Grow VC and South East England Development Agency event about startup funding

1. Finance for Mobile and Internet Businesses South East England Development Agency October 15, 2009

2. 1. Developing GlobalInternet Businesses Challenges and opportunities www.growvc.com 2

3. www.growvc.com 3 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

4. 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 4

5. 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 5

6. Challenges of funding market 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 The role of early stage investors is very risky and often unprotected Early phase funding is often too risky and expensive for VC organizations  moving towards more mature later phase deals Only the market can often demonstrate the value of a new web or mobile company No patented technology or other concrete IPR’s www.growvc.com 6

7. www.growvc.com 7 Web and mobile servicesfunding 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

8. 2. Grow VC platform forExperts and funding The first global concept www.growvc.com 8

9. www.growvc.com 9

10. Truly Global International Platform where investors, companies, and entrepreneurs can better meet each other and get tools to make transactions effectively New type of investment funds Grow VC has three revenue sources and Grow VC earning model depends on the success of start-ups Includes several components: Match-making tools (between funder and entrepreneur) Software platform for the community Legal, monitoring and reporting framework Involvement of top experts in venture funding and industry verticals Growth and funding enabling services Future steps like investment pool and community recommendations for investments Grow VC model www.growvc.com 10

16. Timetable June 2009: Private Beta Match making service for investors and start-up firms Direct investments from private investors to companies September 2009: Public Beta open for all users, and some additional features like: Service / work commitment investments Additional tools to manage business plans and negotiations Coming soon: Investment Pool Totally new fund model Anyone can be a Venture Capitalist Standard templates to make investments in pre-defined locations www.growvc.com 16

17. Legal services Experienced corporate and investment lawyers for helping companies, investors, and entrepreneurs to make investment agreement and other needed paper work Auditors Top tier audit firms for due diligences, audit annual reports, and maintain reporting templates Corporate finance and investment bank services Top tier finance service companies for helping in investment process, help to find later phase funding, and make exit Banks Leading banks for managing transfers and payments and cash for investments Grow VC Local Partnersexamples 1 www.growvc.com 17

18. Local Authorities, Incubators, Accelerators Support companies or holding companies in investment process, find co-investors, and get business development services Universities Introducing university spin-off’s to real markets, to test traction. Build international co-operation and contacts Event organizers Extend the reach of events to international marketplace, introduce new startups and investors to network. Market events to Grow VC users for place to meet face to face Grow VC Local Partnersexamples 2 18 www.growvc.com

19. Investment policy All start-up companies are web or mobile companies Company’s offering and products are or will be available and visible in web or mobile All members have a right to evaluate and rate companies The rating is directly used in the investment decisions Investment money comes from private investors, entrepreneurs, and investment partners Investor community also manages investment decisions ”Godfather” concept Companies can take a godfather that increase their credibility and the godfather can be, for example, in the board after the investment Gadfather can be e.g. an incubator, well know business angel, or well know expert in the business area in question www.growvc.com 19

21. Community of investors and entrepreneurs

22. Match-making

23. Service investments

24. New fund model

25. 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

26. www.growvc.com 21 Summary Grow VC International offers a new global service to enable early phase funding Focus on web and mobile companies Targeted at web and mobile companies that need $10,000 to $1,000,000 funding Total transparency is essential for the service Grow VC will offer three main services: Match-making for business angels to fund investment opportunities and for startups to find private investors Service investment match-making, professionals can invest their time and work in startup instead of dollars “Social investment pool”, i.e. open investment fund that makes investments into startups based on its limited partners voting decisions

27. www.growvc.com 22 Would you like to manageVC money? Available soon in laptop near you http://www.growvc.com/my-vc-money

28. 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