As springtime arrives the MtB Italy Tour starts! Here you can find the slides we use for our presentations all over Italy. Do not miss the opportunity to get in contact with our speakers and learn from them the key elements to start a new business! Check out all the dates and venues at www.mindthebridge.org

1. MtB Italy Tour
2012
Introduction to Entrepreneurship
From Startups to Venture Financing
ALBERTO ONETTI
Chairman, Mind the Bridge Foundation
MARCO MARINUCCI
Executive Director, Mind the Bridge Foundation

2. AGENDA
Entrepreneurship in Italy: key issues & opportunities
The Startup world
Business Planning
The Venture Capital Market
The Silicon Valley
Mind the Bridge
2

3. AGENDA
Entrepreneurship in Italy: key issues & opportunities
The Startup world
Business Planning
The Venture Capital Market
The Silicon Valley
Mind the Bridge
3

4. The Problem we have (1)
 Italy has grown slowly during the past decade – slower than
Germany, France or the UK (0.27%/yr. since 2001)
 Its competitiveness – its rising unit labor costs – has slipped, as wages
rose but productivity stagnated
 Source: “Italy. Europe’s Investment Opportunity”, White Paper by Vietor, Onetti &
Napolitano, New York, 2011
5,0
Real GDP growth (Percent)
4,0
3,0
2,0
1,0
0,0 ITA
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-1,0 EEA
-2,0
-3,0
-4,0
-5,0
4
-6,0 Source: OECD Economic Outlook 88 database

5. The Problem we have (2)
 Unemployment is lower than the German/French experience BUT
 Participation rate (58%) is the second lowest in Europe
 Worst employment problem pertains to youth (28% unemployment
for people between 15-24)
 Source: “Italy. Europe’s Investment Opportunity”, White Paper by Vietor, Onetti &
Napolitano, New York, 2011
1,5
Average TFP growth (Percent)
1
0,5
1980-1995
1995-2005
0
ESP ITA GBR DEU EEA FRA US
-0,5
-1 Source: EU KLEMS database
5

6. State of Entrepreneurship in Italy
 Lack of large companies
 In Italy SMEs are 98% of the total
 Mostly mature business
 Primarily Services (66% of GDP)
 Manufacturing is only 17% (it was 21% in 2000)
 Innovative industries play a minor role (2-6%)
 Strong family business vocation Food
Textile Wood
Metals
Plastic&Rubber
Automotive
Industrial Machinery
Chemical
Electronics
Pharma
Biotech Software ITALY: INDUSTRY CONTRIBUTION TO GDP (2009)
Source: CrESIT 2011

7. State of Venture Finance in Italy
Annual VC Investments in Billion US $
US 28,425
Silico… 11,63
2011
Europe 5,69
Italy 0,108
 Lack of an established venture capital community
 Of the €3.66B invested yearly (avg. 2007-2011), approximately €90M
went to early-stage investments, AIFI & PricewaterhouseCoopers 2007-
2011
 356 startups were able to get funded in the last five years
 In 2011: 106 early stage deals despite the financial crisis (+34%
compared to 2009) with € 82M invested (-16% compared to 2009), AIFI
& PricewaterhouseCoopers 2011
 Small size of the stock market
 The stock market capitalization to GDP ratio is lower than 60%, versus
140% in the US and 170% in the UK (IMF & World Federation of Exchange)
7

8. Italian active VCs invested over
~ 450M€ in ~ 120 deals
Active Venture Capital firms Not exhaustive selected
Invested Capital - M € examples
# of Firms in
Portfolio
Venture capital created following 2008
Source: Booz & Company Analysis
8

9. State of Italian R&D
 Quality basic research
 74k scientific publications in the period 1996-2010 ranking 8th in the global
classification (SCImago Journal & Counrty Rank, 2010)
 Italy is in the top 10 countries (4th position) for number of publications
(2001-2011) in comparison to R&D expenditure in 2011 (Italian International
Growth agenda, Booz&Co analysis)
 Biotech: 660 clinical trials in progress during 2010, 15.7% of the overall
number in Europe (Osservatorio Nazionale Sperimentazione Clinica 2011)
 Issues in turning research into business
 Lack of efficient technology transfer offices
 Universities do not offer incentives for lecturers to spin-off business initiatives
 Scarcity of skilled executives with strong entrepreneurial skills
 Italian scientists do not think business
9

10. Italy: Key Issues
 A few startups often lacking high-quality business plans (deal “trickle”)
 Legal barriers to entry and exit (Italy is not a “corporate haven”)
 Reduce labor market rigidities
 Obstacles in bridging research into business
 Lack of managerial skills
 High mortality (“crisi del primo miglio”) and “Dwarfism”
 Change the mindset
 Lack of seed funds
 Exit on the domestic market
 High Tech “Leviathans” are not here
 Small size of the stock market and lack of large corporations doesn’t
help
 Language barriers
10

11. AGENDA
Entrepreneurship in Italy: key issues & opportunities
The Startup world
Business Planning
The Venture Capital Market
The Silicon Valley
Mind the Bridge
11

12. Ingredients for a Start-up
12

13. What is an Entrepreneur
13

14. Average Entrepreneur’s Profile
AGE 41 year old 68.8% between 35-43
SEX 79.7% men 20.3% women
STUDIES 64% University student
MARITAL STATUS 60% married
FAMILY BUSINESS 60.3%
COMPANY ORIGIN 76% Creation 20% Inheritance 4% Purchase
FINANCE Own/Family/VC
EMPLOYMENT IN 5
5 YEARS 14

15. MtB Entrepreneur’s Profile
 He/She is 32
 87% is male, only 13% is
female
 49% has a
scientific/technological
background, while 51% has a
business/humanistic
education
 25% holds a Ph.D. or MBA
and the 20% got it abroad
 Only 10% does not hold a
university degree
 21% has prior entrepreneurial
experience
Source: CrESIT/Mind the Bridge 2011
15

16. What makes a successful
entrepreneur?
Education matters a lot
 2.0 Startups are founded by highly
educated people
Experience matters as well
 Being a serial entrepreneur is a job
 The right startup is never the first
one you found
Working/Studying abroad does open
your mind
 It means more network,
opportunities, ideas, experience
A successful startup is a team effort
 One-man bands do not go too far
16

17. Manager vs Entrepreneur
• What resources do I control? • Where is the opportunity?
• What structure determines our • How do I capitalize on it?
organization’s relationship to
its market? • What resources do I need?
• How can I minimize the • How can I gain control
impact of others on my ability over them?
to perform?
• What structure is best?
• What opportunity is
appropriate?
The typical The
administrator entrepreneur
asks . . . asks . . .
17

18. Scientists vs Entrepreneurs
18

19. AGENDA
Entrepreneurship in Italy: key issues & opportunities
The Startup world
Business Planning
The Venture Capital Market
The Silicon Valley
Mind the Bridge
19

20. Business Idea
THE BIG IDEA!!!
… THAT MATTERS A
LOT, BUT IT’S ALL
ABOUT EXECUTION …
20

21. The question every entrepreneur
must answer
Are my Goals Do I have the Can I execute
well defined right strategy the strategy
• personal • clear definition • resources
aspirations • profitability • organizational
• business and growth infrastructure
sustainability/ potential • the founder’s
size • durability role
• risk profile (sustainability)
• rate of growth
21

22. The Business Plan
“Business plans and 5 years financial
projections are a waste of time”
Dave McClure
Intel 1968
“They came to me with no business plan”
22

23. The Lean Startup
23

24. The Business Plan
THE OPPORTUNITY THE MARKET
 The problem we solve (description  The market you are addressing
of your product highlighting the  Market size
benefits to the users/customers)
 Potential growth
 The competitive advantage (why
your product is better)  Competition
 Compelling reason to buy
BUSINESS PLAN
THE BUSINESS MODEL
 How do you make money
(Revenue Model)?
 How do you structure activities THE TEAM
(Cost Structure)
 Financials  The team
 What are you looking for (capital you  Your relevant experience in
are raising- use of proceeds) the domain you're addressing
24

25. Why a Business Plan
25

26. Good and Bad Business Plans
• Concise
• Management, management, management
• Realist, logical, convincing, clear
Good
• Shows clearly that the opportunity exists in the market
• Description of essential resources
• Risk analysis
• Clear funding needs and return on capital employed
• When funding is required, specify the terms of agreement (deal)
• Infatuation with the idea
• Insufficient research
• Lack of funding
• No target group
• Over optimistic sales forecasts not based on market analysis
Bad
• Too long
• Badly written: does not get ideas across
• Illogical
• Scant explanation of opportunity
• Superficial analysis of competitors
• No executive summary
26

27. Talking $$$
27

28. Financials: Key Data
Bookings Billings
Revenue Cash-In
Cash on Burn
Hand (net/gross)
28

29. Financials: Statement of Operations
P&L 2011 2012 2012 2013 2014
established anticipatory forecast forecast forecast
Revenue (000)
# of main
customers users
Avr rev. per
cust.
Gross Margin
Operating
Expenses
Operating
Margin
Ebit (000)
Headcount
R&D
Mktg & Sales
Production
G&A
Total Expenses
Source: Mind the Bridge 2012

30. How to present the Financials
Source: Alberto Onetti, Financials: Forecasting&Reporting 30

31. AGENDA
Entrepreneurship in Italy: key issues & opportunities
The Startup world
Business Planning
The Venture Capital Market
The Silicon Valley
Mind the Bridge
31

32. The Funding Decision
Bootstrapping Equity Financing
Family/friends,
Founders’ capital/
Early sources savings
Angels, Early stage
VC (Series A)
VC (Series B+),
Venture Debt/Loans,
Corporate VC,
ARs, Strategic
Later sources Partners, Retained
Private placement,
Investment banking,
earnings
Public markets
32

33. Investment Strategy
Medium Risk High Risk Medium Risk Low Risk
IPO
M&A
Valuation
M&A
Investment
Focus
Cumulative
Investment
IDEA DEVELOPMENT BETA CUSTOMERS EXPANSION MARKET SHARE
12-24 months 3 months 3-6 months 12-18 months 12-24 months
Management Focus
Vision/ Product Focus Customer / Market Share Focus
33

34. The Angel Investor
Definition
• High net worth individual ($1
million to invest) who provides
financing, advice, and
networking to early stage
companies.
Key investment Criteria
• Geography (close to home)
• High growth industry
• Growth Potential of the venture
• Personal attributes of the
entrepreneur and team
• Track record of entrepreneur and
team
34

35. The Venture Capitalist
DEFINITION
• VC Firms are financial intermediaries that
provide the following to privately held
enterprises:
• Equity (often coupled with debt) financing
• Risk sharing
• Managerial expense
• Contacts
• Reputation
• In exchange, VC firms obtain equity
TYPES OF VCs
• Private Fund VC
• Legal Structures: Partnership, Limited Liability
Corporation, Corporation
• Stakeholders in a Partnership: General Partners
(GP), Special Limited Partners (SLP), Limited
Partners, Advisory Board
• Corporate VC
• Consider impact on earning of parent
• How does it further the parent’s objective?
35

36. VC: General Investment Process
Limited Partners
Distributions Fundraising Commitments
VC Firm (General Partners)
Fund Fund Fund
Proceeds Investment Disbursements
Startup Companies
Exit
IPO/M&A
36

37. The Valuation is a two side process
 Size of market opportunity
how big is the market segment, what market
share can you gain? revenue / price model
 Comparables
multiple of Revenue (trailing/forward) or
EBITDA
 Financial Projections
Revenue, EBITDA, DCF
 Ultimately
Bid vs. Ask negotiation
37

38. The Valuation Process:
Pre- e Post-Money Valuation
How much you need How much equity you
(Cap Incr) want to give up ( Y%)
e.g. € 1,0M e.g. 25%
Post Money Valuation (V)
= Cap Incr / Y = 1/0,25
= € 4,0M
Pre Money Valuation
= V - Cap Incr
= € 4,0M - 1,0M= € 3,0M
38

39. VC Financing Process:
Getting through the Funnel
1,000 Leads
150 Meetings
Actively
Pursued
70
$
Less than 1% of all $ 5 – 10
leads get funded $ Financed
39

40. VC Average Investment Portfolio
DEFAULTS 60%
BREAKEVEN 12%
“FIRE SALES” 10%
ZOMBIES 8%
IPO/M&A 6%
GOOD IPO/M&A 4%
WILD ONES (IPO) 0%
TOTAL 100%
Source: ATV 40

41. What does an investor do with a BP?
Looks to see who sent it
15 sec
Analyzes key aspects
sector
location
investment required
60 sec
Reads the plan
15 min
Decides whether or not
to request a formal
presentation
10min
Total: 26 min 15 sec
41

42. VC Average Investment Portfolio
Remember:
 VCs see tons of pitch every day  be short and
immediate, use body language and show passion
 They don’t know your product  use screenshots,
videos, prototypes
 They are positively impressed by big numbers and
they look for big market opportunity  be ambitious
since the beginning but have realistic objectives.
 They are not always expert as you are about the
topic  use simple words, get straight to the point
 Smile  it’s ok to have fun when you pitch
42

43. Agreement Variables and
Control Mechanisms
Agreement Control
• Amount and timing of
investment Mechanisms
• Form of investment
• Convertible
• Terms of investment Preferred securities
• Rights • Syndication of
• Puts and call investment
• Registration • Staging of capital
• Preemptive and first infusion
refusal
• Vesting/buy-back
provisions
• Board representation
43

44. Why Venture Capital?
44

45. AGENDA
Entrepreneurship in Italy: key issues & opportunities
The Startup world
Business Planning
The Venture Capital Market
The Silicon Valley
Mind the Bridge
45

46. The History of the Valley
46

47. The (REAL) History of the Valley
47

48. The (REAL) History of the Valley
INTERNET
? Today:
25 of Fortune 100
PERSONAL Adobe Systems
COMPUTERS AMD
Agilent Technologies
Apple Inc.
WAVES OF INNOVATION
Applied Materials
Business Objects
Cisco Systems
INTEGRATED ◊ Yahoo, ebay,
eBay
Electronic Arts
CIRCUITS Google (90s) Google
Hewlett-Packard
Intel
◊ 3Com, Adobe, Intuit
Cisco LSI Logic
Maxtor
DEFENSE ◊ Apple (80) National Semiconductor
Network Appliance
Nvidia
Oracle Corporation
◊ Kleiner Perkins SanDisk
(72) Seagate Technology
Solectron
◊ Intel Symantec
(68) Sun Microsystems
Yahoo!
◊ HP (47) …
◊
◊ NASA Lockheed
1930 1940 1950 1960 1970 1980 1990 2000
48

49. UNIVERSITIES
highly
connected with
The Main Pillars
biz world
ENTREPRENEURS
The garage
culture
FINANCIAL MARKET
M&A, IPO dream
KEY QUESTIONS
◊Is that replicable / portable?
◊Is it sustainable long-term?
◊What is the impact of the changing
49
international outlook?

50. Soft Factors
KEY TO SUCCESS
◊The importance of Dynamism,
speed: continuous evolving world
◊ Approach to Risk
◊ Value of Failure (not just a
downside but a must-have)
◊ Importance of the Hub: a world of
opportunities
◊Think Big
50

51. Raising money today (@#$!)
in Silicon Valley
DON’T TALK TO ME IF YOU…
are you not local
how many exits again?
don’t show me the buyer (don’t
IPO me…)
haven’t jumped yet
51

52. Investments B US$ (1998-2011)
US Silicon Valley
99,2
51,3
38,1
31,9 30,8 30,5 28,4
26,6 23,3
19,8 20,8 22,4 22,9 19,7
16,7 18,6
11,8 9,6 11,3 11,2 9,2 11,6
5,4 6,9 6,4 7,8 8,0 8,1
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Deals (1998-2011)
US Silicon Valley
8.032
5.590
4.582
3.827 4.124 4.111
3.728 3.526 3.673
3.183 3.004 3.178 3.262 3.065
2.176
1.698
1.048 1.115 997 1.222 1.283 1.281 1.057 1.158
814 878 955 968
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: MoneyTree Report 2011, Data: Thomson Reuters 52

53. Why Now
IT’S THE BEST OPPORTUNITY
talent abounds
from scarcity comes clarity
innovation comes from hunger
startup cost ~0
53

54. 5 Lessons from Silicon Valley
1. the team is all (almost)
2. healthy disregard for the
impossible
3. big problems are better than
small ones
4. users first
5. don’t pay attention to the
VC bandwagon
54

55. AGENDA
Entrepreneurship in Italy: key issues & opportunities
The Startup world
Business Planning
The Venture Capital Market
The Silicon Valley
Mind the Bridge
55

56. Mind the Bridge Foundation
Mission:
to promote a new Italian entrepreneurial ecosystem that is:
ETHICAL, HIGHLY PROFESSIONAL, INTERNATIONALLY FOCUSED,
EXCELLENCE DRIVEN
Model:
CONNECTING TALENT
funded by foundations/companies/private sector/donors
not government
partnering with the most relevant actors
INDEPENDENT
 bridging opportunities of the Silicon Valley with Italian
talent
 associating mentors and role models
 professionalizing the business planning skills
 using and building the network
 “give back” to build a bigger pie
56

57. Building the Bridge: the Pillars
 Discovering and Nurturing the Italian Talents
MtB Italy Tour 2012
 Selecting the best of breed
Call for Funding
 Providing training & education to the new generation of
entrepreneurs
MtB Startup School, MtB Bootcamp and MtB Coaching
 Showcasing the most promising startups and opening an
international debate
MtB Venture Camp @ Corriere della Sera
 Hosting & Mentoring the most promising startups in the Silicon Valley
MtB Gym
 Pitching US investors / partners
MtB Gran Finale events
57

58. Building the Bridge: the Timeline
MtB Startup
School
Every1-2 months
MtB US
MtB GYM Roadshows
Feb/March March/April
MtB Venture Camp 2013 2013
November 2012
MtB Call for Funding 2012
July 31st 2012
MtB GYM
MtB Italy Tour 2012 Every Quarter
Q1 & Q2
- MtB Affiliates
- Online Signups 58

59. MtB Italy Tour 2012
 Education
The MtB Startup Business School gives you
the “nuts and bolts” regarding
entrepreneurship, business planning,
venture capital market and Silicon Valley
eco-system
 Honest Feedback
Thanks to the Gym session the startups selected have the
opportunity to present their business idea in front of a panel of
investors and entrepreneurs
 Fine tuning the business idea
Everybody can largely benefit from the discussion of all the
business ideas as well as the education program in the
morning
59

60. NEW! Early Call 2012
Deadline was April 15th but..
Since you submitted your business plan for the Italy Tour in Trento you
can be eligible for the Early Call too!
What does it mean?
You can win a seat at our Startup School for one
of our Summer Edition and you will be considered for the
Call for Funding 2012!
Again.. What does it mean?
60

61. Call for Funding 2012
WHO: High knowledge based companies already
established or planning to incorporate before the end
of the year
WHAT: Executive Summary (online*) & Business
Plan/Pitch Presentation
WHEN: Deadline July 31st , 2012
HOW: Competition Rules*
* Check it out at www.mindthebridge.org
61

62. 2012 Selected
Startups
62

63. 2012 Winner
Italian Innovation Day
Elena Favilli and
Francesca Cavallo
Berkeley
February 23rd

64. Venture Camp 2012
Mind the Bridge Venture
Camp is a 2-day event held
each year in Milan at Corriere
della Sera (the leading Italian
newspaper) to promote a
healthier Italian
entrepreneurial ecosystem.
Selected entrepreneurs
present their business ideas to
a large audience, including
potential investors and November 2012
partners.
Selected startups will be invited to participate in the MtB Gym, a
tutoring program between Italy and the Silicon Valley.
64

65. Opportunities for good ideas
Objectives
MEET MtB Call for Funding
Fostering a sustainable Italian 2012 finalists showing their
ecosystem for entrepreneurship business pitches
Boosting ideas with high potential
Providing entrepreneurs with
direct exposure to venture FIND successful
capital investors both from links between
Italy and Silicon Valley Italy and Silicon
Valley
NETWORK with entrepreneurs, potential LEARN from examples of Italian
investors, partners and mentors entrepreneurial success
NETWORK with
entrepreneurs, potential
investors, partners and
mentors

66. MtB GYM
“Let’s build a mentorship based acceleration program”
Targets
Early stage startups interested in a
getting plugged into Silicon Valley
Italian “origin”
Min 3 months, average 6 months.
Starting at beginning of each
quarter possibility to stay longer
(as an affiliate startup)
San Francisco
@One Market We share the space with some of
Plaza the hottest startups (50+) in Silicon
Valley (Socialmedia.com,
WordPress, Tweetme, etc.)

67. The Gym’s Goals
Accelerate the startup
chances of success
• Hosting: office space
@One Market Plaza, Steuart
Tower in San Francisco
• Mentoring: assign a
dedicated mentor per
startup
• Coaching: provide regular
classes (training modules)
Build critical mass of startups
A constant flow of startups hosted(10-15) to maximize
the “educational impact”
Become a social hub for Italian entrepreneurship in
Silicon Valley
Events, Mind-the-Beer, etc (social Gym)
Access
Affiliates Channel
Individual Subscriptions 67

68. Building Success Stories
April 2012 March 2011
Enters 500Startups (+$65K) Round of $500K with Angles
(Piol, Magnocavallo)
Feb 2012
$1.2M round with IAG, Dec 2011
Innogest, Xcapital Wins LeWeb
Feb 2012
Wins Seedcamp Berlin, raises March 2011
$1.350M (Seedcamp, industrial Wins Plug&Play Intl startup
partner) EXPO SV, raises $700K (Sep
2011)
September 2011
Second round of $1.1M funding
(IAG, ZernikeMeta Ventures)
Feb 2012
April 2011 - EXIT $1M+ round with Filas Lazio
Merges with Avrio RMS Group (US) and Angels Investors
Since Gym inception (Aug 2010):
winners
18 startups incubated,
8 funded ($5M+), 2 exits 68

69. MtB Startup Summer School
Be a Silicon Valley Startups for 3 weeks!
SESSIONS
Five sessions are scheduled in the
next months
Who can participate?
1. May 7th – May 25th Students, Graduate students
2. June 4th – June 22nd
Engineers, Scientist
3. July 9th – July 27th
4. August 6th – August 24th Wannabe Entrepreneurs
5. September 2nd – September 21st
APPLY NOW!
WHERE?
One Market Plaza, Steuart Tower,
San Francisco
HOW TO APPLY?
Check it out here!
www.school.mindthebridge.org
69

70. MtB Startup Summer School
Theoretic Learning:
 Introduction to the Silicon Valley
Ecosystem
 Investment Outlook and Success
Drivers
 Value Proposition workshops
 Presentation Skills
mentoring
 Business Development
 Marketing & PR weekly presentation
 Corporate Financial Reporting
 Corporate Operation and Legal
Aspects
 Intellectual Property Rights
+ Networking Events
 Visa Options
 The Exit Strategy
70

71. THANK YOU FOR YOUR
ATTENTION
Questions & Answers
SOCIAL MEDIA:
Facebook: WEBSITE
Mind the Bridge - Connecting Talent
WWW.MINDTHEBRIDGE.ORG
Twitter: MindTheBridge
WWW.SCHOOL.MINDTHEBRIDGE.ORG
Google+: Mind the Bridge Foundation
WWW.GYMNASIUM.MINDTHEBRIDGE.ORG
http://mindthebridge.blogspot.com
http://www.youtube.com/user/mindthebridgeTV
http://siliconvalley.corriere.it/ CONTACTS
http://www.linkedin.com/groups?gid=2142980 information@mindthebridge.org