how to attract investors - tekes · how to attract investors ... – how to control and balance...

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Gate2Growth is supported by the European CommissionPartner in Greeonvat-EuropeGate2Growth.com

How to attract investors

Thursday, September 14th 2017TEKES Helsinki - Finland

byUffe Bundgaard-Jørgensen Ph. D.

CEO – InvestorNet-Gate2Growth

Gate2Growth.com

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partner in

… and I wrote this book which covers all the elements of this Master Class

…… and by the way, it is useful for both entrepreneurs and investors.

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Gate2Growth is supported by the European Commission

Gate2Growth.com Partner in Greeonvat-Europe

• Links to three short video introductions to my book: How toattract investors – a personal guide in understanding their mindset and requirements.

• How to attract investors – “the power of the four circles”– Youtube link: https://youtu.be/l9D6gpQpQf8

• World Market deception, – Youtube link: https://youtu.be/1RWqhxk4LP0

• Investor mindset,– Youtube link: https://youtu.be/v1OUmv0w1Yg


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Partner in Greeonvat-Europe

CustomersCustomers

Superiorproduct

Superiorproduct

RightBusiness model

RightBusiness model

GoodManagement

Investmentopportunity

”The power of the 4 circles”

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The threat from the “blue line”

Technological obsolete


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My background• MA (econ) & Ph.D. from Copenhagen University & Danish Technical University• Chairman, Danish Energy Regulatory Authority 2004 -• 10 year experience as CEO for Danish Venture Capital Fund• 16 years experience with EU projects via InvestorNet• 2014-16 Chairman for H2020 SME Innovation Advisory Group ( D.G.Research)• 2016- Vice-Chairman H2020 Risk Financing Advisory Group• 2015- Member of Strategic Advisory board for BioBased Industries Joint Undertaking• 2016- Member of the H2020 Advisory Group on International Cooperation• 2014- Chairman for INCOMERA advisory board (Nano- technology calls)

• Founder and CEO InvestorNet – Gate2Growth– InvestorNet is currently partner in 4 different EU projects– InvestorNet provide advise on funding via the H2020 SME instrument , on

business development, funding analysis and investor search and negotiation. Clients from Finland, Italy, Latvia, Sweden, Denmark, Germany, France, Spain,

– Our team currently coach 17 H2020 SME instrument funded companies in Denmark, Norway, Iceland, Italy, Germany, Spain, France and Scotland.


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Investors, Banks & Customers,• When doing business it is wise to know and understand:

– Who are your customers?– The mindset of your customers.– The needs and preferences of your customers.– Which other solutions compete with your solution/product.

• When borrowing money from a Bank, you are the customer!• When selling shares in your company, the Investor is your CUSTOMER

• When selling shares it is wise to know and understand:– Who are the potential Investors?– The mindset of your potential Investors.– The needs and preferences of your potential Investors.– Which alternative investment possibilities are offered to the Investors.


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Investors interest and concerns

• Investors only invest if they believe they can make money!• How to minimize the risk?• How to avoid invest in “Fools” & “Imposters”?

• For an investor, it is also wise to know and understand: – The mindset and ambition of the entrepreneur.– The mindset of potential fellow co-investors.– How to control and balance “fear” and “greed” ?– How to exit from the investment – and make a profit?

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Commercialization of innovation projectsWe normaly say:There are five ways of funding innovation projects:

• The ”Hard way”:– ”Bootstrapping”: Secure that revenues from concultantcy or sales can cover the cost of

the innovation project.• The ”Expensive” way – but also often the intelligent way:

– Convince investors to invest in the company and provide funding for the innovation project , and ”give away” part of the ownership in the company

• The ”Strategic way”:– Convince strategic business or industrial partners to provide funding, either as equity or

in the form of convertible loans or similar financial instruments.• The ”Difficult” way”:

– Borrow in the Bank. - Just try – you will find it is rather difficult. Banks love security –and hate risk. Remember, you will need to repay the loan!

• The ”Smart” way:– Appply for public or private ”Grants”. You do not give away ownership. No need for

repayment of the money, and evaluation criteria focus on opportunities – and if funded it might also attract investors !.

© InvestorNet - gate2growth.com 2017- page : 11

Gate2Growth is supported by the European CommissionGate2Growth.com

The critical circlesTo build a business, conduct the reality checks !

...and the customers shallbe willing to payCustomers /

MarketCustomers /

Market

Superiorproduct

Superiorproduct

RightBusiness model

RightBusiness model

GoodManagement

Business case

Only a competentmanagement team

can deliver

...thereforecompetitor & IPR

knowledge is essential

Customers shallknow about the product – the

business model shall be right, and

it should be easy to deliver

If funding is required , the

offering needs to meet fundersrequiremenrs


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Who is buying, who is using the product –and why ?How about competing solutions ?

• Understand which problem you are solving for the user and the customer.• Identification of the actual customer – who may not be the user!

• The customer is the one making the purchase decision• The user is the one who uses the product / service • Identify the size of the realistic market

• Identification of sales channels and relevant markets• Direct sales, sales via agents or partners

• Understand competition and formulate a price/sales strategy• Does it cover all your cost ? And is it still competitive, and who are

the competitors ?• Formulation of marketing strategy

• USP, choice of business model and foresee competitor reaction.• Execution !

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World market “Home care services”

2 %

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The “EU” market for “Home care services”USA EU ASEAN Americas Other

Public supportedpatients

Hospitals

Private doctors

Insurancecompanies

Private patients

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GermanyScandinavia France Poland Rest of EU


Hospitals

Private doctors

Insurancecompanies

Private patients

Real “EU” market for “Home care services”

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Selected market strategy for “Home care services”GermanyScandinavia France Poland Rest of EU


Hospitals

Private doctors

Insurancecompanies

Private patients


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Market analysis deception

• Statistics are better for world markets.

• Market estimates for regional or local markets are uncertain.

• No information about small market segments.

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Innovators EarlyAdopters

Early Majority

LateMajority

Total assimilation

High tech adoptions cycles

Technologyfreaks:“Try it!”

Visionaries:“Get ahead of the heard!”

Pragmatists:“Stick with the heard!”

Conservatives:“Hold on to what works!”

Sceptics:“No way !”

Main Street

TheChasmGap

”inside the tornado”

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Non-distructive tool for infrastructure preventuremaintenance

USA EU ASEAN Americas Other

Bridges

Tunnels

Railways

Roads

Long term market potential

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Technological obsolete

Too early & technological obsolete

Accumulated cost plunge


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The ”Singer” Patent

The 1834 eye pointed needle sewing machine of Walter Huntwas later re-invented by Elias Howe of Spencer, Massachusetts and patented by him in 1846.

Elias Howe's design was copied by Isaac Singer and others, leading to extensive patent litigation. However, a court battle in the 1850s conclusively gave Elias Howe the patent rights to the eye pointed needle.


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Intellectual Proporty Rights (IPR)

• Patenting considerations– Cost– Policing– Strategic significance

• Freedom to operate analysis

• The value of a patent


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”Freedom to operate” analysis

• The ”Freedom to operate” analysis is important, even if the business case/technology is not fit for IPR protection.– Because

• In some countries (e.g. the US) other ”inventions” than ”technology” can be IPR protected.

• Remember that even if you have ”invented it yourself” someone else might have come to the same solutions and filed a patent!

• A patent provides protection for ”Your Invention” only.– but in order to turn the invention into a product you might need access to a

lot of other technology/solutions – which might be patent protected.


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Result of Freedom to operate analysis

Your Patent

Other Patents

Other Patents

Other PatentsOther Patents

Your Product

Potential infringement issue !


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The Value of a Patent

Cash out

Cash in

TimeNPV

Revenue types:

- Revenue from sales of patented products- License revenues- Strategic sales of IPR- Value of protection from competitors- Other value


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Considerationto

commercializenew

technology

Freedom to

operateanalysis

Decision to commercialize

defineproduct or

service concept

Freedom to

operateanalysis

Patent analysis

Final product / service concept

Continuedfreedom to

operateanalysis

Patent application

Commercial processstarted

ContinuedFreedom to

operateanalysis

Patent issued

Policing

New product versions

Commercial process

continued

New freedomto operateanalysis

Patent policing

Analysis of patentability

Patent process and Freedom to operate

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Business case Industrial chicken productionJyllinge, Denmark

New Business IdeaEcological chicken productionJyllinge, Denmark

New Business Model

Agreement with 3 Michelin *** restaurant to be their supplier of ”super eco-chicken”. Then brand the eco-chicken production as :

”Michelin*** Quality chicken”.

Sell on-line with ”over nightdelivery” via UPS or DHL.

To implement the ”new business idea” does not require a large investment, and it does not changethe ”business model”.

To convert the new business idea into a new ”Business model” requires the right contacts and ideas. Implementation is a management issue, but needs not necessarily new investments.

To convert the new ”business model” into a new way of doing business , e.g. develop the ”Michelin*** Quality Chicken” into a pan-European franchise concept might require external funding.

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partner in

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Competing BUSINESS MODELS• U-Turn health, training concept for active elderly citizens • – the same technical solution but 5 different business models:

– Model 1: • Deliver all/or training equipment to local fitness centers and provide license to use the training

concept and technology. The fitness center buys consumables (e.g. training modules, music etc) from supplier or from third party

• = “Ikea model” – Model 2

• Deliver and install the training equipment at the fitness centers, train the trainers and leave operation to the local fitness centers but supply consumables as part of the package.

• = “Turn key supplier”– Model 3

• Install training equipment and operate the individual fitness centers on behalf of the owner (which manage sales and marketing functions) at a fixed “operators fee”..

• = “Build & Operate” – Model 4

• Provide and install training equipment, operate, market and finance a number of special U-Turn Health centers specialized in the needs and interest for elderly people.

• = U-Turn Health Center”– Model 5

• Deliver to francise takers all training equipment for a fully operational U-Turn Health center, including providing of training of trainers, sales and marketing material etc.

• = U-Turn Health Center Franchise concept”

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QB-House started in 1996 in Tokyo. It has now more than 200 outlets, and the number of visitors surged from 57.000 in 1996 to 3.5 million in 2002. It is now expanding in Asia with a target of 1000+ outlets in 2013.


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Slow start and then high growth potential ?

Revenue

t

Starbucks funding time

1987



The NABI “blue ocean” strategy!

High

Low

InitialPurchaseprice

Corrosion Maintenancecost

Fuelconsumption

Environmentalfriendliness

Aestheticdesign

Customerfriendliness

Life Cycle cost

Average U.S. transit bus

Source: Blue Ocean Strategy, Kim & Maubogne, 2005

NABI would not have won any tender if they had not influenced the tender criteria from

-Product priceto

- Life cycle cost

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Value proposition toEnd-user customers

End-userproduct

New technology

Production orpartner

Sales channel and marketing

Costmodel

Revenuemodel

Business case and financials

Business models:

“Ikea model”

“Turn key supplier”

¨”Service provider”

“Build and operate ”

“U-Turn Health Center”

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New technology

”Embedded” – product

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Gate2Growth.com Partner in Greeonvat-EuropeWith revenues and cost estimated a Balance Sheet and estimateliquidity (funding) requirments


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Partner in Greeonvat-EuropeFirst 2 years need to be on a monthly basis

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Commercialization of innovation projects

They faced the 5 funding options:

• The ”Hard way”: ”Bootstrapping”

• The ”Expensive” way: Convince investors to invest in the company

• The ”Strategic way”: Convince strategic business partners to provide funding,

• The ”Difficult” way”: Borrow in the Bank.

• The ”Smart” way: Appply for public or private ”Grants”.

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partner in

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Commercialization of innovation projects

They faced the 5 funding options:

• The ”Hard way”: ”Bootstrapping”

• The ”Expensive” way: Convince investors to invest in the company

• The ”Strategic way”: Convince strategic business partners to provide funding,

• The ”Difficult” way”: Borrow in the Bank.

• The ”Smart” way: Apply for public or private ”Grants”.

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partner in

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partner in


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From idea to investor contact

1. The idea!2. Revised and realistic business plan3. Realistic capital requirement4. Realistic investment memorandum5. Investor contact6. Investor kontakt

1 2 3 4 5

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14 & 15 May 2013

CIRCE´S HEADQUARTERS, ZARAGOZA ( SPAIN)

43

Biomassproduction

at farm level

Biomassharvesting,

transportation, conversionand storage

End-useruse of

biomass

End-userwillingness

to pay

After deduction of harvesting , transportation and other cost, the maximumfarmer revenue to finance special investments and cover operating cost and loss in fertilizing value

The simple ”value chain”

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A good Business model has to reflect the interest of each of the companies involved

European Parliament, Brussels

Company 1

Company 2

Company 3

Company 4

Company 5

Company 6


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What is PAEI ?

• P – The role as “producer” in a management team.– The “P” can create results and produce products and services better than

competitors.

• A - The role as “administrator” in a management team.– The “A” shall be able to plan, coordinate, control establish procedures for

the organization

• E – The role as “strategy creator” and visionary in the management team.– The “E” is the person who develops the strategy for business development

and the development of new products and services. He adapt products and services to new market challenges and identify hither unseen opportunities.

• I - The role as “integrator” in the management team.– The “I” shall be able to create harmony in the organization and secure that

the whole organization is moving in the same – and right direction.



Start up Early stage Development Internationalization Growth/Death

poEo

Size of organization

paEiPAei

PAEi

PAEI

pAeI

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StockExchange/ PublicEquity

VENTURE CAPITAL PRIVATE EQUITY

Later-stageBuy-out

MidStage

ExpansionDvptCapital

EarlyStage

SeedStage

BusinessAngelsFFFPre-Seed

TechTransfer/Incubators

Typical innovation financing

Pre-Commercial Commercial

”Mind the gap! ” = time and dilution risk

IPO

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Business Angels

Capital requirement

Seed Start-Up Development Growth M&A/Restructuring

Bank loansFFF

Business AngelsVenture Funds

Corporate investors/

Large Venture Funds

IPO/Stock market

New trends in the market.


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Flow of capital

Realestate

VCfundsBonds Quoted

stocksPrivateequity

Investors-Pension Funds

-Insurance companies-Banks

-Corporations-Mutual funds

-Others

Y o u r s a v i n g s

Otherassets


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VC company/fund

PrivateEquity

1

VC FUND 1

PrivateEquity

2

PrivateEquity

3

PrivateEquity

4

PrivateEquity

5

PrivateEquity

6

PrivateEquity

7

PrivateEquity

8

PrivateEquity

9

PrivateEquity

10

PrivateEquity

…n


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Business Angel (HNI)

Realestate

PrivateEquity 2Bonds Quoted

stocksPrivate

Equity 1

M y s a v i n g s

PrivateEquity 2


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Management team / company

InvestorInvestor

InvestorInvestor

InvestorInstitutional investors

Fund IIFund I

VC Fund I

Porteføljeselssskaber PorteføljeselssskaberPorteføljeselssskaberPortfolio companiesPortfolio companies Portfolio companiesPortfolio companies

PorteføljeselskaberPorteføljeselskaberPorteføljeselskaber

PorteføljeselskaberPorteføljeselskaberPortfolio companies

Investors request an IRR of not less thanEuribor + 10 %

This team need 1,5 - 2 % to manage and monitor portfolio + carried interest

Each Fund shall receive 15 % IRR

If risk is 50 %, then each Portfolio co. shall have the potential to generate 30+ % IRR

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Certification & Regulatorycompliance Investor exit Organization

& staff

Agreements

Competitorsevaluated

Business model

Market test &product

ease of use

Funding

Investorsreturn of

investment

Management capabilities

Capital requirementestimated

National & Internationalsales cannels

Production&

facilities

IPR Prototype tested

Qualitydocumented

Technology verified

Before meeting investors you need to solve ”the business plan puzzle”

Value chainanalysis

Market sizeestimated

Who are thecustomers

Sales &Marketing strategy

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For a H2020 SME application you only need to solve part of ”the business plan puzzle”

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Product

Certification &Regulatorycompliance

Investor exit

Organization & staff

Competitors,products &

business modelsBusiness

model

Market test &product

ease of use

Investorsreturn of

investment

Management capabilities

Capital requirementestimated

National & Internationalsales cannels

Production&

facilities

IPR

Prototype tested

Qualitydocumented

Technology verified

Value chainanalysis

Market sizeestimated

Who are thecustomers

Sales &Marketing strategy

Product & production

Sales & Marketing

Funding, liquidity & investorsManagement & management issues

Funding

Agreements


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Public Funding, Loans and Private Equity

• The big differences !– You apply for a loan or for public funding

• The decisionmaker decides if you fulfill the criteria for obtaining the loan or the public funding

– You ”sell” part of your business in order to get private equityfinancing

• The investor try to understand if ”he can get rich” by making the investment !


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Other differences

• A bank or a grant organization often makes decisions based on a budget and a written business plan.

• Investors both read and want to talk with you.• Hence when invited to speak with the investors, be sure

you can defend all parts of the text.


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Bankers and Investors like to look at budgets!

• A Banker is studying the budgets in order to see if the company can pay the interest, if the cash flow allows for repayment of the loan –and if there is enough collateral to secure the loan.– Under normal market condition banks have close to unlimited access to financing

good projects, under current market conditions many banks operate under credit restrictions.

• The Investor is studying the same budget in order to assess if the company, or the shares in the company in due time can be sold –and at a price which makes it worth while to invest.– Investors normally only have limited funds available, hence one positive

investment decision may excludes the next.

• The budget which make the Banker smile may scare the Investor away, while the budget which excites the Investor can make the Banker depressed!


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…. or to summarize:

• A Banker is attracted by the SECURITY connected to the transaction.

• The Investor is attracted by the OPPORTUNITY the transactionoffers.

• It is easier to assess ”security” thanan ”opportunity”

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500 new deals/year

Screening process

2 min/deal

250 selected deals

150 selected deals

10 min/deal

20 min/deal

75 analysed deals 4 Hours/deal

50 negotiation

5-10 investments

10 Days/deal

490 rejected deals1-3 month/investment

Investor questions:

Do I like the businessconcept and - model ?

If I believe in the businessplan and the budgetscan I make money?

Can I trust the businessplan and the budgets?

If it is realistic, can this management deliver the promised results ?

Ok, would you like to meet us and discuss?

Let us move into theserious negotiations.

The unsolicited deal Funnel

Solicited deals


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If you eliminate the management risk, then risk is:

acc. risk– Technological risk 50,00 % 50 %

– Market risk 75,00 % 50 %

– Financial risk 87,50 % 50 %

– Management risk 93,75 % 50 %

– Total risk percieved by the VC 87,50%

– Or chance of success increases from 6,25 % to 12,5 %

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Your way of making decisions and that of investors

“System 1” operates automaticallyand quickly, with little or no effort andno sense of voluntary control. It madeus survive, when we leved in thecages.

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“System 2” allocates attention to the effortful mental activities including complex computation. It is also associated with the subjective experience, choice and concentration.


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“System 2” allocates attention to the effortful mental activities including complex computation. It is also associated with the subjective experience, choice and concentration.




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If you want to attract investors and have a working relationship with them, you need to

”talk to” both ”system 1” & ”system 2”


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• Is the mindset of investors different from normal human beings?

• Is that the reason you often get a NO?

• Investors are normal human beings, and ”fear,” ”greed”, ”lust” and ”anchoring” effects influences their behavior and decisions.

• In the end they base their investmentdecisions on a combination of thoroughanalysis and ”guts feeling”.

Investors and other human beings


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A business angel invests his own money and often getsemotional involved in the company in which he invest. He has a limited dealflow to pick from.If he acts rationally, he is will take bigger risk than the Venture Fund.

Two types of investors

The Venture Fund invest other peoples money and has a larger deal-flow to pick from. The investment decision process is more formal than thatof a Business Angel.VC funds are more focused on exit possibilities than the typical Business Angel.If the VC team acts rationally, it will take smaller risk thanthe Business Angel

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Despite all the formal analysis

… the final investment decision is based on a sort of “holistic” assessment of the opportunity:

• do I believe in what I am told ?

• do I understand it and can I trust them ?

• is it realistic ?

• can they make it ?

• can I make money?

• is this opportunity better than all the otheropportunities available ?

• do I have bad/good experiences from similar cases ?

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Greed and fear !• When is come to follow on investments, investors often

have unpredictable behavior – in particular if the project is not exactly on the planned track.

• I really mean:– PLANNED – not necessary RIGHT track.

Greed FEAR

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Reactions depends on perception.• ”greed” addresses isues like

– Not loosing already made investments– Making more money– Securing a potential sucess

• ”fear” is influenced by– Will a wrong decision impact my career / lifestile?– Not being clever enough to see a potential failiur?– If my investor colleagues says no, I will say no, and I will not be blamed!

• Weighing ”fear” against ”greed”– All knows that early stage investments are risky investment, and some

of them will go wrong.– No-one will ever know, if a NO to a follow-up investment was a wrong

decision.– To loose money on a follow-up investment damage your career

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The entrepreneur’s risk !

0

20

40

60

80

100

120

Number ofideas

Potentialfailures

Potentialsuccesses

Bet on all Bet on all

Ideas and investment allocation

Ideas Investment

0

20

40

60

80

100

120

Number ofideas

Potentialfailures

Potentialsuccesses

Quick kill Support onlywinners

Ideas and investment allocation

Ideas Investment

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A completebusiness plan



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5 years growth requirement & ownership %

30 % IRR

40 % IRR

50 % IRR

Required company value in year 5

0

5000

10000

15000

20000

25000

30% IRR 40% IRR 50% IRR

Investor ownership 50 %Investor ownership 33 %Investor ownership 20 %

High riskadjusted IRR

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Trustworthybudgets and

attractive terms


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Pre-Money Valuation

• Pre-money valuation is also a definition.

– It is a measure of the value of the company before the new investment comes in.– You can always calculate it, even if you do not think it is possible – It reflects directly the ownership % the new investor get.

New Investment x (1 – Ownership %)Pre Money Value = Ownership %


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Pre-money valuation is an often used term

– It is a measure of the value of the company before the new investment comes in.– You can always calculate it, even if you do not think it is possible – It reflects directly the ownership % the new investor get.

You should be able to defend the pre-money valuation, and if it has changed since last round of financing, you should be able to explain why!

New invst Owner % Pre Money1.000.000 50,00% 1.000.0001.000.000 18,00% 4.555.5561.500.000 40,00% 2.250.000

750.000 15,00% 4.250.000

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StockExchange/PublicEquity

VENTURE CAPITAL PRIVATE EQUITY

Later-stageBuy-out

MidStage

ExpansionDvptCapital

EarlyStage

SeedStage

BusinessAngelsFFFPre-Seed

TechTransfer/Incubators

Typical innovation financing

Pre-Commercial Commercial

”Mind the gap! ” = time and dilution risk



More rounds and increase in valuation.Pre-money valuation Amount invested

Series A Series B Series C Series D



Pre-money valuation Amount invested

Series A Series B Series C Series D

More rounds and decrease in valuation.



Investment Decision phases

Access togood dealflow

Selectinggood deals

DueDiligence

DealStructuring

Negotiationand

closingInvestment

Management and Board

composition

Investors are only considering deals which fit their investmentpreferences.

Tip: Get to know what theInvestor preferences are, e.g by employing an advisor with this knowledge.





Selectinggood deals

DueDiligence

DealStructuring

Negotiationand

closingInvestment


composition

When an investor is interested, then be ready to answer his questions NOW and not “tomorrow”! Too many deals “go south” because the entrepreneur is not ready to supply the investor with requested information at short notice.

TIP: Make servicing the potential investor requirement a priority for the whole organization. Treat the investor like you treat your most valuable customer!





Selectinggood deals

DueDiligence

DealStructuring

Negotiationand

closingInvestment


composition

During this phase agreement shall not only be reached about the size of investment, but also about all the other type of conditions.

TIP:Get to know the typical documents and issues which will be part of the negotiation• Pre-money valuation• Term sheet structure and content• Shareholder agreement





Selectinggood deals

DueDiligence

DealStructuring

Negotiationand

closingInvestment


composition

Too many deals “go south” because of unrealistic “pre-money” valuation of the investment target!

TIP: Be realistic about the share price you will offer! If the investor do not think he can make a lot of money from the ownership you are offering – why should he invest?





Selectinggood deals

DueDiligence

DealStructuring

Negotiationand

closingInvestment


composition

If a new professional investor invest in your company then he will want to have s strong board position.

TIP: You should appoint your own board representatives so they match the ones appointed by the investor. Sound Board decisions are made through discussion, not through majority vote!!



Project monitoring phases

Getting to know the company andwork together

Monitoringand

reporting

General support and

development

Market contact

and technology

support

Crisis inmanagement

orchange of

management

Re-financing and

syndication

Mergerand

Acquisition

The first 6 month after the investment is done is the

“trust building phase”.

TIP:Make sure that you can

deliver promised results, at least during this first phase.





Monitoringand

reporting

General support and

development

Market contact

and technology

support

Crisis inmanagement

orchange of

management

Re-financing and

syndication

Mergerand

Acquisition

During the daily routine you risk to forget to cater for the investor

information needs, including those which has not been asked for!

TIP: Make sure to establish good and accurate reporting and

develop your investor relations





Monitoringand

reporting

General support and

development

Market contact

and technology

support

Crisis inmanagement

orchange of

management

Re-financing and

syndication

Mergerand

Acquisition

Disappointment and crisis will come, and there will be a need for adjustments to the business plan.

TIP:Disappointments should never

come as a surprise to the investor!



If a crisis occur and there is a need for structural or organizational changes, the

investors priority is to safeguard his investment – not your interest!

TIP:Be ahead of the situation, and be the

one who propose the actions which will re-establish confidence.



Monitoringand

reporting

General support and

development

Market contact

and technology

support

Crisis inmanagement

orchange of

management

Re-financing and

syndication

Mergerand

Acquisition



In many cases there is a need for additional financing or merger or

acquisitions in order the secure the growth or survival of the company.

TIP:Be proactive for such initiatives, if you resist, the decision will be taken even

against your own will!



Monitoringand

reporting

General support and

development

Market contact

and technology

support

Crisis inmanagement

orchange of

management

Re-financing and

syndication

Mergerand

Acquisition



Exit phases

Analysis of exit routes

Selection of exit strategy

Preparing portfoliocompany for exit

Implementing exit

strategy

Bridge financing / Merger &

Acquisition

Negotiation and closing

EXIT

There may be more exit possibilities than the ones preferred by the

investor.

TIP:Consider already from the start of the investment process how you would like the exit to take place –

and plan for it!



Exit phases




Implementing exit

strategy


Acquisition


EXIT

Investors first priority is to exit from the investment as early as possible and at the highest possible price.

TIP:Be proactive and support the exit

process – if not, you get the investor against you – not a good

idea!



Exit phases




Implementing exit

strategy


Acquisition


EXIT

The exit process (if not IPO) might create uncertainty in your

organization.

TIP:Make sure that not only you and the

investor makes a profit from the exit process. Distribute the gains to

your organization also!



Exit phases




Implementing exit

strategy


Acquisition


EXIT

Remember an exit is not completed before the money is in the bank!

TIP:Have a strategy ready if the chosen exit route is a “dead end”. Be open

and discuss alternatives with the investor up front!


Gate2Growth.com

page : 94


Realestate

SME’scompaniesBonds Quoted

stocksPrivateEquityfunds

Funds available to invest

Otherassets

The indivídual investor has endlessalternative investment opportunities

page : 95


The Gate2Growth Team

Uffe Bundgaard-JorgensenPh.D. in Economy, operation research and statisticsPublic decision processes, Welfare policy, Business models, International partnering, Financing and IPR strategy40 years of experience: Business development, consulting, financing

Louise Pierrel MikkelsenM. Sc. in Accounting, Strategy and Control6 years of experience: Business development & Business Skills for Non-MBAs

Rasmus EgvadM. Sc. in International Business6 years of experience: Business Plan evaluation, Business development, funding, Consulting

Carmen Bianca SocaciuBSc. in Business Administration & Service Management (2009) and a MSc. in International Marketing and Management (2011) from Copenhagen Business School

Marius-Febi MateiPh.D in Chemistry and MSc in Nanmolecular Sciences from University of Bremen. Support on EU project related scientific matters and business cases.

page : 96



Thank you for your attention.

Uffe Bundgaard-Jørgensen.InvestorNet-Gate2Growth

SCION-DTU - Bygning 381Diplomvej 381Kgs LyngbyMobile: +45 40521645Mail: [email protected]

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