The document discusses starting a venture capital (VC) backed company and provides advice from Michael Altendorf on this process. It introduces ADTELLIGENCE, a German tech company founded by Altendorf and others with a team of experts from companies like SAP, Google, and IBM. Their technology creates the basis for successful business models in areas like web 2.0 and mobile platforms. The document then provides tips on developing the idea, building a team, creating a business plan, finding investors, developing the product and market strategy, and other key steps to starting a VC backed company.

1. The Art of the Start Starting a VC backed company Michael Altendorf University of Mannheim/ Chair of Entrepreneurship 30.3.2011

3. Founded by Michael Altendorf and Dr. Cyrille Waguet (SAP’s chief software architect of BI unit), together with venture capitalists

4. Team consists of experts that formerly held key positions at SAP, Google, and IBM

5. With its technology, ADTELLIGENCE creates the basis for successful business models in Web 2.0 & mobile platforms, increasing the competitiveness of social media services over traditional media

6. ADTELLIGENCE got awarded at the Intel Technology Entrepreneurship Challenge 2010 (IBTEC) in Berkeley About us

7. Next Generation Social Web Technology Data DrivenAdvertising Dynamic Personalization of eCommerce Shops, Targeting based on user profile data like Facebook Connect and Social Analytics for a closedloop marketing process Der Nutzer wird immer wieder in den Kaufprozess zurückgeleitet. Absprungraten werden so minimiert.

8. Some Highlights www.adtelligence.de for more info BUSINESS INTELLIGENCE SELF-BOOKINGPLATFORM ANALYTICS2.0 GEOTARGETING DEMOGRAPHICTARGETING AD SERVING2.0

9. HOW TO START A VENTURE ?

10. THE IDEA COMES FIRST

12. Am I good enough to be an Entrepreneur?

13. Where do I get the money for my Company from?

14. Who gives me the Money?

15. How do I get to know such people?

16. Why do the rich people do this?

17. What do I have to do?

18. What kind of questions do the Investors ask?

19. How much Money do they give to me (& how much do they want from me?)

20. When do I get the Contract and the Money?

21. What happens then?How to start? Iterate, iterate, iterate… Source: Computer History Museum

22. From Idea to concept No… …Better… …Maybe… …Yes

23. From first idea to first version of a product – sometimes it takes only some days – Sales Funnel Analysis Tool

24. THE TEAM

26. Experience is something but not much

28. Minimum 2 people for the start, 3-4 are betterThe Team Source: A-Team

30. Your Qualification: 1,0 in Informatics + 1,0 MBA + 2 own (sold) companies + 5 years work experience would be “good”

31. BA in XYZ + an internship at McKinsey is not enough to get VC

33. Identify markets

34. Calculate Costs and Revenues

35. Develop a Prototype

36. Talk to experts

37. …The CV problem

38. THE (BUSINESS) PLAN

40. No, salary of more than 50.000€ per Year is not ok for the start when your just graduated

41. No, with 3 People you won't reach 5% Market share - please calculate bottom-up

42. No, you don't have to mention Gartner and IDC, but 1 Big Player would be good

43. No, you can't do it without a business plan (…but with a product which has 10.000 users +)

44. No, it should not be longer than 10-25 Pages (10/ 20/30 rule) – no McKinsey 80 page plan with 40 page competitive feature analysis – you can do the longer analysis for you but not for the VC – VC’s do not have time to read more than 10 pages

45. As short as possible, not longer than necessary

46. The core problem is to write a short plan, not long one!Some FAQ for the (Business) Plan

47. THE VENTURE CAPITAL

49. Family, Friends & Fools

50. Business Angel

51. Bank

53. Venture Capitalists most times didn't had an own company with problems you will get

54. Prefer Business Angel with Experience and a lot of spare timeWhere do I get the Money for my Company

55. Prefer an experienced Business Angel with "proven track record", a good network, and Experience in the right Segment Who gives me the Money? Source: John Doerr/Ted.com Source: Forbes Magazine Source: Ron Conway/Techcrunch

58. Heidelberger Innovationsforum or other local events

59. Contacts (Lawyer, Tax Accountant)

60. BAND/BA Networks

61. Karlsruhe

62. Frankfurt

63. Heilbronn

64. Stuttgart

65. Mentor or Public Consultant

66. Do not pay, if it is not necessary the best advice you will get for free!How do you meet those people?

67. How much should I raise? (…or how much do you get!)

68. Ideal Way of increasingvalue – Facebook (at least till 2011) Source: Techcrunch.com

69. THEBUSINESS MODEL

70. Define a Business Model, test it and iterate, iterate, iterate… 2 Offering 1 3 3 Customer Infrastructure Customer Relationship Core Competencies Customer Segments Partner Network Value Proposition Distribution Model Value Configuration Costs Revenue Model 4 Finance Source: A. Osterwalder Business Model Design Template

71. THE PRODUCT

73. What needs to you address?

74. What are the key USP‘s for your target customer?

75. Why are you better?

76. Is there a market?

77. If there is no competition there is no market! That is not an USP – nobody will buy it!Source: Forbes Magazine

78. THE MARKET

79. 5 Forces (Porter) Potential Entrants Threat of new Entrants Suppliers Buyers Industry Competitors Rivaly among existingfirms Bargaining Power of Suppliers Bargaining Power of Buyers Threat of Substitute Products or Service Substitutes

80. The Competition

81. The Gartner Hype Cycle – Define the right time to market

82. New Markets are different Source: Steve Blank

83. GO TO MARKET STRATEGY

84. How to find the first Customer Customer Validation Customer Discovery Search Pivot

85. Crossing the Chasm in an existing market Source: Steve Blank

86. Crossing the Chasm in a New market takes much longer Source: Steve Blank

88. Define the pricing

89. Week 2: define a new target customer

90. Define a better package and better pricing

91. Week 3: …

93. DISTRIBUTION THE SALES MODEL

94. Define a Sales Process and potential customer market and positioning in the value chain Source: Slideshare

96. The new Tools are used to make all kinds of Advertising:PR News, Blogs or Twitter

97. An interesting and interactive way of Advertising is the viral marketing (Word of Mouth Marketing)

98. The Problem of these creative Advertising:

99. You can't predict the effect

100. Viral Campaigns are unique - you can't replicate them WEB 2.0 TOOLBOX Viral Marketing Early Adopter Marketing Buzz & Guerilla Marketing Blogging & Twittering Brand Page Facebook Fan Pages Online Events / Webinar Youtube Video PR Company Radio & TV

101. FINANCE AND REVENUES

102. Raise 50% more money than you need in the beginning Example: HTGF gives 500K for 15% (+one time anti dillusion) as they know that you will need it Raising VC & Sales – Money is Oxygen

104. This can become your core problem!

105. If you have contracts, the bank can be used for this but not unlimitedWorking Capital

106. An important "period" Break Even (HGB vs IAS vs US GAAP) …cash flow break even is important

107. HUMAN RESSOURCES

109. Motivation is more important than previous internships etc.

110. Grades make no good great sales guyBuilding a great Team

112. Very important to find 5 key people in the company

113. In the beginning you need 2: one to sell, one to build

114. Later you need: CEO, VP Sales, COO, CFO, CTO/visionaryThe SMT – Building a Senior Management Team

115. GROWTH CAPTIAL

117. Bottom Up

118. Top Down

119. From where to you get the Numbers?

120. Gartner & Co

121. Calculate 3 Scenarios (+/+/=) (if you have a negative scenarios – how to innovate the business mode to still make money?

122. How do I have to calculate to get VC? Finance Planning and Venture Capital

123. Who are the Key Players to get VC? E.g. in the valley Check it out: http://linksviewer.com/free/view/Map.htm

124. Try to reach Network Effects Year 1 Year 2 Year 3

126. Go into verticals

127. Expand into other countries

128. Start partnershipsProblem: Which way is right? Try everything but stop fast if ist not working

129. EXIT SCENARIOS

131. IPO – not necessary, you can use private equity first

132. As an expert first before you sell (M&A advisors in London, NY , silicon valley)

133. Stay with your company?

134. Merger with competitor

135. …Exit Scenarios

136. FAQ'S

138. Go to market and productization - Steve Blank – 4 steps to epiphany

140. How much should I raise?

142. "Finding the Rock": Investors asking question Founders are answering

143. Months of Contract Negotiations

144. Meeting with Notary (Founding GmbH)

145. Open an Account

146. Don't wait for the certificate of registration, start immediately

147. Then the Money comes Source: Wooga

149. Go to IKEA or buy on eBay

150. Get a Phone

151. Write Job Ads

152. Hire People - Is the Team complete?

153. No, you can't order a Porsche, a Macbook or an iPhone

154. Long Term Investments  You can‘t go to the Customer with a ALDI Notebook?Source: Blog

156. Never Stop Learning, iterate!

157. Writing and Optimizing the Business Plan

158. Get a "Level of Trust" - Visit Events and enlarge your network

159. Investors are paying for the growth of the Company, not for luxury like concord flights – don’t worry you will be invited to cool locations and events all the time all over the world!

161. Q&A