9th International Venture Capital Forum a brief user’s guide Help-Forward Network Epaminondas Christophilopoulos, epaminondas@help-forward.gr

Presentation Outline Financing a venture – Success factors Sources of finance Venture Capitals The 9th International VC Forum The 8th International VC Forum - statistics Hints

Critical Success Factors A balanced team with track record IPR & an Exit strategy Proof of Concept & Competitor analysis Clearly defined market Defensible competitive advantage

Investment & Investors- is it Fundable? A good idea - New, different? Feasible - Dream or Vision? Commercially Viable - Will it make money? A winning team?

Investment & Investors – Finding your prince “Kiss the Frogs!”

Investment & Investors – Stage: Research & Development Type of Funding: Seed Capital & Grants Source of Funds: Family, Friends and Government, some Business Angels and VC’s

Investment & Investors – Stage: Start-up & Early stage Type of Funding: First Round & Second Rounds Source of Funds: Venture Capital, Business Angels, Corporate Investors

Investment & Investors – Stage: Development & Maturity Type of Funding: Expansion & Growth Source of Funds: Bank Loans, Factoring, Corporate Investors, Venture Capital, Company Pension Fund, IPO

Venture capitalists Characteristics Who are they? What do they seek? How do they operate? 22

VC: characteristics (part I) Objective is profit Professionally managed Usually other people’s money Minimum size generally Euro 1m Many higher: up to Euro 20m 23

VCs: characteristics (part II) Few focused on early stages Usually time driven - focused on exit Selective Go for large, global markets 24

What do VCs seek? Operating companies Return Control / information 29

VCs: operating companies Growth in rapidly growing markets Markets must be large and global Large = E1-2bn potential sales Markets should be relatively empty So tend to seek technology markets 30

VCs: return (I) Profit through sale or flotation Annual return on investment of 40 to 50% OR Euro 1m in and four years later Euro 4m out 31

VCs: return (II) In three years out of ten companies One will be a star Two will be OK Five will be unchanged Two will die 32

VCs: control / information Portfolio balance/focus Negative control Minority protection Information flow Control over exit If lead investor than proximity 33

How do VCs operate? Intake Due diligence The deal After the deal 34

VCs: intake An example (VC with 4 professionals) 1000 proposals a year - five a day Read 200 business plans (the rest are rejected from the first read) Visit 50 Investigate 10 Offer on 5 Invest in 2 (success rate 1-2%) 35

VCs: due diligence During three to six months Research market Research people Research claims/liabilities Study strategy Assess exit routes 36

VCs: after the deal Board representation Monthly or quarterly reporting Support varies by investor Hands off unless going badly Constantly looking for the exit 39

Investment & Investors- – The investment circle Insurance Companies Corporate Finance Pension Funds Venture Fund Liquidated Investment and Investors Shareholders Entrepreneur Stock Market or Trade Sale Venture Fund

The 9th International VC Forum (1) Register NOW to the largest international venture capital forum in Southeast Europe! The 9th International Venture Capital Forum is a unique two-day event dedicated to raising financing for ambitious and dynamic entrepreneurs, business oriented researchers and new technology-based firms in Southeast Europe. Businessmen, researchers, policy makers from Southeast Europe and East Mediterranean are invited to attend, present their business ideas and discuss venture opportunities in dedicated bilateral meetings. 39

The 9th International VC Forum (2) Place: Hilton Hotel, Athens Date: 19-20 June 2008 Venture capital firms are requested to present their availability and interest to explore the Event Portfolio by sending company's profile and contact details to info@vcforum.gr by 30th April 2008. Entrepreneurs and researchers are invited to submit their business plan the latest by 12 May 2008 info@vcforum.gr The "Best Business Plan Prize" will be awarded to three Business Plans selected by the VCs. 39

The 8th International VC Forum (1) Geographical Distributions of BPs Country (%) Greece 37 69% Turkey 8 15% Bulgaria 4 7% Cyprus Germany 1 2%   TOTAL 54 39

The 8th International VC Forum (2) Thematic Distribution SECTORS (%) IT 20 37% Consumer Products 15 28% Health & Safety 5 9% Telecommunications 3 6% Consulting / Services Electronics 2 4% Industrial Applications Energy Environment 1 2% Transport / logistics   TOTAL 54  100% 39

The 8th International VC Forum (3) Market Focus market   (%) Global 26 48% National 13 24% European 10 19% Local 5 9% TOTAL 54 39

The 7th International VC Forum (1) Geographical Distribution of BPs Country   (%) Greece 37 47% Israel 10 13% Turkey 6 8% Bulgaria 5 6% Romania Cyprus 4 5% Czech Republic 3 4% Poland 2 3% Slovenia Esthonia 1 1% USA Latvia Great Britain Hungary TOTAL 79 39

The 7th International VC Forum (2) Thematic Distribution Sectors   (%) IT 24 30% Consumer Products 9 11% Electronics 8 10% Telecommunications 7 9% Industrial Applications/ materials Health & Safety 6 8% Consulting Services Energy Environment 4 5% Transport 1 1% Aeronautics & Space TOTAL 79 39

The 7th International VC Forum (3) Market Focus market   (%) Global 37 47% National 20 25% SA Europe / Balkans 15 19% European 7 9% TOTAL 79 39

Hints -Present competition/risks together with opportunities Invest on preparing a realistic Business Plan -Present competition/risks together with opportunities -Clearly define markets -Present financial needs and 5 year investment plan - Describe clearly your competitive advantage - Executive Summary Present attractive earnings/cash flow (30-50% return for investment) Present realistic exit strategies 39

Additional info Help-Forward Network Epaminondas Christophilopoulos, epaminondas@help-forward.gr 9th International Venture Capital Forum http://www.vcforum.gr