups

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KEY TRENDS IN CROWDFUNDING

Everybody can be an entre-preneur

• European markets are underdeveloped• Regulation is key to success• Crowdfunding is mainly a local activity• Crowdfunding is hard: 70-80% of cam-

paigns fail (US)• Global crowdfunding is growing 100%

yoyBELGIUM Rewards Equity

Amounts Raised 10-25 k€ 150-250

k€

Average Investment 85 € 700 €

Average Duration

30-45 days

45-60 days

Page 14: Funding and Ecosystems for Startups

14

ENTREPRENEUR.

Page 15: Funding and Ecosystems for Startups

FLANDERS INNOVATION ECO-SYSTEM

Page 16: Funding and Ecosystems for Startups

FLANDERS INNOVATION ECOSYSTEM

Micro-electronicsCleanTech

ICTBio-tech

5 University Partners

Government

Corporate Partners

Page 17: Funding and Ecosystems for Startups

iMINDS: FLANDERS’ ICT RESEARCH AND ENTREPRENEURSHIP HUB

DIGITAL RESEARC

H

BUSINESS INCUBATIO

N

Strategic research

Applied research

Spin-offs

Global expansionfor tech businesses

Start-up supportfor entrepreneurs

Living lab research

European research projects

Page 18: Funding and Ecosystems for Startups

iMINDS SUPPORTING TECH BUSINESSES

iDiscover Business Opportuni-

ties

iBootDraft Business Proposition

iStartLaunch Start-up Company

Go GlobalGrow Com-

pany

INCUBATION

START-UPSfrom incubation program

120+

PROJECTSWit the industry

PROJECT PARTNERS

380+ 1100+

PUBLICATIONSYearly

RESEARCHERS

1000+ 850+

R&D PROJECTS

Page 19: Funding and Ecosystems for Startups

19

BELGIUM: START-UP COMMUNITIES

5 years5 000 start-ups100 000 jobs

Page 20: Funding and Ecosystems for Startups

VENTUREWISE: A GROWTH ECO-SYSTEM FOR ICT START-UPS

Page 21: Funding and Ecosystems for Startups

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VENTUREWISE ?A balanced team strongly embedded in the Tech Eco-system

Jan VorstermansCorporate & ManagementTechB2BInternationalInvestor

Brendon GrunewaldEntrepreneur & Start-upM&AB2CInternationalFund Management

Bart BecksCorporate & ManagementEntrepreneur & Start-upInternational marketingB2CTech

Kenny WillemsIncubation/AccelerationOrganization/ProcessCFOB2BInnovation

Digital Media

IoT

Enterprise Software

Market Places

The most connected “Godfathers”

Page 22: Funding and Ecosystems for Startups

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FINANCING GAP BETWEEN INCUBATION/SEED AND LATER STAGE FUNDING IN EUROPE

Incubate Seed Later StageScale-up

Limited funding options in the scale-up phaseStart-ups need more than money

IncubatorsAcceleratorsGovernment

AngelsCrowd

PEVC

Corporates

(50-100k€) (100k-500k€) (500-2mio€) (+1mio€)

Consequences: Startups move very early to US Promising startups fold or are overrun due to insufficient funding Startups pivot to service-orientated companies

Page 23: Funding and Ecosystems for Startups

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VENTUREWISE ?

Fund Zero Fund 1 Studios Enterprise

Digital Media

IoT

Enterprise Software

Market Places

ECO-SYSTEM

ResourcesSkeilaInThePocketDreams & CreationGrowthGurus

IncubatorsiMindsBetaCoWorkRocketInternetAtelier

Special ServicesCrescoAngel.meBootstrapLabs

Corporates

Page 24: Funding and Ecosystems for Startups

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VENTUREWISE AS INVESTOR - KEY DIFFERENTIATORS

Our growth Ecosystem

• Partnerships with high-quality resource & service providers, working at favorable fees

• Equity for resources

Our investment strategy

• Early Stage: both Seed (100-500k €) and Scale-up (up to 1,5mio€)

• “Spray, not Pray”• Capital efficient deals• Data-driven decision-making for investments

Our team • Entrepreneurs for Entrepreneurs• Extensive expertise & network in the selected focus areas

“Hot” focus areas• Correspond with current breakthrough trends in Tech• Significant follow-up investment opportunities• Good exit potential (M&A)

Geographical reach

• Know-how of and access to various EU-countries (beyond BeNeLux)

• Scaling partners in USA & South-East AsiaFund kickstart • Integration of existing portfolio of investments (“fund 0”)

Page 25: Funding and Ecosystems for Startups

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VENTUREWISE – ANGEL.ME (CROWDFUNDING) PARTNERSHIP With VentureWise:

Advice and hands-on support Access to the eco-system Direct Investment from 100K – 2 Mio

Too early? Crowdfunding via Angel,me Combines rewards + equity Proprietary technology International partner network Guidance and networking (angel.me sessions and summit) Supporting platform partners: lower fees, more support

Page 27: Funding and Ecosystems for Startups

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THE VALUE OF LARGER ECO-SYSTEMS HAS BEEN DEMONSTRATED

HOW?

The Rules from FastCompany#1 Don't Be a Chihuahua#2 Don't try to take more than your

fair share of the pie#3 If you're invited to a wedding,

don't outshine the bride or groom#4 Don't Be a Two-Timer#5 Give to Get#6 Be like Fonzie#7 Don't be a douche bag

My 5 rules for (tech) eco-systems:

1. The power of the ecosystem = N!2. An eco-system requires energy to sur-

vive3. Successful business models get copied4. Cooperation, win/win, open data5. From R&D to customer involvement