Speaker: Henri de Bodinat, CEO, Time Equity Partners (France) Henri de Bodinat is president of TIME Equity Partners, a growth-capital fund focusing on equity investment in medium sized and high-growth potential companies from the Telecom, Internet, Media and Entertainement sectors. Previously, he co-founded now-legendary French media Actuel magazine and Radio Nova. In this midem Innovation Factory session, he advised startups on the basics of approaching the most relevant funds in music and entertainment to seek investment in your company. This includes: - how to best present your activity - the size of the market you reach - your growth potential - how you are going to use funds to get your targeted market shares and revenues... He also looked at governance, shareholder agreements and exit terms, which should also be considered crucial in the choice of your future venture capital partners or industrial partners!

1. How to raise money for a start-up
January 30 2012
Smart money for entrepreneurs

2. Choose the right investor ! Confidential
• Financing of pure projects: no or very little revenues : family &friends,
business angels
• Early stage venture : some revenues, but losses : venture capital (VC’s)
• Late stage venture : significant sales (>5m€) but still significant losses: US
style VC’s
• Early stage growth : significant sales (>5m€), high growth, proven business
model, break even or profit: small cap growth capital funds (e.g. TIME)
• Late stage growth : idem but sales >50m€ : mid cap growth capital funds
• Mid cap buy out : sales>50m€, cash generation small buy out funds
• Large buy out : sales> 500m€, low growth, high cas generation: big LBO’s
funds
2

3. Confidential
Who will win, who will lose in 2012 ?
• Business angels still active, specially former digital entrepreneurs
• Tax incentives funds (FCPI, ISF funds in France) still active
• Growth capital funds if specialized
• Corporate funds
• VC’s have to divest and will have difficulties raising money
• Buy out funds have to divest, difficulties to raise money, difficulties
to raise debt
3

4. Choose the right investor ! Confidential
• He understands your business, ideally he is an expert of your sector
• His exit horizon is compatible with your project
• He will be able to reinvest if needed
• He does not try to do is IRR at entry but at exit
• He wants you to be motivated and does not try to squeeze you as a
lemon
• You can either contact him directly or use an intermediary (small M&A
and fund raising boutiques)
• In the latter case, choose the right boutique!
4

5. Confidential
Music is digital; the digital space attracts investors!
• Since 1980, digital economy has contributed for above 20% of GDP growth in UK,
France and Germany while weighting less than 6% of GDP (COE Rexecode)
• Worldwide digital will further grow at a 14% CAGR between 2010 and 2015.
Mobile, SaaS and online video platforms will face particularly strong growth
World mobile digital revenues World SaaS revenues (U$ bn) World online video platforms
(U$bn) 2010-2015 2010-2015 (U$bn) 2010-2015
100,0 60,0 1,200
90,0 91,2 55,0 1,100 1,100
CAGR: +26% 53,6
CAGR: +29%
80,0
CAGR: +64% 50,0 1,000
70,0 45,0 0,900
42,4 0,852
60,0 40,0 0,800
55,5
50,0 35,0 0,700
33,5 0,659
40,0 30,0 0,600
33,8 26,5
30,0 25,0 0,500 0,510
20,0 20,5 20,0 21,0 0,400 0,395
10,0 12,5 16,6
7,6 15,0 0,300 0,306
0,0 10,0 0,200
2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015
Source: Business Insight, Forrester
• Constant disruptions create opportunities and a flurry of small/mid-sized
companies combining high growth and profitability
“Today, you always know whether you are on the Internet or on your PC's hard drive.
Tomorrow, you will not care and not even know.”
Bill Gates
5

6. Confidential
What to do to attract investors?
Be digital and if possible mobile or else..
High growth & demonstrated profitability potential
A sharp monetization and business model: Who will pay for what?
A differentiated and relevant offering : Which real need am I fulfilling?
How well am I fulfilling it? Are there barriers to entry or a first mover
advantage? Am I playing a positive role in my ecosystem?
A bottom-up, reasonable and well structured business plan: Do not
overpromise (avoid the infamous “hockey cross BP” except if you can
prove it)!
Clear exit potential with strategic acquirers
First class and motivated management team
Choose and consider the investor as a valuable strategic partner
6

7. Confidential
An example of high growth premium portfolio : TIME
• A premium portfolio built in 18 months:
o Fast growing companies outperforming their market,
o With leading position and clear technological edge,
o Already at a significant size and all profitable,
o Led by first class Management,
o Almost exclusively proprietary sourced,
o Benefiting from TIME expertise and value added
Million € CAGR CA 2009-2011e CA 2012e
Revenues
Adscale 60% + 30 +
Oodrive 30% + 20 +
Thema 70% + 20 +
• . MNG 100% + 15 +
CCM-Benchmark 90% + 30 +
7

8. Confidential
TIME business model
Specialization
in TIME sectors
Partners’ Relevant
Attractiveness for targets’
expertise and experience and realistic analysis
management
in TIME sectors diligences on targets
Sucessful closings
Proprietary deals
at reasonable valuations
Competitiveness in Efficient monitoring and
intermediated deals strategic partnering
Optimized exit High profitable growth
ROI
8