Effectively Navigating Venture Capital

09:00 - 09:15    Course introduction

In this opening session the course directors, Martin Raditsch and Claus Schulte will outline what to expect from the days ahead and answer any queries you may have before starting out on three days of intense learning.

09:15 - 10:30    What is the venture capitalist for? The role of the VC within the finance structure

A venture capitalist (VC) is an investor interested in private equity investments to start-ups that manifest a high-growth ability in exchange for an equity stake. This could be funding start-up ventures or supporting small companies that wish to expand but do not have access and resources to equities markets.

VCs are prepared to take a risk by investing in such companies because there is a big probability to earn a massive return on their investments if invested companies reach success. However, VCs experience high rates of failure due to the uncertainty that is involved with new companies. Understanding this requirement give you the starting point to create a win-win situation.

Martin Raditsch

10:30 - 11:00    Break

11:00 - 12:00    Where is the money coming from?

The origins of the money spent by VCs, business angels, family offices, strategic investors and others is often opaque to new entrepreneurs. During this session we will discuss the different financial sources that find their way into start-up investments.

Financing Sources

• Private Equity

Become familiar with the terms of public investments and companies which are opened for public exchange as well as private equity, the opposite term and class, used for investors, funds, and companies that do not want to show up on the public market exchange. All capital raised via private equity can be utilised in different ways, for instance; financing new innovative technologies, increase working capital to boost a private company's operations and profit.

• Convertible Loan

A convertible loan term has been mentioned frequently in the investment procedure. We would like to provide a definition of it for clarity among our young entrepreneurs. When a student start-up obtains investment, an investor will provide a short-term convertible loan indicating maturity date, interest, and the right to convert a loan into an equity stake of this company in the long run. The main advantage for entrepreneurs is that a convertible loan, before being transformed into equity, has the same characteristics as a standard loan. But be aware of the main inconvenience: the investor has a priority right at maturity date to claim all kinds of assets from the start-up (tangible and intangible) to recover the loan and interest.

• Angel Investors

Angel investors are accredited people who look for start-ups, in order to invest in at an early stage with their own money and resources. Most countries have an angel investor network.

Inmaculada Valle.

12:00 - 13:00    Deal Flow

Deal flow is the estimated proportion of business proposals and investment pitches coming and are being received by investment bankers and venture capitalists.

Deal flow is composed of different types of proposals such as: venture funding, syndication, private placements, initial public offerings (IPO), mergers, and acquisitions. Typically, it follows a cyclical pattern and trends unfold throughout society and economic environments.

13:00 - 14:00    Lunch

14:00 - 15:00    How and when to approach VC

When is the right point in time to Threat Risk Asses (TRA) your scientific project into a company project. What are the needs and the requirements? In this session we will discuss the different possibilities of dilutive and non-dilutive financing.

Jan Adams

15:00 - 15:30    Break

15:30 - 16:00    Elevator Pitch

Elevator pitch is a term commonly used to describe a brief speech that summarises an idea for a product, service or project; it typically lasts for 1-3 mins.

An elevator pitch should include why your product, idea or project is worth investing in by explaining such things as your unique solution and differentiation points.

Venture capitalists use the elevator pitch to decide whether the project has profit potential and whether to continue the exchange with the entrepreneur or not.

Martin Raditsch and Jan Adams

16:00 - 17:00    Group exercise - Elevator pitch

In this group exercise, each group will be tasked to prepare a 3-minute pitch a panel of VCs.

Martin Raditsch, Claus Schulte, Inmaculada Valle  and Jan Adams

19:45 - 22:00    Networking dinner

09:00 - 09:45    Negotiations

Negotiations are an integral part of an entrepreneur’s journey. Be the objective to: obtain a license, agree on remuneration terms with CROs, or to secure the next investment round. Understanding the basic principles will help you to achieve better results and build your confidence.

Anja Zimmermann and Claus Schulte

09:45 - 11:15    Anatomy of a Term Sheet I

A term sheet is a (partly) non-binding agreement, which includes the basic terms and conditions under which an investment (or license) will be executed. Entrepreneurs might also find this document crucial for attracting additional investors.

The most common items addressed in the term sheet include company valuation, amount of investment, percentage stake, voting rights, liquidation preference, anti-dilutive provisions, warranties and more.

Claus Schulte

11:15 - 11:45    Break

11:45 - 12:45    Anatomy of a Term Sheet II

The trainer will continue unpacking all the requirements of the term sheet.

12:45 - 13:45    Lunch

13:45 - 14:30    Capitalisation Table

The capitalisation table, also called the “cap table” is a spreadsheet or table that shows the equity capitalisation for a company. Information provided in a capitalisation table is most utilised for start-ups and early-stage businesses, but there are no restrictions on all types of companies using capitalisation tables.
Anja Zimmermann

14:30 - 15:30    CAP table group exercise

Participants will work in groups; creating a Cap Table based on the case study of a seed financing round they have been given.

 Anja Zimmermann,  Martin Raditsch and Claus Schulte

15:30 - 16:00    Break

16:00 - 17:15    Group presentation

Participants will present their Cap Tables and discuss different possible outcomes.

17:15 - 17:30    Round up of day 2

What did we learn today?

09:00 - 10:00    Dilution and its consequences

Dilution is the devaluation of shareholders’ equity due to the creation of new shares. We know that a share of stock represents equity ownership in a company. The consequence of dilution is intricate and often misunderstood by new entrepreneurs. This session will provide you with some in-depth insights into dilution events.

Martin Raditsch

10:00 - 11:00    Valuation methods

Determining the fair market value of a start-up or even a technology project can be a complex task. There are many factors to consider, but it is an important skill for KTOs and VCs to possess.

How do finance professionals evaluate assets to identify the pre-monetary value? Are there factors, other than objective financial figures, which Influence the evaluation?

In this session we will provide you with a mix of hard and soft factors, which will define the value of such a project. Further insight will be discussed in the panel discussion.

Martin Raditsch

11:00 - 11:30    Break

11:30 - 12:30    Panel discussion: Valuation

There are several methods to evaluate the current and the future value of your enterprise. In this session we will introduce some commonly used methods.

12:30 - 12:45    Course wrap-up

12:45 - 13:45    Lunch and farewell