1. The document summarizes a presentation given by Dr. Robert C. Bush Jr. on the myths and realities of starting companies. It discusses common misconceptions around entrepreneurship and provides a more accurate view of what it takes to be successful. 2. It also outlines the typical strategy of venture capital firms, which involves making calculated bets by funding a large number of early stage projects and companies, then doubling down on the top 20% of performers after seeing initial traction and results. 3. When pitching an idea, the reality is that entrepreneurs need to demonstrate they understand customer needs, how the product solves a problem, how it is unique, and how they will measure success - rather than relying on myths around

1. July 31st, 2013
„Summer
School
2013
Newsgames
“
at
RTL
Journalistenschule

2. July 31st, 2013
“The
myths
and
reality
of
star@ng
companies”

3. Table of Contents
I. About Robert C. Bush Jr.
II. Who is curtis newton?
III. The Financial Logic of Starting a Company
IV. The Myth of Starting a Company
V. Strategy of Venture Capital Companies
VI. Pitching Mistakes

4. • CFO at curtis newton gmbh, Cologne (Germany)
• Founding principal of Majlis Partners, a merchant advisory firm based in Dubai,
United Arab Emirates. Serves as a key advisor to governments, institutions, and
family businesses on foreign direct investment, asset management, and corporate
governance.
• More than 20 years of professional services experience in investment banking and
alternative investment management, including Islamic Finance.
• Former Managing Director of Istithmar PJSC, a private equity and alternative
investment firm with $10 billion AUM, established in 2003 by HH. Sheikh Mohammed
bin Rashid Al Maktoum, the Ruler of Dubai and Vice President of the UAE.
• At the start of his career in 1989, Mr. Bush practiced mergers and acquisitions and
merchant banking at Merrill Lynch.
• Bachelor‘s degree in philosophy from Amherst College, Amherst MA, USA.
• Master’s program at Paul H. Nitze School of Advanced International Studies, The
Johns Hopkins University. Studied international economics with a regional focus on
Africa and the Middle East. Recipient of a Frank Savage Fellowship.
• Juris Doctor degree, The University Of Virginia School Of Law
I. About Dr. Robert C. Bush Jr.
4
LinkedIn profile
http://de.linkedin.com/pub/robert-c-bob-bush-jr/70/33/a58

5. • As a driving force behind numerous startups since 2005, and the developer
of new, digital innovations, curtis newton embodies the successful fusion
of idea-makers with a skilled team.
• Our passion lies in introducing new brands, conquering new markets and
helping shape the digital future – and our network accelerates our
progress.
• curtis newton is active in the following industries: Digital Innovation,
Social Media, Social News, Social Search, Pioneering digital projects, Travel
Industry, Publishing Industry
Portfolio (selection) +itravel
I. Who is curtis newton?
5
Social News Aggregator
www.virato.de
Social News Analytics Tool
www.virato-analytics.de
Twitter Topics Analytics Tool
http://app.socialtopicgraph.com
itravel Individual Travel GmbH
www.itravel.de

6. How many years do you need to work?
Owner Small Business Employee
III. The Financial Logic of Starting a Company
6
• Built over three years
• Generating profit € 100k/year
• 40% taxes à € 60k/year
• Sold at 10* earnings à € 600k
Gross salary € 100k
Taxes 45%
Savings 33%
Savings/year € 18,150
Years 33.1
Net € 600k

7. 1. Need big original ideas
2. Entrepreneurs are born
3. You have to be first
4. You need lots of €
5. Do something you love and the € will follow
6. You need to take big risks
7. You have to be young to start a company
IV. The Myth of Starting a Company
7

8. “Everybody has a plan until they get punched in the mouth.”
Mike Tyson
8

9. Myths
1. Need big original ideas
2. Entrepreneurs are born
3. You have to be first
IV. Starting a Company – Myths vs. Reality(1/2)
9
Reality
1. Usually small ideas in proven markets work better
• 90% new business fail (10% product/80% lack of market)
• 70-90% of ideas come from previous employment or existing
contracts
2. Some correlation between psychological traits and
entrepreneurship but it seems many people learn or
acquire attributes needed
• Belgian students: 5% have run own business
• American students: 60% have run own business
3. Fast seconds win fast as often
Product Innovator Winner
Diet Cola R.C. Cola Coca Cola
Microwave oven Raytheon Samsung
Video Games Players Atari Nintendo
Web browser Netscape Microsoft

10. Myths
4. You need lots of €
5. Do something you
love and the € will follow
6. You need to take big
risks
7. You have to be young
to start a company
IV. Starting a Company – Myths vs. Reality (2/2)
10
Reality
4. Why do people start a new business?
• € / independence / no alternative / < hours
• 0.03% of new companies financed by venture capital
• Average amount of € used to start a business is 20k USD
• Common source of capital: savings and personal debt
5.
6. Successful entrepreneurs remove risks not take risks
7. The average age of a 1st-time entrepreneur starting a
technology business is 39 in the USA
What
are
you
good
at?
What
do
you
like
to
do?
What
people
will
pay
you
for?

11. 2.
After first 6-12 months,
identify best performers
double-down on top 20%
70 %
Fund
Capital
1.
Start with large, well
screened funnel of early
stage companies or ideas
around key themes
3.
Build conservative model
assuming 5-10% larger exits @
> $100M, 10-20% smaller exits
@ <$100M
30%
Fund
Capital
V. Strategy of Venture Capital Companies - Calculated
Bets on the Funnel
Quantitative Investing before
Traction
50 projects @ $$$K avg. (1st check)
- Assume high failure rate (up to 80%)
Double-Down after
Traction
10+ ‘winners’ @$$$$K-$$$M
(2nd + 3rd check)
- -
Target 2+ exits
@ $$$$M+

12. V. Strategy of Venture Capital Companies
12

13. Myths
• Market research – consumers
are incapable of envisioning
the future, you just have to
give it to them
• Product is viral – CTR on
Facebook are 2% about the
same as banner ads
• Market size is xxx billion
Take 4 typical questions
1. What problem are you trying
to solve?
2. What is your target market?
3. What is unique about your
product versus what is
currently in the market?
4. What do you need?
VI. Pitching Mistakes – Myths vs. Reality
13
Reality
• Even Steve Jobs was not Steve Jobs
• Until a product is viral it‘s not viral
• You don‘t know how to analyzeyour
addressable market if your market is billions of
euros.
4 hard questions
1. How do you know what your customers want?
2. How do you know that your customer will pay
for your product?
3. How will competitors respond to your entry?
4. What are your KPI‘s?

14. July 31st, 2013
Ques@ons?

15. Dr. Robert C. Bush Jr.
Mail to robert.bush@curtis-newton.com
Address • curtis newton gmbh • Venloer Str. 151-153 • 50674 Cologne, Germany •
Phone +49 221 29218 - 400 • Fax +49 221 29218 - 599
Follow us here fb.me/curtisnewtonlab • @curtisnewtonlab
Web www.curtis-newton.com
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