Managing Partner (London), was CEO of SOFTBANK Emerging Markets, a $200 million fund established by SOFTBANK Corp. and the International Finance Corp., from 2000 to 2002. He launched and operated offices in Kuala Lumpur, Istanbul, Warsaw, Johannesburg and San Francisco. Prior to joining SOFTBANK, Matt was a strategic consultant to a number of venture-backed startups focusing on capital formation, business development, and alliances. Until February 1998, Matt was General Manager of Sony Online Ventures, and Senior Vice President of Sony New Technologies, the strategic development arm at Sony Corp. of America

1. Show Me the Money
TechMeetups
7th July 2014
Idea London
Matt Rothman, Managing Partner

2. Overview
• Hemisphere
• Funding strategy
• Investor selection
• Presentation
• Terms
• Timetable
2

3. • Investment and advisory
• Focus on platforms
• Growth stage
• International expansion
• Portfolio of six companies
• Raised capital in San Francisco, New York &
London over the past 13 years.
3

4. Source: © DJX VentureSource
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
2009 2010 2011 2012 2013
US: Average Deal Size
(2009-2013) ($M)
Seed Round First Round Second Round Later Stage
Linear (Seed Round) Linear (First Round) Linear (Second Round) Linear (Later Stage)
$3.71
$0.76
4

5. Source: © DJX VentureSource
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
2009 2010 2011 2012 2013
Europe: Average Deal Size
(2009-2013) ($M)
Seed Round First Round Second Round Later Stage
Seed Round First Round Second Round Later Stage
Linear (Seed Round) Linear (First Round) Linear (Second Round) Linear (Later Stage)
$2.26
$
$3$$0.34
5
$0.34

6. Source: © DJX VentureSource
Average deal size 2009-2013
Europe US Difference
Seed Round $0.58 $0.82 -29.9%
First Round $2.79 $4.48 -37.7%
Second Round $5.63 $8.24 -31.6%
Later Stage $11.52 $15.19 -24.2%
6

7. • Funding strategy is as important as product or
marketing strategy
– Rules of the Raise
• Raise more than you think you need
• Raise it when you don’t need it
• Raise it from people who bring more than money
7

8. Select investors
– Stage, HNW (SEIS/EIS), strategic
– With industry or sector knowledge
– Round ‘sweet spot’
– A network of customers and executives
– Experience as entrepreneurs
– Investment track record
– Geography: UK, US, Europe
• Follow-on:
– Participate in the next round
– Who they co-invest with
• Advisors & Governance
8

9. Presentation
– Focus on a single business line
– Address business objections upfront
• Revenues, marketing, opportunity size
– Show don’t tell
– Pitch by analogy: examples that amplify/validate
– Concept vs Data driven (vision vs numbers)
– It will be all about execution risk
9

10. Presentation content
• Opportunity size: TAM, pipeline
– Customers/users: how many, how long? Quotes
• Team: history, skills, talent
• Risks
• Competitive landscape: identify USP
• Metrics: measure success
– Users, partners, growth, revenues, profits
– If you can’t measure it, you can’t manage it
10

11. • Product pipeline
– Where is it now? Milestones
• GTM
– Execution, experience, holes
• Financials: paperwork
– Reasonable assumptions
– Comparables
• Use of Funds
• Recap the focus, forecast and funding needs
11

12. Terms
• Valuation – the market decides
• Series/round
• Leaders & followers
• Syndication
• Convertible debt
• Warrants/options
• Founders shares
12

13. Timetable
• 90 days
• Due diligence: legal and financial
– Cap table
– Customer contracts
– Employees
• Legals
• Closing
• Next round – valuation appreciation
13

14. Matt Rothman, managing partner
matt@hemispherecapital.com
14