11/8/14

Hack the WebSummit – Appunti per 2015

Ecco alcuni appunti presi durante questa meravigliosa fiera delle startup di tutto il mondo, divisi per area di pertinenza.

Investitori:

  • Approccio: Pensare di arrivare qua e incontrare un’investitore, approcciarlo e farsi strappare un assegno rimane comunque qualcosa di molto sfidante. Gli investitori hanno il braccialetto rosso, e girano per il summit in cerca di idee, persone o prodotti interessanti. Spesso sono loro ad approcciarti, ma questo non esclude che tu li possa fermare per scambiare due chiacchiere. Chiaramente sarà un po’ come fermare una persona in discoteca per chiedergli di uscire a bere qualcosa e magari andare oltre. Per questo il mio consiglio, sopratutto per i meno espansivi è di usare tattiche differenti.
  • A chi rivolgersi: Scegliere il proprio investitore è molto importante sopratutto in base allo stato di avanzamento della propria idea. Se infatti andate a presentare un’idea, anche se molto innovativa, potrebbe non avere molto senso approcciare “Index Ventures”, al contrario se avete una startup con 500.000 utenti allora bisogna puntare alle blu-chips.


Pitch and Exhibition:

  • Exhibition: Se avete scelto di fare exhibition allora vi troverete al vostro bancone, con, il vostro cartellone, pronti per la vostra demo. Qua sono fondamentali due cose: come farsi notare tra le altre migliaia di startup, ma sopratutto chi fermare. Investitori ne passano pochi, e come già detto non sarete gli unici a volerli fermare, quindi fondamentale decidere a chi rivolgersi.
  • Strategia di comunicazione: Potete decidere il modo di comunicare, se attraverso una demo, se attraverso un iPad che mostra il vostro prodotto, ma ricordatevi un backup plan per la rete (vedi sotto). Consigliato avere qualcosa da lasciare dopo l adesso e qua potete chiaramente decidere se tra volantini, tra Business cards, o se gadget. Questi ultimi spesso, sono i più richiesti. Se pensate di vestirvi da ninja, o tutti coordinati con un completo coloratissimo, sappiate che non sarete gli unici.
  • Sopra il palco – Pitch contest: Se siate stati scelti per salire sul palco (ce ne sono tre), beh allora vivrete il vostro momento di gloria presentando la vostra startup al pubblico e ad una giuria di tre persone che ogni volta cambia. Appuntandomi un po’ di domande, le più classiche sono le seguenti:
    • Business model, come pensate di fare soldi e se il business è un business scalabile/milardario
    • Di quali risorse hai bisogno per espandersi
    • come hanno risolto eventuali regolamenti che possono bloccare il prodotto o eventuali problemi di privacy
    • Eventuali grandi competitor che potrebbero farvi chiudere i battenti


Backup Plan:

  • Preparasi al peggio: Nella preparazione preparasi sempre a tutto e curare i dettagli. Ci sono piccole cose che vi metteranno i bastoni tra le ruote. Come ad esempio il WiFi che non funziona (come successo durante il WebSummit2014) oppure alla presenza di altre tre startup che hanno la vostra stessa identica idea/prodotto.

Curiosità

  • Apple rules: Sembra che senza avere almeno un dispositivo Apple non puoi fare startup.
  • Business Card: Partecipando ad una fiera sul web tecnologia pensare che la forma di comunicazione più usata per scambiarsi i contatti, o forse l’unica, sia la “business card” (biglietto da visita) fa un po’ sorridere. Quindi preparasi una bella scorta se si vuole fare networking e lavorateci su. Più bella la fate, più la gente la noterà tra le centinaia che ha collezionato.

 

10/10/11

Venture Capitalist Mark Suster On Getting An MBA

Here an extract from an interview to Mark Suster about the importance to get an MBA to work for startups or venture capitalists:

If I were 27 again and working at a start-up and was considering getting an MBA, I think I’d go to my boss and ask if I could spend a year in sales, 6 months in product management or marketing and 6 months in finance.  I’d keep my personal balance sheet positive and my future options open.  It’s hard to start companies and take risks when you’re $150,000 in debt.

07/18/11

Venture Capital in Italia: Art. 31 manovra fiscale

Venture capital (articolo 31). Per favore l’accesso al cosiddetto venture capital e sostenere l’avvio e la crescita di nuove imprese, si prevedono specifici incentivi a vantaggio dei sottoscrittori di «Fondi di Venture Capital» specializzati nelle fasi di avvio delle nuove imprese. Il venture capital è l’attività di investimento in capitale di rischio realizzata da operatori professionali e finalizzata a operazione di early stage o l’insieme dei finanziamenti (seed financing e start up financing) a sostegno delle imprese nei primi stadi di vita. Più in dettaglio, per favorire l’accesso al venture capital e sostenere i processi di crescita di nuove imprese tramite fondi comuni di investimento vengono esentati da imposizione i proventi derivanti dalla partecipazione ai «Fondi di Venture Capital» (Fvc), o redditi di capitale come proventi derivanti dalla gestione, nell’interesse collettivo di pluralità di soggetti, di masse patrimoniali costituite con somme di denaro e beni affidati da terzi o provenienti dai relativi investimenti. Peraltro, per i soggetti titolari di reddito d’impresa, la suddetta esenzione acquista efficacia previa autorizzazione della commissione europea. La norma individua quindi i Fondi di Venture Capital (Fvc) ai fini dell’accesso al beneficio suddetto. Si tratta di fondi comuni di investimento armonizzati UE, vale a dire fondi e società di investimento a capitale variabile (Sicav) di tipo aperto, costituiti nei paesi dell’Unione europea, che investono prevalentemente in strumenti finanziari quotati (azioni, obbligazioni, etc.), che investono almeno il 75% dei capitali raccolti in società non quotate nella fase di: sperimentazione (seed financing); costituzione (start-up financing); avvio dell’attività (early-stage financing); sviluppo del prodotto (expansion financing). Ulteriori caratteristiche che devono possedere le società destinatarie dei Fvc, sono: che non devono essere quotate; devono avere sede legale nel territorio di uno Stato membro dell’Unione Europea (o dello Spazio Economico Europeo), a condizione che abbiano con l’Italia un accordo che consenta un adeguato scambio di informazioni ai fini fiscali; e che non devono essere detenute in via prevalente da persone fisiche, sia in forma diretta che indiretta. Ma anche: che devono essere soggette all’imposta sul reddito delle società (o imposta analoga prevista dalla legislazione locale) senza possibilità di esenzione né totale né parziale; esercitare attività di impresa da non più di 36 mesi; e avere un fatturato non superiore ai 50 milioni di euro (in base all’ultimo bilancio approvato prima dell’investimento del Fvc). Toccherà invece a un decreto ad hoc del Tesoro stabilire, tra l’altro, le modalità di rendicontazione annuale dei gestori dei Fvc per rispettare le condizioni sopra vise, e le sanzioni per il mancato rispetto di tali condizioni.

10/21/10

Superangels.. the new funding landscape

There is an interesting essay from the Paul Graham, about what’s changing in the funding market and startup environment. LINK

Here some extracts:

[…]

For decades there were just those two types of investors, but now a third type has appeared halfway between them: the so-called super-angels. [1] And VCs have been provoked by their arrival into making a lot of angel-style investments themselves. So the previously sharp line between angels and VCs has become hopelessly blurred.

There used to be a no man’s land between angels and VCs. Angels would invest $20k to $50k apiece, and VCs usually a million or more. So an angel round meant a collection of angel investments that combined to maybe $200k, and a VC round meant a series A round in which a single VC fund (or occasionally two) invested $1-5 million.

[…]

The no man’s land between angels and VCs was a very inconvenient one for startups, because it coincided with the amount many wanted to raise. Most startups coming out of Demo Day wanted to raise around $400k. But it was a pain to stitch together that much out of angel investments, and most VCs weren’t interested in investments so small. That’s the fundamental reason the super-angels have appeared. They’re responding to the market.

The arrival of a new type of investor is big news for startups, because there used to be only two and they rarely competed with one another. Super-angels compete with both angels and VCs. That’s going to change the rules about how to raise money. I don’t know yet what the new rules will be, but it looks like most of the changes will be for the better.

A super-angel has some of the qualities of an angel, and some of the qualities of a VC. They’re usually individuals, like angels. In fact many of the current super-angels were initially angels of the classic type. But like VCs, they invest other people’s money. This allows them to invest larger amounts than angels: a typical super-angel investment is currently about $100k. They make investment decisions quickly, like angels. And they make a lot more investments per partner than VCs—up to 10 times as many.

The fact that super-angels invest other people’s money makes them doubly alarming to VCs. They don’t just compete for startups; they also compete for investors. What super-angels really are is a new form of fast-moving, lightweight VC fund. And those of us in the technology world know what usually happens when something comes along that can be described in terms like that. Usually it’s the replacement.

05/4/10

“Big company” venture funds!

As you read everyday news about VC sector or related, you probably noticed a trend that is creating. Big tech company are creating internal venture fund to invest in startups ones more and more. Two main examples are Google Ventures and Intel Capital.

What are the pros of this strategy? In my opinion be simplyupdated to new technologies. This is an historical problem for big tech companies. Be updated. And probably we could understand that this could be a problem also for a company like Google the incentivate new products internally.

Anyway VC business is saturating, the amount of good startups don’t cover all the funds size and overall the returns that investors would like to receive.

03/2/10

Angels vs. Venture Capitalists

[This blog post is by Ben Horowitz, the Horowitz of Andreessen Horowitz.]

At our new venture fund, we’ve been spending time looking into new ways that will make the lives of entrepreneurs seeking funding easier. To that end, we’ve linked up with Ted Wang who has been working on an open source legal project called the Series Seed documents. We’re impressed with his work and are going to use these standard funding documents as part of our seed stage investments wherever appropriate. 

We have to give a big shout out to Ted: he nailed this. It’s exactly in step with our intention of letting entrepreneurs focus on building businesses in today’s environment, without having to follow old VC rules.

In a nutshell, entrepreneurs and the businesses they are starting have evolved. Start ups today don’t need to build a manufacturing plant (as DEC, the very first high-tech VC investment, did in 1957) to start a business. They need less money to build a product and prove that it works before scaling the business. Yet, the paperwork involved in funding entrepreneurs hasn’t changed to meet these needs. Series Seed is the first to establish this new way of supporting funding suited for today’s entrepreneurs – and we’re big fans. 

Let us know what you think: check out the Series Seed documents, and share your thoughts. 

Here’s more background on our thinking behind how entrepreneurship has changed, creating the need for these simplified funding documents. I’m speaking here from the point of view as both an angel investor and a venture capitalist, two very different kinds of investors. 

Angels vs. Venture Capitalists

Why do angel investors exist?

Before answering these questions, it’s useful to ask and answer a related question: why are there angels and why have they become more prominent in the last 10 years? After all, doesn’t the definition of venture capital include all of the activities that angels perform? 

The answer lies in the history of technology companies and the differences between how they were built 30 years ago and how they are built now. In the early days of technology venture capital, great firms like Arthur Rock and Kleiner Perkins funded companies like Digital Equipment Corporation (DEC) and Tandem. In those days, building the initial product required a great deal more than a high quality software team. Companies like Tandem had to manufacture their own products. As a result, getting into market with the first idea, meant, among other things, building a factory.  Beyond that, almost all technology products required a direct sales force, field engineers, and professional services. A startup might easily employ 50-100 people prior to signing their first customer. 

Based on these challenges, startups developed specific requirements for venture capital partners:

  • Access to large amounts of money to fund the many complex activities
  • Access to very senior executives such as an experienced head of manufacturing
  • Access to early adopter customers
  • Intense, hands-on expert help from the very beginning of the company to avoid serious mistakes

In order to both meet these requirements and build profitable businesses themselves, venture capitalists developed an operating model which is still broadly used today:

  • Raise a large amount of capital from institutional investors
  • Assemble a set of experienced partners who can provide hands-on expertise in building the product and then the company
  • Evaluate each deal very carefully with extensive due diligence and broad partner consensus
  • Employ strong governance to protect the large amount of capital deployed in each deal. This includes requisite board seats and complex deal terms including the ability to control subsequent financings
  • Manage own resources effectively by calculating the amount of capital/number of partners/maximum number of board seats per partner to derive the minimum amount of capital that must be invested in each deal 

It turns out that building a company has changed quite a bit since the early days of venture-backed technology companies. Building a company like Twitter or Facebook is quite different from building Tandem. Specifically, the risk and cost of building the initial product is dramatically lower. I emphasize product to distinguish it from building the company. Building modern companies is not low risk or low cost: Facebook, for example, faced plenty of competitive and market risks and has raised hundreds of millions of dollars to build their business. But building the initial Facebook product cost well under $1M and did not entail hiring a head of manufacturing or building a factory. 

As a result, for a modern startup, funding the initial product can be incompatible with the traditional venture capital model in the following ways:

  • Lengthy diligence process. Venture capitalists take too long to decide whether or not they want to invest because they are set up to take large risks and have complex processes to evaluate those risks. 
  • Too much capital. Venture capitalists need to put too much capital to work – often a VC will want to invest a minimum of $3M. If you only need 4 people to build the product and get it into market, this likely won’t make sense for your business.
  • Board seat. Venture capitalists often require a board seat and, for that matter, a board of directors be formed. If 100% of the company is building the product and the team knows how to do that, then a board of directors may be overkill. In addition, it may be too early to decide who you want to be on the board. 

 

As a result of the above, a venture capitalist usually requires a serious commitment from the entrepreneur to pursue an idea that is highly experimental. If the product doesn’t stick, it might make sense for the entrepreneur to pursue a totally different idea or drop the business altogether. This is much easier to do if you’ve raised $300,000 than if you’ve raised $3,000,000. 

As entrepreneurs needed someone to bridge the gap between building the initial product and building the company, angel investors stepped up. 

Angel investors are typically well-connected, wealthy individuals. They generally use their own money and come with none of the above VC constraints describe above: they don’t go on boards, they don’t need to put in lots of capital (in fact, they usually don’t want to), they prefer dead simple terms (as they often don’t have legal support), they understand the experimental nature of the idea, and they can sometimes decide in a single meeting whether or not to invest. 

On the other hand, angels do not manage huge pools of capital, so entrepreneurs need to find someone else to fund the building of the company (as opposed to the product) and most angels do not plan to spend a great deal of time helping entrepreneurs build the company. 

One more thing before answering the original question

Before getting back to the need for the Series Seed documents, it’s important to distinguish venture rounds and angel rounds from venture capitalists and angel investors. It’s possible for a venture capitalist to invest in an angel round and vice-versa. Sometimes this is a great idea and sometimes it’s tragic. We’ll first examine the rounds and then the investors. 

When should you raise an angel round and when should you raise a VC round?

This question really comes down to the company’s development. If you are a small team building a product with the hope of “seeing if it takes” (with the implication being that you’ll try something else if it doesn’t), then you don’t need a board or a lot of money and an angel round is likely the best option. On the other hand, if you’ve developed a strong belief in your product or your product idea and you are in a race against time to take the market, then a venture round is more appropriate. You will benefit from both the extra capital and extra support that comes with a serious and large commitment from your investors. 

So who is qualified to invest in each?

Obviously angels can invest in angel rounds, but what about VCs? Is it safe to have them participate? The answer turns out to be “if and only if they behave like angels.” What does it mean for a VC to behave like an angel? Well, they must:

  • Be comfortable investing a small amount of money, e.g. $50,000. 
  • Be able to make an investment decision quickly, e.g. in one or two meetings
  • Be able to invest without taking a board seat
  • Not require control of subsequent funding rounds
  • Not impose complex terms

If the VC wants to be in the angel round, but refuses to behave like an angel, then entrepreneur beware. Having a VC who behaves like a VC in the angel round can jeopardize subsequent financings. 

Angels can be great participants in venture rounds, but it’s generally better to have a VC lead those deals as they have more financial and other resources required to build the company.

What does this mean about Andreessen Horowitz and the types of investments we’ll do?

As I stated above, at Andreessen Horowitz, we invest in both venture rounds and angel rounds. When we invest in angel rounds, we behave like an angel. As angel investors, we can invest as little as $50,000, we do not take board seats, and we do not require control. 

Rooted in this desire to help germinate quality ideas, our support for Seed Source legal docs will allow both us as investors and the entrepreneurs we fund to focus on building a winning product rather than scrutinizing legal docs. 

10/27/09

Sequoia Capital – Busy Investing

A VentureBeat article:

At the recent Y Combinator Startup School event, prominent Internet venture capital firm Sequoia Capital announced that it has been making more investments in the past 12 months than in the preceding two years.

Apparently, the firm believes that the best time to make investments is during an economic downturn, which has historically resulted in the creation of some of the most influential and successful technology companies.

Sequoia invests in companies that have very clear return on investment opportunities and which focus on monetization early.

Cheers,

Don Jones

VentureDeal

09/16/09

17 times revenue multiples…

I was reading this article on Sylicon Alley Insider and I was surprised by the title “Mint Acquisition Brings Internet M&A Multiples Back To Lofty Levels“. Reading, I found this words:

Intuit is buying personal-finance site Mint.com for $170 million. This represents a fairly rich acquisition price relative to current financial performance: 

If our projections of about $10 million in revenue this year are accurate, that would be a 17-times multiple of revenue.

 Is it 17 times multiple so high for a startup that probably is closing this year with revenues, that is not burning cash, that work in a evergreen  market (banking and finance) with a free product? I don’t believe so.