Presentation on startup fundraising by Herman Kienhuis at Antler Amsterdam

1. Startup Fundraising
Antler Amsterdam
Herman Kienhuis, July 5 2019

2. Agenda
• Introduction
• Why raise capital
• How startup funding works
• Which sources of capital
• What investors look at
• Where to find investors
• Q&A

3. Introduction

4. Personal Introduction
• Managing Director KPN Ventures
• Founder/partner River Venture Partners
• MSc Chemical Engineering and MBA (INSEAD)
• 5 years Finance & Strategy (McKinsey)
• 8 years in Consumer Internet (Sanoma Digital)
• 7 years in Venture Capital
• Married, father of three teenagers
• Loves live music, movies, vintage design and
slow food
• Supporting sustainable development, education,
research journalism and diversity

5. startup investments
KPN Ventures
EXIT
EXIT
INNOVATION FUND
River Venture PartnersSanomaVenturesEXIT
STOP
STOP
STOP
STOPSTOP
EXIT
EXIT
EXIT
EXIT

6. Who are you?

7. Why raise capital?

8. Why raise capital?
• Starting up cost
• Financing early-stage losses
• Working capital investments
• Creating cash liquidity buffer
• R&D investments
• Production/inventory investments
• Customer acquisition investments
• International expansion
• Accelerating growth

9. How startup funding works

10. How startup funding works
Idea-stage ...more
rounds…
You
0
100% of 0
FFF stage
€50-100k
Family
€140k
28% of €500k
Seed round
€100k-€1m
Angel
investor
€500k
22% of €2.3m
Series A
round
€1-€10m
VC
investor
Employee
option pool
€2.5m
13% of €20m
Series B
round
€10-20m
2nd VC
investor
€5m
10% of €50m
IPO
€50m+
Public
investors
€50m
9% of €575m
Co-founder
stage
<€50k
Co-founder
Co-
founder
€50k
33% of €150k
Your
stake’s
value

11. Which sources of capital?

12. supplier credit
bank loans
strategic (corporate)
investors
venture capital
angel
investors
Sources of startup and scale-up fundingcapitalneed(€mln)
100
50
10
5
1
0.5
0.1
high risk low risk
stock exchange
(public equity)
private equity
start
development phase
friends & family
Pre-seed
(preparation)
Seed
(mvp)
Early-stage
(start-up)
Later-stage
(consolidation)
Growth-stage
(scale-up)
Maturity
(ICO’s)
innovation
loans
crowdfunding
subsidies

13. •family & friends: quickstart, trust-based
•crowdfunding: b2c, creative projects, pre-sales, creating ambassadors,
market validation
•supplier credit: quickwin, co-creation with partner
•seed/innovation loans: government-provided or government-
guaranteed subordinated loans for startups
•innovation subsidies: EU or Dutch government grants for specific
R&D projects or market research activities
•informal investors: cash, network, personal involvement
•strategic investor: cash, customers, expertise, network (and potential
exit)
•venture capital: cash, industry network, scaling experience
•bank loan: cash (at lower cost), personal guarantees

14. What investors look at

15. • drive & dedication
• diversity &
complementary
• execution mindset
• expertise & track-record
• partners & advisors
1. Team

16. • solving a real problem
• sustainable competitive
advantage
• revenue & business
model
• operational flywheel
2. Product / Proposition

17. • customer metrics:
conversion, retention,
growth
• customer feedback
• willingness to pay
• CAC vs CLV
3. Traction

18. • total market size & growth
• addressable market
segment(s)
• international scalability
• profit margins
4. Potential

19. • ‘Uses of funds’
• product development
roadmap
• go-to-market plan
(customer acquisition)
• hiring plan
• financial plan, with
cashflow prognosis
5. Plan

20. • realistic valuation
• staged funding
• protective rights
• governance & control
rights
• information rights
• investor value add
6. Terms

21. • Lack of ambition
• Founders not dedicated
• Not enough skin in the game, too much
founder dilution
• Not open to feedback
• Tech solution looking for a problem
• ‘We have no competition’
• Bad unit economics
• Not sharing all information
• Inconsistent financial model
• Too much money raised too early
• Messed up captable
• Non-standard terms
Red Flags

22. Finding Investors

23. Where to find investors
• Your network: Linkedin, university, former colleagues, other entrepreneurs
• Startup events: tech conferences, startup challenges, pitch events, demo days, investor
speeddates
• Startup support services: StartupDelta, university entrepreneurship support, regional
economic development organizations, chamber of commerce, financing & subsidy advisors
• Industry associations: Nederlandse Vereniging van Participatiemaatschappijen (NVP),
Business Angel Netwerken NL, Dutch Startup Association
• Online directories: nlfunding.co, Crunchbase, Dealroom.co, Index.co,
• Online marketplaces: Angellist, FundsUp, Glassdollar, Angel Investment Network
• Crowdfunding platforms: Symbid, Leapfunder, Oneplanetcrowd, Seedrs

24. Dutch Venture Capital funds
(source: Peak Capital)

25. When/how to approach investors
Research investors
• Right scope, right stage, right ticket size?
• Similar investments?
• What can they bring?
• Which partner do you want on your board?
MAKE
LONGLIST
WITH
RELEVANT
INVESTORS
START WITH
SECOND TIER
AS TRY-OUT
Reach out
• Preferably through personal intro
• Send clear teaser deck with ask
(feedback, network connections, meeting to explain/demo)
• Propose 30 min. video call or to meet at event/office hours
• gentle reminder mail/call

26. The VC perspective
• Dealflow: assessing 500+ startup to close 5 investments
• Thesis-driven: targeting investments in emerging/hot spaces, with specific
characteristics
• Founder focus: entrepreneurs should drive growth and have sufficient skin in the
game
• Unicorn focus: each investment should have €1b exit potential to generate fund
return, compensating for failed investments
• Risk averse: taking time to get more information/validation; external urgency
needed (e.g. FOMO)
• Syndication: investing alongside existing and other new investors for additional
validation, value-add and shared risk
• Horizon: all companies should be exited when fund ends 8-10 years after start

27. Wrapping up

28. Best practices
1. Find personal intro’s to investors through your network or via other investors
2. Research investors: point out why the approached investor is a good match
3. Build up relationships with investors early; e.g. send regular updates, meet-up at events, also when
you’re not fundraising
4. Use a CRM/sales tool for your fundraising process
5. Get at the table: use simple decks and quick demo’s to get at the table and make the personal
connection; in the end investors invest in you
6. Maintain data room: keep an up to data room from the start of your company, always ready to be
opened for interested investors
7. Prepare terms: Prepare a VC-type term sheet yourself to reduce workload for investors (and gain
some control over the terms J)
8. Create urgency: use planning and FOMO to create external urgency for investors
9. Do Investor Due Diligence: ask investors for founder references, also of failed cases
10. Stack funding: combine different sources of money, for validation, less dilution, more value add:
angels + crowdfunding + VC’s + grants + innovation loan + venture debt

29. Q&A
herman@rivervp.com | angel.co/kienhuis