Venture Capital,
Funding & Pitching
Pieter Kemps
Business Development & Venture Capital, APAC
P_Kemps
A program designed to provide startups with the resources needed
to get started on AWS. Join some of the fastest-growing s...
2 Packages, Many Benefits
Trusted Advisor
Sign Up here:
Venture Capital,
Funding & Pitching
Pieter Kemps
Business Development & Venture Capital, APAC
P_Kemps
Why do we talk about this?
• Work with many startups & APAC’s leading VC’s
• Discuss many startups with VC’s & get feedbac...
Venture Capital Overview
Impact of Cloud on Venture Capital
What is a good pitch?
But first…
Some questions for you
Venture Capital Overview
Impact of Cloud on Venture Capital
What is a good pitch?
Venture Capital
Startups!
Venture Capital
VC Fund
General Partners,
Principals, VP’s,
Associates, etc.
Startups
with need for capital
and growth pot...
2-sided Platform model
Startups
with need for capital
and growth potential
Limited Partners
institutional & high net
worth...
2-sided Platform model
“2 & 20”
So how does a VC make money?
“2 and 20”
Management Fee. VC raises a fund of e.g.
$100M and gets $2M per year to operate
the fund (staff, expenses, etc....
Venture Funding
Source:www.fundersandfounders.com
Source:www.fundersandfounders.com
100%
of nothing
17%
of a Big Companyis a lot less than
August ‘08
Nathan
Brian
Joe
January ’09
$20K Accelerator
Y Combinator
November ‘10
$7.2M Series A:
Sequoia
Greylock
SV Ang...
01 04
idea MVP monetizescale
Product Risk Market Risk Financial Risk
02 03
Product?
Do we have a product?
Can we ship?
How...
01 04
idea MVP monetizescale
Product Risk Market Risk Financial Risk
02 03
Startup 2.0: “Lean Investor” Model
• Incubator ...
01 04
idea MVP monetizescale
Seed RoundSeed Round
Series A, B, C, etc.Series A, B, C, etc.
Incubator / AngelIncubator / An...
What caused the evolution
towards the “Lean Investor”?
Venture Capital Overview
Impact of Cloud on Venture Capital
What is a good pitch?
Q & A
Pieter Kemps
Business Development & Venture Capital, APAC
P_Kemps
Venture Capital Overview
Impact of Cloud on Venture Capital
What is a good pitch?
“Amazon Web Services is probably the most
important thing that has happened to mobile
and web app developers that the pres...
“Amazon changed the VC industry.
This is mind boggling. That online
book company. Not … or anybody
else. Amazon. 100% of t...
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
1995 – .com
Technology Startups requi...
Typical Series ATypical Series A Spent on…Spent on… InnovationInnovation
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004...
Typical Series ATypical Series A Spent on…Spent on… InnovationInnovation
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004...
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2007: Micro VC / Seed
Public Cloud le...
28 startups in Asia
21 startups on AWS
71%
Why do VC’s care?
More deals
Shorter time to scale
Faster time to revenue
Lower ‘burn rate’
Higher valuation at exit
Venture Capital Overview
Impact of Cloud on Venture Capital
What is a good pitch?
Why is your pitch important?
Because it shows you have a
PLAN
What’s always there?
Product
Lots of product, product, product
Rosy Forecast
The infamous hockey stock
What’s always missing?
Business Model
not just WHAT, also HOW
Metrics
not just traction, also unit economics
Strategy
What...
1.Problem
2.Solution
3.Business Model
4.Business Model Metrics
5.Growth Strategy
6.Status / Traction
7.Team
8.Competition
...
1. Problem
Define the
problem clearly
Explain the impact.
Why bother?
What’s the opportunity?
Market size?
Problem Impact ...
2. Solution
3. Business Model
Business Model ≠ Pricing
Costs Structure
Value
Proposition
Key
Resources
Key
Activities
Key
Partners
Channels
CRM Customers
Revenue Streams
Capabil...
4. Business Model Metrics
“I look for signs in a pitch that the founders
understand the mechanics of the business.”
Phil M...
4. Business Model Metrics
Acquisition
 Install / Sign-up (by campaign / channel)
 Conversion (by campaign / channel)
 C...
4. Business Model Metrics
Revenue:
 Average revenue per User (ARPU)
 Av. revenue per Paying User (ARPPU)
 % paying user...
4. Business Model Metrics
Engagement
• 30/10/1 rule*: 30% of
registered is MAU, 10% is
DAU, 1% is peak concurrent
• This m...
????
4. Business Model Metrics
????
4. Business Model Metrics
Avg Time
on Site
Avg Time
on Site
Average Basket
Price
Average Basket
Price
Advertising CTR...
4. Business Model Metrics
Metric / KPI Now Comp A Comp B Comp C Goal
Advertising CTR 1.5% 3% 6% 2.5% 5%
Average time on si...
5. Growth Strategy
Metric / KPI Now Goal Growth Strategy & Actions
1. Advertising CTR 6% 8% 1. A/B test creatives
2. Conti...
10. ASK
Metric / KPI Now Goal Growth Strategy & Actions Costs
1. Advertising CTR 6% 8% 1. A/B test creatives
2. Continuous...
WHEN
do you need to have
WHAT
?
01 02 03 04
idea MVP monetizescale
Seed RoundSeed Round
Series ASeries APitch for Angel Money
Pitch for Seed Round
Pitch f...
Angel Pitch
Show me a
great idea!
1.Problem
2.Solution
3.Business Model
4.Business Model Metrics
5.Growth Strategy
6.Statu...
Seed Round Pitch
Show me
traction!
1.Problem
2.Solution
3.Business Model
4.Business Model Metrics
5.Growth Strategy
6.Stat...
Ash Fontana, Founder of AngelList
Series A Pitch
Show me a
business
&
show me
returns!
1.Problem
2.Solution
3.Business Model
4.Business Model Metrics
5.Grow...
So before you pitch…
Ask some important questions
Where is my startup in its lifecycle?
Do I understand my business model,...
So before you pitch…
And do your homework…
Decide what you look for in an investor
Easy vs Hard, Dumb vs Smart
Investigate...
Questions?
Pieter Kemps
Business Development & Venture Capital, APAC
P_Kemps
[Webinar] AWS Activate Webinar Series for Startups, Funding, Pitching and Venture Capital
[Webinar] AWS Activate Webinar Series for Startups, Funding, Pitching and Venture Capital
[Webinar] AWS Activate Webinar Series for Startups, Funding, Pitching and Venture Capital
[Webinar] AWS Activate Webinar Series for Startups, Funding, Pitching and Venture Capital
[Webinar] AWS Activate Webinar Series for Startups, Funding, Pitching and Venture Capital
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[Webinar] AWS Activate Webinar Series for Startups, Funding, Pitching and Venture Capital

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Startups are always looking for ways to grow and often, capital is one of the most important aspects which is needed to fuel that growth. This webinar provides an overview of Venture Capital and how it has evolved with emergence of Open Source and Cloud.

The webinar also focuses on funding, how to pitch throughout the funding process and provides answers to some of the most commonly asked questions like "What does a good pitch look like" or "What are some of the best practices in pitching". The session will also cover tips from top VC's and startups that raised funds successfully.

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[Webinar] AWS Activate Webinar Series for Startups, Funding, Pitching and Venture Capital

  1. 1. Venture Capital, Funding & Pitching Pieter Kemps Business Development & Venture Capital, APAC P_Kemps
  2. 2. A program designed to provide startups with the resources needed to get started on AWS. Join some of the fastest-growing startups in the world and build your business using AWS.
  3. 3. 2 Packages, Many Benefits
  4. 4. Trusted Advisor
  5. 5. Sign Up here:
  6. 6. Venture Capital, Funding & Pitching Pieter Kemps Business Development & Venture Capital, APAC P_Kemps
  7. 7. Why do we talk about this? • Work with many startups & APAC’s leading VC’s • Discuss many startups with VC’s & get feedback on pitches • Not biased, no agenda, helping AWS startup customers succeed
  8. 8. Venture Capital Overview Impact of Cloud on Venture Capital What is a good pitch?
  9. 9. But first… Some questions for you
  10. 10. Venture Capital Overview Impact of Cloud on Venture Capital What is a good pitch?
  11. 11. Venture Capital Startups!
  12. 12. Venture Capital VC Fund General Partners, Principals, VP’s, Associates, etc. Startups with need for capital and growth potential Limited Partners institutional & high net worth individuals
  13. 13. 2-sided Platform model Startups with need for capital and growth potential Limited Partners institutional & high net worth individuals Capital & Value Creation connections, biz dev, GTM, mentoring, etc Risk & Return Reduce Risk & deliver Financial Returns
  14. 14. 2-sided Platform model “2 & 20” So how does a VC make money?
  15. 15. “2 and 20” Management Fee. VC raises a fund of e.g. $100M and gets $2M per year to operate the fund (staff, expenses, etc.) 2% Performance Fee. VC returns the profits from the fund to the LP’s but gets to keep 20% of these profits 20%
  16. 16. Venture Funding
  17. 17. Source:www.fundersandfounders.com
  18. 18. Source:www.fundersandfounders.com
  19. 19. 100% of nothing 17% of a Big Companyis a lot less than
  20. 20. August ‘08 Nathan Brian Joe January ’09 $20K Accelerator Y Combinator November ‘10 $7.2M Series A: Sequoia Greylock SV Angel & others July ’11 $112M Series B Andreessen Horowitz General Catalyst & others April ’09 $600K Seed Round Sequoia Youniversity
  21. 21. 01 04 idea MVP monetizescale Product Risk Market Risk Financial Risk 02 03 Product? Do we have a product? Can we ship? How to develop faster? Better? Cheaper? Market? Do people buy? Do they pay? Can we scale? Can we deal with spikes? Profit? Can we monetize? How to keep costs down? When can we break-even? Can we get & stay profitable?
  22. 22. 01 04 idea MVP monetizescale Product Risk Market Risk Financial Risk 02 03 Startup 2.0: “Lean Investor” Model • Incubator / Angel: $0-250K for ‘Product Viability’ • Seed: $250-$1M to ‘Expand Market Distribution’ • Venture: $1M-$5M to ‘Maximize Revenue’
  23. 23. 01 04 idea MVP monetizescale Seed RoundSeed Round Series A, B, C, etc.Series A, B, C, etc. Incubator / AngelIncubator / Angel Product Risk Market Risk Financial Risk 02 03 $0-250K $250-$1M $1M-$5M, or more
  24. 24. What caused the evolution towards the “Lean Investor”?
  25. 25. Venture Capital Overview Impact of Cloud on Venture Capital What is a good pitch?
  26. 26. Q & A Pieter Kemps Business Development & Venture Capital, APAC P_Kemps
  27. 27. Venture Capital Overview Impact of Cloud on Venture Capital What is a good pitch?
  28. 28. “Amazon Web Services is probably the most important thing that has happened to mobile and web app developers that the press just misses. Jeff Bezos has accidentally or maybe on purpose powered a whole generation of applications.” Steve Blank
  29. 29. “Amazon changed the VC industry. This is mind boggling. That online book company. Not … or anybody else. Amazon. 100% of the credit.” Mark Suster, serial entrepreneur and MD at GRP Partners
  30. 30. 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1995 – .com Technology Startups require physical hardware and proprietary software to build their business Typical Series ATypical Series A Spent on…Spent on… InnovationInnovation 5-10M •$2.5: marketing, sales, etc. •$2.5M on infrastructure •Not a lot, since experimentation was costly
  31. 31. Typical Series ATypical Series A Spent on…Spent on… InnovationInnovation 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2000: Rise of Open Source Open source software drove technology costs down by 90%, which spurred innovation in technology 3-5M •Less on Software– LAMP •More on development •Still on infrastructure •A lot more, as experimentation is less costly now
  32. 32. Typical Series ATypical Series A Spent on…Spent on… InnovationInnovation 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2005: Enter the Cloud Public Cloud pioneered by Amazon drove total operating costs down significantly 500K- 3M •Staff – the battle for talent •Customer Acquisition •Explosion in experimentation, innovation, and Startups
  33. 33. 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2007: Micro VC / Seed Public Cloud led to explosion in the number of Startups and the emerging of “micro VCs” AngelsAngels IncubatorsIncubators VC’sVC’s Angels unite in ‘Super Angels’ for Seed investments thru VC- like setup Boom in incubator programs, with micro investments, mentoring, etc. Venture funds that back early-stage startups with <$1M E.g. BANSEA, Angels Den, Angels Gate, etc E.g. TechStars, Ycombinator, JFDI, Kickstart Ventures, etc. E.g. Matrix Partners, A16H, 500startups
  34. 34. 28 startups in Asia 21 startups on AWS 71%
  35. 35. Why do VC’s care? More deals Shorter time to scale Faster time to revenue Lower ‘burn rate’ Higher valuation at exit
  36. 36. Venture Capital Overview Impact of Cloud on Venture Capital What is a good pitch?
  37. 37. Why is your pitch important? Because it shows you have a PLAN
  38. 38. What’s always there? Product Lots of product, product, product Rosy Forecast The infamous hockey stock
  39. 39. What’s always missing? Business Model not just WHAT, also HOW Metrics not just traction, also unit economics Strategy What will you DO? How will you GROW? Execution…
  40. 40. 1.Problem 2.Solution 3.Business Model 4.Business Model Metrics 5.Growth Strategy 6.Status / Traction 7.Team 8.Competition 9.Roadmap / Forecast 10.ASK 10 / 20 / 30 Rule Pitch Outline
  41. 41. 1. Problem Define the problem clearly Explain the impact. Why bother? What’s the opportunity? Market size? Problem Impact Market Chip design has gotten more complex, tools haven’t improved Product delays. Increased costs. Less collaboration US$5B market for Electronic Design Automation software
  42. 42. 2. Solution
  43. 43. 3. Business Model Business Model ≠ Pricing
  44. 44. Costs Structure Value Proposition Key Resources Key Activities Key Partners Channels CRM Customers Revenue Streams Capabilities you have How you use these Capabilities to make Money Change as little as possible HERE… …to maximize the impact HERE
  45. 45. 4. Business Model Metrics “I look for signs in a pitch that the founders understand the mechanics of the business.” Phil Morle, Pollenizer
  46. 46. 4. Business Model Metrics Acquisition  Install / Sign-up (by campaign / channel)  Conversion (by campaign / channel)  Customer Acquisition Costs (CAC) Activation:  Monthly Active Users (MAU)  Daily Active Users (DAU)  Usage (login times / length) Retention:  DAU/MAU  Day 1 / 7 / 30 retention  User lifetime
  47. 47. 4. Business Model Metrics Revenue:  Average revenue per User (ARPU)  Av. revenue per Paying User (ARPPU)  % paying user  % buying in-app  % whale vs dolphin vs minnow  Life Time Value (LTV) Refer:  K-factor = nr of invites sent per DAU x % acceptance/conversion rate
  48. 48. 4. Business Model Metrics Engagement • 30/10/1 rule*: 30% of registered is MAU, 10% is DAU, 1% is peak concurrent • This means DAU/MAU = 0.33 • DAU/MAU > 0.2 is good Profitability • 2 key metrics for subscription business models**: LTV >3x CAC Months to recover CAC *Source: https://avc.com/2011/07/301010/ **Source: http://www.forentrepreneurs.com/saas-metrics-2/ < 12 Months
  49. 49. ???? 4. Business Model Metrics
  50. 50. ???? 4. Business Model Metrics Avg Time on Site Avg Time on Site Average Basket Price Average Basket Price Advertising CTRAdvertising CTR
  51. 51. 4. Business Model Metrics Metric / KPI Now Comp A Comp B Comp C Goal Advertising CTR 1.5% 3% 6% 2.5% 5% Average time on site 4 9 6 5 10 Average Basket Price $18 $75 $118 $45 $73 Metric 4 Metric N
  52. 52. 5. Growth Strategy Metric / KPI Now Goal Growth Strategy & Actions 1. Advertising CTR 6% 8% 1. A/B test creatives 2. Continuously optimize campaign settings for CTR 3. Hire 1 marketing specialist 2. Website Conversion 5% 10% 1. A/B testing of landing pages 2. A/B testing signup flows 3. Run Marketing campaigns (marketing budget) 3. Conversion to Active Y% 70% 1. Automate email addition for known hosts 2. A/B testing of email account addition UX (UI and flow) 3. Hire UX/UI Designer 4. Conversion to Paid Z% 25% 1. Optimize the product package of Free and Paid 2. Make it easier to pay/transact 3. Develop the product to add new features to paid users 4. Deploy payment gateways & get PCI compliant 5. Hire 3 developers
  53. 53. 10. ASK Metric / KPI Now Goal Growth Strategy & Actions Costs 1. Advertising CTR 6% 8% 1. A/B test creatives 2. Continuously optimize campaign settings for CTR 3. Hire 1 marketing specialist 75K 2. Website Conversion 5% 10% 1. A/B testing of landing pages 2. A/B testing signup flows 3. Run Marketing campaigns (marketing budget) 150K 3. Conversion to Active Y% 70% 1. Automate email addition for known hosts 2. A/B testing of email account addition UX (UI and flow) 3. Hire UX/UI Designer 75K 4. Conversion to Paid Z% 25% 1. Optimize the product package of Free and Paid 2. Make it easier to pay/transact 3. Develop the product to add new features to paid users 4. Deploy payment gateways & get PCI compliant 5. Hire 3 developers 180K My ASK for funding = $480K
  54. 54. WHEN do you need to have WHAT ?
  55. 55. 01 02 03 04 idea MVP monetizescale Seed RoundSeed Round Series ASeries APitch for Angel Money Pitch for Seed Round Pitch for Series A Bootstrap / AngelBootstrap / Angel
  56. 56. Angel Pitch Show me a great idea! 1.Problem 2.Solution 3.Business Model 4.Business Model Metrics 5.Growth Strategy 6.Status / Traction 7.Team 8.Competition 9.Roadmap / Forecast 10.ASK
  57. 57. Seed Round Pitch Show me traction! 1.Problem 2.Solution 3.Business Model 4.Business Model Metrics 5.Growth Strategy 6.Status / Traction 7.Team 8.Competition 9.Roadmap / Forecast 10.ASK
  58. 58. Ash Fontana, Founder of AngelList
  59. 59. Series A Pitch Show me a business & show me returns! 1.Problem 2.Solution 3.Business Model 4.Business Model Metrics 5.Growth Strategy 6.Status / Traction 7.Team 8.Competition 9.Roadmap / Forecast 10.ASK
  60. 60. So before you pitch… Ask some important questions Where is my startup in its lifecycle? Do I understand my business model, metrics? Can I explain my growth strategy and justify my ask? Which TYPE of investor should I target?
  61. 61. So before you pitch… And do your homework… Decide what you look for in an investor Easy vs Hard, Dumb vs Smart Investigate who you want to ‘marry’ Which firm? Which Partner? Speak with people that know them Business partners (e.g. AWS), CEO’s in portfolio
  62. 62. Questions? Pieter Kemps Business Development & Venture Capital, APAC P_Kemps

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