- VC Market - Embedded connectivity solutions - HW and platform business - Web and mobile businesses - Go-to-market - Challenges of funding market - Mobile services funding

1. Risk Assessment of Embedded Connectivity Propositions London, January 27, 2010Jouko Ahvenainen

3. Working on 2.0 business models, ecosystem, and funding models

4. Mobile and 2.0 business experience

5. Co-founder of the first social network analytics company, www.xtract.com

6. On the boards of various start-up companies, and a co-founder or seed investor in 6 companies

8. Senior positions: e.g. Cap Gemini Ernst & Young, Powerwave Technologies Inc., Nokia, and Sonera

11. Community of investors and entrepreneurs

12. Match-making

13. Service investments

14. New fund model

15. Support for investment process and materialsPrivate Investors,e.g. angels Start-upXXX InvestmentPartners, e.g. VC Start-upYYY Entrepreneurs who looks forfunding Start-upZZZ Investment process:Managed by community

16. www.growvc.com 5

17. Embedded connectivity Two Models www.growvc.com 6

18. www.growvc.com 7 Background The business environment of fast-growth companies has changed significantly over the past 15 years Internet and web 2.0 spreading funding model global #1 in their niche VC’s and business angels – typically local Immediately global web and mobile companies look for global smart money, not limited to single country or state New funding models are needed for early phase, but also to cover the needs of different kind of companies  not only one type risk money

19. VC Market Traditional VCs are shifting focus on more mature companies Often at least 1M€ annual revenue US VCs spent only $17.7 billion on 2,795 different deals last year, the lowest dollar amount and number of investments since 1997 (source: Thomson Reuters) Limited Partners’ interest to invest in traditional European VC funds collapsed in the last year, e.g. only one investment in Q3 (source: Go4Venture) In practise traditional VC’s don’t make investments in early phase companies Only if you have a product and / or revenue www.growvc.com 8

20. Embedded connectivity solutionsTwo categories Hardware and more demanding application platforms Include typically significant R&D work and require high level technical competence  technology risk Longer development cycles and patentable solutions Traditional VC funded cases Applications End-user applications based on basic mobile functionality or on proprietary platforms Short development cycles, users’ feedback important  market risk Difficult cases of traditional VC’s www.growvc.com 9

21. 1. HW and platform business:Technology business with new rules The ecosystem is changing Operators role is fading & operators are often the slowest and most expensive route to the market Direct consumer access become more important Technology is changing Application development easier Internet type platforms APIs offer data and services, e.g. location and messaging Risky to develop proprietary solutions for a few operators  open APIs, open source, and de facto standards www.growvc.com 10

22. 2. Web and mobile businesses:new retail business The new chasm is to get attention and users It is like to sell goods through supermarkets, except No manufacturing costs No logistical issues The number of supermarkets and shelf space is in principle limitless To be successful Users must find your app directly, or You must get good supermarkets to put your add to good shelf space, or Both of these options Smarter analytics and personalization can change this picture, but it happens slowly www.growvc.com 11

23. Go-to-market Listen to market Test your ideas and models Light beta  learn  develop Fast development cycles Use the latest development tools Think your business model It can be free apps, but you should have an idea to monetize But don’t try to monetize too much too early Many concepts are easy to copy  build your brand and position www.growvc.com 12

24. Challenges of fundingmarket 2010 VC market is still a question mark; some positive signs Web and mobile enterprises ARE NOT only new technology enterprises and capital efficiency is high Open source, free tools, fast development The challenge is to get users, not to implement a service Funding requirements are changing New funding models are coming especially for the early phase funding Business angels Crowd-funding and micro-funding, like Grow VC, are coming The market is coming more global Capital efficiency and lean startup model are requirements for all startups www.growvc.com 13

25. www.growvc.com 14 Mobile services funding Immediately global mobile apps companies look for global smart money, not limited to single country or state Step-by-step funding If you cannot start mobile apps business with less than $200k, you must re-think your approach Make it – launch it – improve it Successful companies don’t do it immediately right, but they use money carefully and are able to change course as they learn New funding models are needed for early phase, but also to cover the needs of different kind of companies  not only one type risk money Someone can make simple apps for personal living without world-class ambitious, and need some money to start Another one what to create fast growing business with hundreds of apps

26. A couple of weeks to registerin Grow VC beta for free http://beta.growvc.com/register/form www.growvc.com 15

27. You don’t have to be Steve Jobs to be an entrepreneur You don’t have to be Bill Gates to be an investor Everyone must start somewhere Grow VC – The Place to Grow Jouko Ahvenainenjouko@growvc.comTel (UK): +44 79 1248 1154Tel (US): +1 415 287 0854Skype: jahven www.growvc.com Twitter: @growvc