Prezentacija Darka Butine iz Netcetere.

1. How to sell your company?
What are we looking for in start-ups we invest in?
Darko Butina, February 22, 2016

2. Netcetera | 2
About Netcetera
• 20 years in the making – first online pizza order in Switzerland in January 1996
• One of top SW companies in Switzerland
• Netcetera Group:
• Netcetera – custom SW development (350+ employees)
• D1 Solutions – business intelligence
• Braingroup – SW for financial advisors
• Switzerland, Liechtenstein, Macedonia, United Arab Emirates, Germany
• Our industries:
• Fintech
• Connected health
• Transit tech
• Digital enterprise
• Media and entertainment
• Law enforcement

3. Netcetera | 3
About Darko Butina
• Lead several companies from different industries (from systems integration, web
media and marketing research to e-commerce, management consulting, production
and utilities)
• Companies from 0 EUR revenues to almost 500.000.000 EUR revenues
• From start-ups (Adeptio, SASH reporting) to corporates (Elektro energija, Trimo,
NIL Data communications, Najdi.si)
• Lead biggest Slovenian e-commerce player Mimovrste through turn around, its first
investment round (several million EUR) and through sale to leading e-commerce
group (Netretail Holding, at the time part of Naspers)
• Active angel investor (Serbia, Switzerland, Slovenia)
• Chief Investment Officer, Netcetera

4. Netcetera | 4
What are we looking for in start-ups we invest in?
• Team – known and fully dedicated
• World-class idea and global ambition
• MVP – preferably with first paying customers
• Geography – as in where the team operates from (Serbia, Slovenia, Croatia,
Macedonia, Switzerland, Germany)
• Industry – anything built on SW/web technologies (we can help most in industries
we are already in, but we are not limited by these industries)
• Biz plan with financials needs to be properly prepared
• Biz plan – can be in business model canvas form – accompanied by planned
activities and milestones
• Financials – P&L and balance sheet – accompanied by listed assumptions

5. Netcetera | 5
What can start-ups expect from us?
• Active investor – we will not do your work, but we will be active and provide helping
hand wherever possible (also taking role of lead investor)
• We are not pure financial investor – and we do not want to be
• Significant and proven managerial, entrepreneurial and technical expertise
• Understanding and know-how:
• We are and have been entrepreneurs and managers
• We have successfully raised funds
• We have experienced failure
• We have built, turned around and successfully sold companies
• We invest up to 200k EUR on our own – we also have (and are expanding) network
of partners with which we can invest also more

6. Netcetera | 6
How to sell your company?
• What do the following have in common?
• Company business
• Business success
• Attracting investment in company
• Selling company

7. Netcetera | 7
How to sell your company?
• What do the following have in common?
• Company business
• Business success
• Attracting investment in company
• Selling company
FINANCES!

8. Netcetera | 8
Key indicators
• EBITDA – put really simplified, it shows what kind of potential free cash-flow the
company can generate
• Revenues – growth
• Profit – profitability over time
• Liquidity and cash-flow – are you able to regularly pay your dues at specific point
in time (liquidity) and over specific time period (cash-flow)
• Net debt – short and long-term debt minus cash and other very liquid assets

9. Netcetera | 9
Non-financial key indicators
• Number of customers – growth
• Churn rate – % of customers leaving the company in certain period
• Average order value
• Number of visits
• Number of visitors
• Conversion rate
and lots of others…

10. Netcetera | 10
Before looking for buyer
• Growth – “If the company is not growing, it is dying.”
• Clearly defined (and written) plans for the future
• Profitable business
• Properly managed business (in our region only 30% of all already closed deals get
through DD…):
• All contracts are signed
• Properly prepared financial accounts
• Regular fulfilment of company’s obligations (paying all your debts when due)
• Regular collection of claims
• All legal obligations fulfilled

11. Netcetera | 11
Phases of acquiring buyer (or investor)
1. Decision of owners (founders and investors)
2. Selecting consultants
3. Define what kind of buyer (or investor) the company wants
4. Preparation of investment materials
5. Contacting potential buyers (or investors)
6. Negotiation
7. Term sheet
8. Due diligence (DD)
9. Agreements
10.Sale of the company / investment received

12. Netcetera | 12
What kind of valuation can you expect?
1. Start-ups in the region often dream of too high valuations – based also on real data
from markets Netcetera is active in as investor
2. Valuations of US start-ups in media are exception, not the rule
3. The most simple formula for valuation of a company is EBITDA times certain
multiple minus net debt
4. Multiples for mature companies are in general between 5 and 10 (depending on the
industry etc.) – higher multiples are almost everywhere an exception and not the
rule
5. Again, valuations of US start-ups in media are exception, not the rule
6. Growth and in certain case also market share influence valuation the most besides
EBITDA
7. Any kind of higher risk for the buyer (or investor) will lower valuation – loss, too
high liabilities, restricted warranties and reservations, casual management of
business etc.

13. Netcetera | 13
QUESTIONS?
e: darko.butina@netcetera.com
t: @TheDare
l: http://si.linkedin.com/in/darkobutina/