Global Accelerator Meeting

DIGGING DEEP GLOBAL ACCELERATOR MEETING INTO INNOVATION A TALE ABOUT ACCELERATORS GAN H-FARM 31 MAY 2013 VENICE - Italy SECOND GLOBAL ACCELERATOR MEETING THE RELATIONSHIP BETWEEN ACCELERATORS AND INVESTORS AND ITS EVOLUTION THROUGH THE ACCELERATOR'S LIFE-CYCLE LET'S START WITH A FEW NUMBERS... 36 24 72 ACCELERATORS INVESTORS WORKGROUP SESSIONS WILD TEAMS 5 OBJECTIVES WIDEN A SHARE STIMULATE INNOVATION GLOBAL VISION EXPERIENCES INSPIRE NEW IDEAS EXPAND THE NETWORK 326 POST-IT NOTES He was the first Nordic Accelerator. PHASE ONE SET UP, DEAL FLOW AND SELECTION Lost funds What role can Investors The main role of Investors is to define a bridge play in the set up phase of Accelerators? between the needs and vision of Accelerators and their own. There are also varying types of Accelerators and there are a lot more Accelerators. They represent a brand new asset class. DIFFERENT TYPES OF ACCELERATORS The main key issues are alignment and local aspects: there are diverging incentives for Accelerators and THE ROLE Investors (local/global trade off). Accelerators should know and inform startups of the OF INVESTORS various local issues (such as tax-free zones, grants, incentives, policies, etc.) trying to maximize each Accelerator ecosystem and make startups use The role of Investors includes: those incentives. funding, validation / branding / referral, matching portfolio companies with accelerator companies, mentoring and advice, providing expertise, design process and term sheets, support in demo day design. KEY ISSUES IN THE How can RELATIONSHIP Investors be involved There are different views over when/how to involve investors but most of the accelerators in deal flow and tend to polarize on opposite ends. Either they set up a model with high degree of involvement, from program design and selection process? selection of the team early on (as this may help startups with preliminary feedback). On the other side, some accelerators expect a very low level of involvement from investors in setting up selection and curriculum. They key component, with solid consensus DEGREE OF INVOLVEMENT on both parties, is to grant investors visibility on the acceleration process and method. Deal sourcing is a two-way process. Accelerators highlighted 4 key areas where the presence of involvement of the investors is crucial: Symbiosis: Investors and Accelerators should filter the noise in the market. RELEVANT ASPECTS Education: sometimes Accelerators should educate Investors to follow startups at early seed stage. Critical mass / minimum viable ecosystem: when starting an Accelerator it is key to make sure that there is the right ecosystem around it. Emerging markets: bring in some well-known person to engage local Investors and catch attention. They made an Accelerator for ZUNE start-ups... THROUGH THE PROGRAM TO DEMO DAY PHASE TWO How should investors be There is substantial consensus over the need to engage Investors throughout the whole program. This is good if they want to be involved, either as mentors or in seminars and sessions to be held during the program. engaged during programs? Investors can help both Teams and Accelerators. ENGAGING INVESTORS When you engage Investors, it is good to involve them in the program from day-one. You should get Investors educated before Demo Day, as some Investors are "smart money" and they can get involved early. If they are former entrepreneurs, get them involved earlier is helpful for startups to talk to as many smart people as possible. BEWARE OF Mentoring can be defined as PROS AND CONS being very involved in company's issues, challenges, and development. It might be good to keep Investors and mentors onarate separate in order to avoid bad influence. However, some Investors can provide value as mentors: the deeper the knowledge in a given domain, the most Best practices in involving Investors around Demo-Day (pre / during/ post)? INVESTORS valuable the insights that they can provide. AS MENTORS? Be clear and let everyone know who is an Investor and who is a Mentor. When Accelerators try to get Investors Send a "thank you" e-mail to Investors and ask for feedback. Have founders stay to Demo Day must define a targeted positioning and provide Investors with info about the companies. in touch, share feedback on Investors so BEFORE DEMO DAY that due diligence can be done on them as much as on founders. Hold two parties after Demo Day: the first one just for Investors and founders to know each other, the second one for everyone. Hold Demo Day in a narrow, difficult-to-escape place (e.g. a boat). Get a power play big speaker to draw a big crowd, Get leading Investors to introduce teams on stage and to push other Investors to see a pitch. Have Investors pitch to founders (reverse pitch). in DURING DEMO DAY Have a break during the Demo Day. AFTER DEMO DAY Make value of good feedback for following Demo Days. Demo Day can be overrated: instead of focusing on that, get Investors involved earlier so that they are investing in KEEP a company with which they have a longer relationship. Provide coverage of startups for Investors, for example IN MIND by having an on-line platform where Investors can login and gain up-to-date info on the developments of Companies. They are searching for the innovators... FOLLOW-ON INVESTEMENT PHASE THREE & EXITS What role should Involve mentors with companies after acceleration. Make introductions between Investors and startups. Accelerators play in follow-on Create an Alumni network and hire someone to manage it. Include Alumni in activities (e.g. tours abroad etc.). rounds? NETWORKING Offer free additional support after Demo Day and help with negotiations and deal structure for later rounds. Build a sister organization that is more focused on support after acceleration, following Investors' activities. SUPPORT Accelerators struggle to adapt to the traditional VC business model, given the different cost How can structure and investment strategy. The timing of the exit Accelerators scrucial and different solutions to make the model sustainable during long holding period are being considered: exit at round A (not much appreciated from VCs); earn return & when should we exit? - corporate garage (r&d and consultancy for corp.); TIMING -private batches (e.g. verticals); - industrial approach (e.g. Betaworks). NEXT Most accelerators are working on a case-by-case basis on exits. CHALLENGES Typical holding period is 5 to 7 years: cash flow spikes to be covered! RETURNS Accelerators are rising from local geographies all over the world as a new asset investment class; the upcoming challenges lay in the . consolidation of the market, defining a standard "business practice": - define a common set of KPIS for Accelerators; - define a shared set of Business Models for Accelerators; - set up a repeatable model for international deals and partnerships. INTERNATIONAL DEALS KPIS BUSINESS MODELS THE MAGMATIC CORE OF INNOVATION SPECIAL THANKS TO (rigorously in a jumble): Hugh Mason (JFDI - Singapore), Eythor Jonsson (STARTUP REYKJAVIK - Iceland), Mauro Del Rio (B-VENTURES - Italy), Emily Sampson and Anna Bofill Bert (SOFTLAYER - Usa), Esther Loewy (BOOTCAMP VENTURES - Israel), Pedro Rochavieira (BETA-I - Portugal), Alexey Evlanov and Daria Burtilova (BRIGHT CAPITAL - Russia), Lenka Kucerova (STARTUP YARD - Czechoslavakia), Jon Bradford (TECHSTARS - England), Markus Scheuermann (DLD VENTURES - Germany), Zack Weisfeld (MICROSOFT ACCELERATOR - Israel), Hrish Lotlikar (EASTLABS - Ukraine), Andrea Di Camillo (P101 - Italy), Patrick Riley and Sarah Jane Coffey (GAN - Usa), Carlos Espinal (SEEDCAMP - England), Imre Hild (ICATAPULT - Hungary), Stefano Guidotti (U-START - Italy), Enoch Elwell (GIGTANK - Usa), Maurizio Rossi (H-FARM VENTURES - Italy), Jeannette Balleza-Collins and Nimeshh Patel (THE ARK CHALLENGE - Usa), Maxim Krasnykh (INTEL CAPITAL - Usa), Pam Lewis (VENTURE ASHEVILLE - Usa), Abdul Malik Al-Jaber and Rania Ghosheh Al Jaber (MENA APPS L.L.C. - Jordan), Peter Braun (MOUNTAIN CLUB - Switzerland), Anton Pushkin (TA VENTURE - Ukraine), Cristiano Escaplon (CLUB ITALIA INVESTIMENTI - Italy), Can Serter (SEED INVESTOR - Turkey), Paolo Barberis (NANA BIANCA - Italy), Luisa Maier and Andy Stone (STARTUP BOOTCAMP - Netherlands), Lamberto Mattioli (REDSEED - Italy), Simone Brunozzi (AMAZON WEB SERVICE - Usa), Andrey Morozov (INNOVEB - Russia), Dan Khan and Melissa Clark-Reynolds (LIGHTNING LAB / CREATIVE HQ - New Zeland), Carmen Bermejo (TETUAN VALLEY - Spain). A VERY IMPORTANT NOTE: The contents of this infographic are based on the Report edited by a team from the Ca' Foscari University of Venice, coordinated by Leonardo Buzzavo (Adj. Professor of Entrepreneurship and Strategy) who co-chaired the meeting with Timothy O'Connell (Partner - International Business, H-Farm Ventures). Team members Anna Morbiato and Riccardo Longobardi provided valuable support throughout the whole process (notes providedby Hugh Mason were very useful). Huge thanks to H-Farm Ventures, Chiara Andretta and YellowChip's guys for hospitality and meeting's GAN H-FARM organization. Infographic lovingly handcrafted by realthink - release. 3.0 (09-07-2013) Various icons from The Noun Project