Background on how the post-crunch world effects the behaviour of VCs with 3 areas that startups can look to improve their propositions. Given by Ed French of Enterprise Ventures at Northern Startup 2.0 in Manchester 28 January 2009

1. 3 ways to strengthen your pitch in a
“crunched” climate
Edward French, 27th January 2009

2. Contents
• The credit crunch in the VC world
• A picture of how VC’s see the world
• How the credit crunch effects deal selection
• How the credit crunch effects deals
• 3 ways to address the issues
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http://flickr.com/photos/jurvetson/338613504/

3. Enterprise Ventures
• Raised ~£40m in technology funds
– Preference for early-stage
– Preference for the North
– Ideally £100k-600k to start, £500k-£2m ultimately
• Approximately 40 deals to date
• Software, Medtech, Green, Web, Telecoms
• Only specialist team in the North
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4. The current environment
• US VC rounds carnage
US Venture Fundraising
• UK not so bad $12
$10
$8
• Main issue is managing uncertainty
$6
$4
$2
$0
Q4 2007 Q4 2008
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5. Someone
just raised
the bar!
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http://flickr.com/photos/thatpicturetakr/2461107564/

6. “Lines of equal return”
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7. How the world looks to VC’s
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8. Pre-Credit Crunch: VC’s objective
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9. Post-Credit Crunch: VC’s objective
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10. Pre-Credit Crunch
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11. Example business: before the crunch
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12. Effect on your proposition: sales
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13. Effect on your proposition: financing risk
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14. Add people
• Better people cost less for good companies
• Look for Non-Exec Directors with venture
experience
• It’s a great time to find people
– Listen to them
– Good VC’s will help you find them if they’re
interested
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http://flickr.com/photos/batmoo/61938659/

15. Effect on your proposition: financing risk
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16. Focus
• Cut as much stuff out of your offering
as possible- focus on the special bit
– You can add stuff back later
• Look for entry sectors and talk to
everyone in them
– Not 1% of a $1bn market
– Replace superlatives with data
• Get endorsement from people in that
sector
– preferably customers
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http://flickr.com/photos/ihtatho/627226315/

17. Effect on your proposition: financing risk
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18. Communicate effectively
• Keep your presentation simple and say what the service IS!
• Build the “autheticity”
– Use the data lavishly and the projections sparingly
– Be really frank about everything
• Get endorsement from people in that sector
– preferably customers
– Try asking for a small order for something
– Let the endorsements speak for you
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http://flickr.com/photos/brianscott/133789806/

19. Effect on your proposition: financing risk
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20. Summary
• It’s going to be harder than it was to raise capital
• Grow organically, Business Angels, Lottery, do a different business?
• Use great people to help you
• Focus
• Communicate well and authentically!
http://flickr.com/photos/ghost592/800142823/ 20

21. Contact Details
Edward French
Email Edward.french@enterprise-
ventures.co.uk
Phone 07966 347407
Yuuguu ID edwardmfrench@gmail.com
Website www.rsgf.co.uk
Blog techgain.net
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