Entrepreneurship WorkshopYerevan, ArmeniaValto Loikkanen

Grow VC Group ++ www.growvc.com ++

@growvc ++

Copyrights © Grow VC Group 2015

About me

My Evolution As an Entrepreneur

● Entrepreneur● International entrepreneur● International serial entrepreneur● International portfolio entrepreneur

As an Entrepreneur● 20 years as international Serial Entrepreneur (US, EU, Asia) &

Portfolio Entrepreneur, with personal hard earned success & failures

● 17 years experience in developing web based tools for various business processes

● 6 Years of developing equity crowdfunding and other digital investment market solutions globally

● 5 years for Startup Ecosystem development combined with online support tools, platforms & metrics

● For two years, being part of three EC Horizon 2020 Groups:○ Access to Risk Finance, ○ Spreading Excellence & Widening participation ○ International Cooperation

As a Business Advisor● 10 years of startup mentoring

○ with 2000+ one to one mentoring sessions and workshops○ with 1000+ entrepreneurs and hundreds of startups around the

world at various development stages and industries

● In parallel 10 years developing Startup Support services, with entrepreneurial mind and lean methodology (fast ideation, implement and measure cycle)

● 5 years of “living lab” development for Startup Ecosystem in Finland with City of Helsinki

About Grow VC Group"The global pioneer of securities crowdfunding, peer to peer marketplaces and new investment models."

Grow Advisors provide consulting and knowledge resources for Digital Investing Marketplace and Startup Ecosystem development

Ecosystem Back-end infrastructure and Support to manage, measure & peer benchmark Startup ecosystems

Deal Index offers Visibility to Professional & International Investors and real time investment Market Data

Digital Investment Marketplace Back-end solutions and Development

Other Grow VC Group Companies & Services For Economic Development

Local Investors & Equity Crowdfunding

International Growth

$$$

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Local Startup Ecosystem

International Investors & Multinational Corporations

Talent, Startups &Support Services

Grow Advisors provide consulting and knowledge resources for Digital Investing Marketplace and Startup Ecosystem development.

Ecosystem Back-end infrastructure and Support to manage, measure & peer benchmark your ecosystem.

Deal Index offers Visibility to Professional & International Investors and real time investment Market Data.

Digital Investment Marketplace Back-end solutions and Development

$$$ $$ $$

Talent & InvestmentsGrowing Startups

$$$

The leading global pioneer of digital investment market solutions for private securities.

Other Grow VC Group Companies & Services For Economic Development

Peer Benchmarking

What is a Startup?

A B

C D

High Growth Ambition and very scalable business model

Low Growth Ambition and/or Non Scalable business

Market validated business

model

Unvalidated business model

"a kiosk"

"new startup"

“New Startup”

Startup stages

http://en.wikipedia.org/wiki/Startup_company

Startup Development?

?

Startup Development

Startup Development Phases

Build / Release Validate / Iterate

IdeationScalable product or service idea for a big enough target market. Some initial business models for how it would make money. One person or only a vague team; no confirmed commitment or no right balance of skills in the team structure yet.

ConceptingClear and meaningful target with direction for at least 3 years with milestones how to get there, -> 3, 6, 12, 24, 36 months… Team of two or three core founding partners with balanced ownership. Can also already have some extended team with lighter commitment (stock options and or cash compensation)

CommitmentCommitted and balanced founding team. Able to develop the product or service (Minimum Viable Product) without dependency of uncommitted external resources, or already an initial product or service in place. Existing signed shareholder agreement between founders, with milestones, committed time and money use, for at least 2+ years with vesting.

ValidationCan demonstrate some user growth and or revenue (initial traction). Continue to attract additional resources (money or sweat equity) for equity or future revenue. Looking for clear market validation (Product Market Fit), to move into scaling.

ScalingShowing a clear, growing and measurable user and or market traction in a big or rapidly growing target market. Can and wants to scale fast. May have attracted significant funding.

EstablishingAchieved great growth, that can expected to continue. No longer needs to struggle to get resources and can acquire those easily. Continues to grow and often wants to culturally continue behaving like a "startup" for as long as possible. Founders exit or continue business as usual.

Minimum Viable Product

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Vision > Target > Mission Growth

Idea / Team Fit Product / Market Fit Business Model / Market Fit

STARTUP DEVELOPMENT PHASES

● Business Model Canvas● Co-founder Team Building Scale / Expand

-2 -1 30 21

Startup Team

Startup Team● Founder’s Role● Effective Startup Team Structure and System of

Incentives● The Art of Hiring and Getting Hired

Team Building “Toolkit”

Team Building “Toolkit”

● Vision -> Target (10+years)● Mission ● Attitude & Culture● Shareholder Agreement (SHA)● Extended team members● Advisors & Mentors

Set a clear target!

● Without a clear target you can not plan or make a strategy to get there

● With target you can get focus● Good way to define a target is to write a vision that is

both clear and descriptive enough, but also flexible enough to last time

● Your strategy & plan to get there is your mission● Clearly defined Vision, mission and focus will help you

evaluate new opportunities, against if they take you closer or further from the target and act based on that

Why Target Matters?

Target● Without a target you can not start moving forward as

you can not know if the direction is right● When you have set the target you can start planning the

journey to get there● Just moving forward is not progress

No target

?

General Observations Of Targets ● Set too low ambition● Too short term ● Does not take to account the competition factor over

time● Does not take to account enough external factors

○ markets changes○ megatrends○ financial turmoil

● Often nothing in between● Wrong market timing (too early / late)

Why set a high ambition target● Whatever target you set it will guide you● Modest target may feel easier to achieve but you rarely

would archive beyond your target● Bigger target will force you to design and test more

scalable tools and models of working ● And even if you don't reach it, it's still often more than

with modes target○ "Aim for the stars, land on the moon"

● Its very different plan to handle 10000 customers around the world than 100 at your city

Mission

Mission

Start Target

Plan

Start Target

Plan to reach the target

Reality

Start

Target

Reaching the target

What helps?

How to attack a high ambition target?

● Break it down it to milestones● Design it backwards● Design everything for scalability● Its different to be able to handle 10000

customers around the world than 100 at your city

Setting milestones

Start Target

1 2 3 4 5

Set milestones to help navigate

Setting milestones

Start Target

5

Start by making them all from backwards from the target in high level

4

Setting milestones

Start Target

1 2 3 4 5

Then from start to next 1 & 2 milestones in more detail

Take Action!

Start Target

1 2 3 4 5

Take action on reaching the first milestone while keeping the focus on next

one and the target.

The new reality

StartTarget

12

3 4

5

But it actually becomes to this

Start

Target

12

3 4

56

7

8

If the milestones are reached the ambition grows and new target and milestones are set based on the pace, learnings market

development etc.

Attitude & Culture

Attitude

● If you have no right "get it done" attitude, no skills will matter

● But right skills with the right attitude is what you need

Company Culture● Fairness, transparency, honesty & communication● Team is key. It's more important than the idea you start

with● Good team can make success even from a bad idea as

they learn, adapt and can find the right idea● Bad team can't get even a good idea to work (unless

being lucky) ● Those that do more are more lucky

○ volume always leads to more opportunities and faster learning

Building the best Team ● Look people that have other/better skills than you (to learn)● Look for type A people● Type A people are often motivated more by the vision,

journey & challenge than the money alone● Type A people look for other A people they want to work with● Type B people have commitment issues and are less

motivated by challenges and more about money● Type B people look for type C people so they can look better

than they are

Typical roles in a startup

● Core operative Co-founders (min.2 max. 3)● Other founding team members/partners● Other team & employees● Advisors● Mentors● Board Members● Investors

About titles in a startup

● Titles are needed for terminology and external communications

● Inside the founding team those should be considered as responsibility roles not hierarchy

● SHA is what matters

Operative & Strategy balance● Separate operative and strategy people/roles (hats)● and separate strategy and operative focus

○ operative focus = focus on action and reaching the next milestone

○ strategy = to stop, step back and re-evaluate the target, milestones progress & learnings. Adjust as needed

○ time for strategy review?■ At the start ■ quarterly in the early days■ once or twice per year on the mid stages depending on pace■ High growth stage -> monthly

SHA (1st founders, later investors)● Ownership structures● Intellectual property rights (IPR) rules● Commitments & Vesting● Tasks & Roles of partners● Competition clauses, Confidentiality● Partner/shareholder entry & exit situations● Buy Back Option in normal Partner Exit Situation● Rules Governing Share Disposal● Market Value Determination● Communication among Partners to the Agreement● Disputes and Governing Law

Success

idea + plan + action + timing

= reaching a set target

Successidea + plan (set of initial

assumptions) + action ((volume x testing assumptions - failures) +

(volume x testing improved assumptions - failures)) + timing =

reaching a target

Valto Loikkanenvalto@growvc.com

+358 400 421 551 (FIN)+1 415 854-0546 (US)

Grow VC Group ++www.growvc.com ++

@growvc ++

Thank You!