MICRO-NANO Presentation Financing & Investing in Early Phase - - PowerPoint PPT Presentation

MICRO-NANO

Presentation Financing & Investing in Early Phase Nano Ventures

MicroNanoConference 2015 Amsterdam.

Willem van den Berg, Value Creation Capital – TechNano Fund

w.vandenberg@valuecreationcapital.com

CONTENT

• Profile of Value Creation Capital including examples of participations.
• Entrepreneurial investment strategy and Management of high-tech companies

in a dynamic environment.

• Profile TechNano Fund
• Investment Process
• Assessment of Investments
• Creating value and success factors
• Funding

INTRODUCTION

• Willem van den Berg is managing partner of

Value Creation Capital with TechNano Fund focus on high tech, nanotech and IT investments (2015-)

• Willem van den Berg co-founded the TIIN

Capital funds with TechFund and TIIN Buy-out & Growth Fund and TIIN Capital merged with Berk Partners. Total € 65 mio under management (2005-2015)

• PPM Oost director Total € 70 mio under

management, 70 portfolio companies. (1998 - 2005)

Focus

High Tech en smart industry Nanotechnologie Microsysteem technologie Hardware gerelateerde Enabling technologie

Trends

Sensoren Internet of Things Cloud MEMS, NEMS Photonics Organ/Lab-on-chip Smart systemen, Robotics, 3D printing

PROFILE

• Portfolio companies < 7 jaar, HQ in NL
• Proven businessmodel
• Investments € 250.000 - € 1,5 mln. per portfolio company
• Focus on growth and exits to strategic buyers (‘trade sales’)
• Value creation using blueprint framework and value proposition design with

1000 day plan

4

FUNDMANAGEMENT: TEAM

5

Team/partners left to right: Willem van den Berg, Aldebert Wiersinga, Ronald Wissink, Jos Bourgonje en Petra Cruijff (office management)

# Founder: >12 # Funds: 6 # Exits: >20 IRR > 22-30% # Investments: > 70

# Experience netwerk high tech nano: > 150 years

VALUE CREATION CAPITAL PROFILE

IT IS OUR MISSION TO FUND, GUIDE AND SUPPORT TECHNOLOGY COMPANIES TO THE NEXT LEVEL

INVESTMENTS OF PARTNERS OF VALUE CREATION CAPITAL

7

VALUE CREATION METHODOLOGY

• Blueprint
• Value proposition

design

• 1000 days plan and

hands-on support

8

Phased Strategy Business Model Canvas & Value Proposition design 1000 days plan

NANOTECHNOLOGY: NEXT BIG THING

De nanopil van de Universiteit Twente patiëntvriendelijkere analyse darmkanker Binnen vijf jaar zou de techniek zo ver kunnen zijn.

9

WTB: Capsule met lab on chip Chemie: Chromatografisch veld Electronisch ‘’telraam’’ Processor en wireless comm Mobiele app

INVESTMENT PROCESS

• First analysis
• Check criteria
• Factsheet/ valuation
• 1st meeting

Management team

Leads/ intake 1-2 weken

Reach team consensus

2-4 weken

• Company valuation
• 2nd Management

decision

• Term sheet/LOI
• Investment Proposal

RvC

Screening /Meeting

Approval RvC & Mandate

6-8 weken

• Final term sheet
• Financial, legal &

commercial DD

• Concept participation

agreement

Due Diligence

Inconsistencies DD  RvC

1-2 weken

• Summary DD
• Negotiations
• Final Contract
• Feedback RvC
• 100 Day Plan

Contract

Closing & signature Partners

1-2 weken

• Contract
• Payment
• Post closing strategy

(1000 day plan)

• Management Agenda

Closing

10-16 weeks

SUCCESSFULL ENTREPRENEURS BETWEEN INNOVATION AND EXECUTION

Innovation Execution

SWOT Flags Next Steps

Value creation Value realization

Ambition Now Markt Vision Mission

Good companies are not sold but BOUGHT!

Ideas

• Interfaces
• Dashboards
• Experimentat

ion

• Autonomy
• Social

Scale

• Staff on

demand

• Community

& crowd

• Algoriths
• Leveraged

assets

• Engagement

SUCCESS IS A BALANCE BETWEEN AMBITION, STRATEGY, PEOPLE AND EXECUTION

Why How Who What

• Ambition
• Vision
• Market &

Customers

• Mission
• Strategy
• Management
• Organisation
• Commitment
• Processes
• Plan
• Technology
• Finance
• Performance

Image & Ideas People & Feeling System & Action Cijfers & Feiten Left brain Right Brain

FUND FOCUS: TARGETGROUP

Succesfull markettest (voorkeur bewezen businessmodel) Products of systemen for B2B market Enterpreneurs committed and coachable Significant Value Proposition Solid business model Exit potential Target group in reach

13

ASSESSMENT AND PROOF POINTS

Completeness of vision

• Thought leadership
• Innovation / roadmap
• Value Proposition
• Realistic ambition
• Business model
• Paying Customers (test) / POCs
• User acceptance (entry barrier)

Ability to execute:

• Team
• Full-time
• Customers
• Lack of big ego’s
• Market(access)

Market

• Market size
• Market growth rate
• Competition
• Exit potential

MULTIDISCIPLINARY APPROACH

Financial & Planning

• Assessment business model
• Assessment cashflow
• Assessment exit potential

Market & Customers

• Assessment market opportunity
• Assessment company

poortunityAssessment competitive advantage

Process & technology

• Assessment (schaalbaarheid)

technologie

• Assessment fulfilment

1 3 2 4

Waarom ? Wie ? Hoe ? Wat ?

Organisation & management

• Assessment quality/MT
• Assessment for cooperation

Desk- research Interviews Audits & assessments Referentie- meetings

VALUATION AND STRUCTURE

Value ≠ Price

• Value gap; present status against

strategy / ambition

• Value is determined by traction,

cash flows, risks, leverage, tax, exit potential

• Price is determined by ”supply &

demand” (liquidity)

• Minority vs. Majority
• Methods; DCF, market /

transaction multiple, book value, potential ROI, etc. Price

• New shares
• Legal date vs economic
• Interest and price (WACC)

Structure

• Debt vs equity vs convertible
• Liqprefs, cumprefs, etc
• Board, reporting, support
• Claw back: to bridge the gap

RISC FACTORS FOR THE DEAL

Management:

• MT van 1
• Family ties
• Part-time commitment
• Low commitment (cash)
• Legal disputes

Market:

• Dependance top-3 klanten
• Entry to customers/resellers
• Red Ocean

Proposition:

• Technolgy Software not scalable
• No Roadmap
• Who owns IP?

Finance:

• Low recurring revenue
• High debt
• Payment debtors
• Dependance partners/supplier
• Exit potential

COMPETITION

Client/market If there is no competition, there is probably no market.

PRODUCT/TECHNOLOGY DRIVERS

Tight monitoring developments Split complex products in sellable partial functions Low entry product implementation at customer with strong added value (pay-back of months instead of years)

MARKET

Business- model

• Choose right businessmodel
• Hybrid business model could generate basic cashflow

Marketing & sales

• Positioning and fit to market
• Check and evaluate customer processes
• Analyse added value of proposition for customer of customer

Internation- alisation

• Sites abroad with commitment country management
• Direct sales en distribution development in later stage

20

MANAGEMENT

Management is success factor Commitment entrepreneurs

High ‘’walk- away’’ threshold

Install Supervisory Board, hands-on support Chairman

Management support Chairman 1 day per week (sales, contracting)

GROWTH FACTORS - LESSONS LEARNED

Management commitment importance Enterpreneurs too technical Management problems must be solved quickly Chairman formula works well Internationaal Sales: do not expect too much of channelpartners At dead-end product development are often opportunities in sight First 100 days be alert!

VRAGEN EN DISCUSSIE