IntertradeIreland Venture Capital Conference

Transcription

1 IntertradeIreland 2018 Venture Capital Conference

2 Introduction Contents Chris Donnelly KPMG Corporate Finance Belfast Venture Capital Investment trends Venture Capital - Landscape on the island of Ireland Considerations for companies raising capital 2

3 Venture Capital Investment trends (KPMG venture pulse) In 2017 Global venture capital investment hit record annual high of $155bn (KPMG) Q4 17 also saw the highest quarterly value for VC invested in Europe-headquartered companies (KPMG) VC investment on the island of Ireland is also set to break 1bn for first time in 2017 (IVCA) Valuations also closed 2017 at a new all time high (KPMG) Tech/software is largest sector (40%+) with big gains in pharma, biotech and AI subsectors globally (KPMG) However deal volumes have declined globally (KPMG) VC investment increasing globally but indications more concentrated 3

4 Landscape on the island of Ireland Not complete list but illustrates the range of capital providers, both local and international Accelerator Seed Series A - B Late Stage Venture Debt Increasing number of capital options across all stages 4

5 Considerations for companies raising capital For businesses considering raising capital broad range of options No one shoe fits all approach However, there are a number of key areas that all businesses should consider. Will briefly touch on: Example feedback from pitches; Some considerations in addressing these areas 5

6 1. Team Example Feedback Didn t think the team is strong enough Founders / CEO Visionary can articulate Supporting Team Depth will depend on circumstances Understand the teams strengths and weaknesses Gaps short to medium term Understand the financials 6

7 2. Product / Solution Example Feedback Not sure what they actually do Products not defensible enough What is the problem? How does your product/solution solve the problem? What makes the product or solution unique? What is the revenue model? Do you have IP? Is it protected? Customer traction is vital to proving business model don t unnecessarily delay 7

8 3. Market opportunity Example Feedback Sector too competitive hard to win big Know where you fit in your market First mover advantage? Have you got a niche? Understand potential market size don t exaggerate Know who your competitors are? Locally and internationally 8

9 4. Scalable business model Example Feedback Believe it will be difficult to scale the business How are you going to scale the business? What are the key things you need to do this: Sales and marketing New People Customer relationships Product development Geographic presence May impact on determining the most appropriate investor 9

10 5. Appropriate funding solution Example Feedback Seeking too much money & didn t know what the money was for Seek the right type of funding to reflect where business is in its lifecycle Be very clear about what the money is for - where will this get the business to in the next months? 10

11 6. Valuation Example Feedback Unrealistic value expectations given where business currently is Equity dilution can be sensitive area Shouldn t be sold cheaply but important to be realistic If VC and the expertise is critical for capturing market opportunity and delivering growth plan - day 1 valuation should not be only consideration 11

12 Conclusions Healthy funding environment so good time to be raising capital Doesn t mean it s easy Good preparation is paramount! 12

13 kpmg.ie The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The KPMG name and logo are registered trademarks or trademarks of KPMG International.