Butterfly ventures early stage investment philosophy - 18.6.2013
- 2. Juho?Risku ? Involved?with?the?web?mid?©\90¡¯s,?since? then?at?the?very?front?of?networked? technology?and?business?innovation ? Serial?entrepreneur,?founder?in?four? companies,?involved?in?hundreds?of? projects,?gathered?millions?of?venture? financing?and?helped?numerous? startup?entrepreneurs ? Outside?of?work:?Big?mountain? freeriding,?ice?climbing?and? mountaineering?,?friend?of?good? literature?food?and?wine Email:?juho@butterfly.vc LinkedIn:?http://fi.likedin.com/in/jrisku? About.me:?http://about.me/juho.risku Juho?Risku ? Involved?with?the?web?mid?©\90¡¯s,?since? then?at?the?very?front?of?networked? technology?and?business?innovation ? Serial?entrepreneur,?founder?in?four? companies,?involved?in?hundreds?of? projects,?gathered?millions?of?venture? financing?and?helped?numerous? startup?entrepreneurs ? Outside?of?work:?Big?mountain? freeriding,?ice?climbing?and? mountaineering?,?friend?of?good? literature?food?and?wine Email:?juho@butterfly.vc LinkedIn:?http://fi.likedin.com/in/jrisku? About.me:?http://about.me/juho.risku
- 4. Board of Directors Jukka M?kinen Chairman of the Board Jari Pasanen Member of the Board The?Team Partners Matti Kanninen managing partner Juho Risku partner, co-founder Antti Kosunen partner, co-founder, and Board member
- 5. Northern?Startup?Fund ? Located?in?Oulu,?Finland ? Investors ¨C 5M?from?City?of?Oulu,?First?closing?done ¨C 5M?from?private?investors ? Asymmetric,?private?investors?have?the? preference ¨C Will?get?their?invested?capital?back?first ¨C Will?get?their?share?of?the?returns?first
- 6. Idea 15©\90?k€ 200©\400?k€ 1©\2?M€ xx?M€ Unqualified Qualified?pre©\seed/seed Qualified?expansion Accelerating StartUp Financing Financed?¨C Exit Go?fast?forward? or?fail?fast ScoutingScouting Basics Preparation Proof?of? concept Scope?of?main?interest OperationalizationOperationalization Scale©\up ¦²?<?500?k€ ¦²?<?2.5?M€ Fast?forward,?fail?fast First?time? Investment Follow?up? Investment Follow?up? Investment Follow Exit
- 7. THE?RIGHT KIND OF?STARTUP What we¡¯re looking for?and?why
- 8. Trajectory?of?business 0 10 20 30 40 50 60 0 6 12 18 24 30 36 42 48 Positive?black?swan Scope?of?realistic?trajectory Market?potential &?scalability
- 10. Fragile,?robust?and?antifragile 0 10 20 30 40 50 60 0 6 12 18 24 30 36 42 48 Pivot?forced?by?market Fragile?trajectory Antifragile trajectory Robust?trajectory
- 13. THE?INVESTMENT PROCESS When to?start and?how it happens
- 14. Decission?making Process ? Quick?look ¨C ~25%?into?prospect?=?examined? in?more?detail ? Case?selection ¨C Heuristic?analysis?and?scoring ¨C Priorization:?Each?week,?focus? on?top?3 ? Deal?scoping ¨C Business?model?and?cash?flow? analysis ¨C Deal?proposal ? Agreement?and?approval Scoring?criteria ? Market?/?market?potential ? Founder?team ? Product?and?business?model ? Long?term?competitive? advantage?/?protection?fo? market?position ? Current?situation ? Exit?potential ? Financing?requirements?now? and?in?future
- 18. Valuation?and?time 0 500 1000 1500 2000 2500 3000 3500 4000 4500 ©\12 ©\6 0 6 12 18 24 Pre©\seed Seed Crash point
- 20. NWG?Tools?(pre©\seed) ? Value?proposition:?200%?profit?increase?for?tiling? contractors?©\ verified?by?proto ? Invested?because ¨C Clear?and?simple?value?proposition ¨C Great?neatly?protectable?and?enforceable?IPR ¨C Team?with?strong?industry?experience??+?commitment ¨C Lean?operation?mode ? Invested?for ¨C First?commercial?product?version ¨C Customer?value?proposition?validation ¨C Reference?customer?acquisition
- 21. MyPose?(seed) ? Value?proposition:?Significant?revenue?stream?for?clothing? retailers?and?cost?effective?social?media?marketing?¨C investment?paid?back?in?3©\10?months ? Invested?because ¨C Industry?dynamics?changing?value?proposition ¨C Clever?business?model?with?billion?dollar?market?opportunity? and?naturally?viral?product ¨C Capable?committed?team ¨C First?product?version?tested by?several?customers?(Marimekko,? Calvin?Klein,?One?Piece) ? Invested?for ¨C Business?model?finalization?and?value?proposition?validation ¨C Acquisition?of?reference?customers
- 22. FilmMe (seed) ? Value?proposition:?Easy?and?cost?effective?filming?of?your?self?in? action?without?having?someone?else?operating?the?camera ? Invested?because ¨C Clear?value?proposition?for?different?actors ¨C Attractive?business?model?with?billion?dollar?market?opportunity?and? naturally?viral?product ¨C Demonstrated?market?traction?with?180k€ worth?of?pre©\agreements ¨C Committed?balanced?team?with?marketing?and?technological?skill ? Invested?for ¨C Business?model?validation ¨C Establishing?the?required?metrics?for?follow?on?round