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Role of Angel Investors in the Swiss Startup Ecosystem Dr. Thomas Dübendorfer President, Swiss ICT Investor Club (SICTIC) www.sictic.ch SIRA Startup Event at EPFL in Lausanne March 4 th , 2018

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Page 1: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Role of Angel Investors in the Swiss Startup Ecosystem

Dr. Thomas DübendorferPresident, Swiss ICT Investor Club (SICTIC)

www.sictic.ch

SIRA Startup Event at EPFL in LausanneMarch 4th, 2018

Page 2: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Dr. Thomas Dübendorfer

[email protected]

2001

2001-2005

2006 -2013

2014 -

President, Swiss ICT Investor Club (SICTIC); Business Angel, Security Expert and Ex-GooglerDr. sc. ETH, PhD in Computer Science from ETH Zürich; minor in economics

Angel Co-Founder of:

SOLD

SOLD

25+ direct tech startup investments

Page 3: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Startup Support Ecosystemin Switzerland

Page 4: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Swiss Startup

Ecosystem

Events & Networking

Science, Teaching &Transfer

Training Consulting & Coaching

Awards & Support

Investors

Infrastructure & Accelerators

Information Platforms

Startup Campus Connect

START Global

Swiss Startup Day

Startup Weekend

Entrepreneurship @ ZHAW

Entrepreneurs Club ETH ZH

Young EntrepreneursClub HSG

Startup Fair

ETH Transfer

Startup @ UZH

Startup @ HSG

Unitectra

EMPAChairs for Innovation & Entrepreneurship

CTI/Innosuisse

IFJ/Venture Lab

Startup.ch Awards

Startups.ch

Genilem

CTI Startup/Innosuisse

Regional Startup Support

Innovation 2Business ZHAW Startup

Challenge

Heuberger Winterthur Preis

Venture.chCTI Startup

W.A. De Vigier

Pionierpreis

Startfeld Diamant

Top 100 Swiss Startups

StartAngels Network

B-to-v

investiere.ch

Digitalswitzerland/Swiss Startup Invest

Business Angels Schweiz (BAS)

Corporate Venturing (Zühlke, Swisscom etc.)

Biotechnopark Schlieren

Incubator for Cultural Entrepreneurship ZHDK

Kickstart Accelerator

Blue Lion

Impact Hub

glaTEC

Technopark ZH

Technopark Winterthur

Runway StartupIncubator

Startups.ch

KTI.admin.chGründen.ch

Fongit

Crypto Valley Association

Swiss Finance Startups

Startfeld

GROW Wädenswil

Thomson ReutersLabs

Swiss StartupFactory

Mass Challenge

Go Beyond Investing

Nexussquared

FUSION

Fongit

ZKBF10 Accelerator& Incubator

Swiss Finance + Technology Association (SFTA)

STARTUP Campus

SEF Award

Cofoundme.org

startup space

Venture Kick

venture leaders

startwerk.ch

earlyhire.ch

startup.ch

StartupGrind.ch

Swiss Fintech Innovations

Swiss FinTech Awards

Startupticker.ch

FINTECH Circle

DIGITAL Festival

Bitcoin AssociationSwitzerland

FINANCE 2.0

TiVenture

StartCup Ticino

SUPSI

START-UPCentro Promozione Fondazione AGIRE

Tecnopolo Ticino

OltreconfiniTI

ARAF

Divisione della formazione professionale

Fondazione AGIRE

Innopark

Servizio aziendeURC

SUPSI

fondounimpresa.ch

EuresearchFederal Institute of IP

Swiss Venture Club

progettiamo.ch

StartCup TI

Banco Stato

CFSUD

S-GE

aiti Associazione Bancaria TI

Swissnex

Centro Promozione Startup

Baselaunch

Be-advanced

STIStiftung

Scale-upVaud

VC Funds(Creathor Ventures, Polytech Ventures, Redalpine)

Page 5: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Business Angels

Page 6: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Business Angel (or Angel Investor)

• A Business Angel is a private individual who invests his/her own money directly into a startup, typically against equity (Aktien) or convertible note (Wandeldarlehen). • Most Business Angels have a full-time job and invest as hobby.• A Business Angel must be capable of taking a loss of the entire

investment due to the high risk that a startup will fail; as a consequence most angel investors are high net worth individuals.• Many angels are members of a business angel club.

Page 7: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

“Smart” money?

8

What business angels share with startups in addition to money:• Skills• Work experience• Domain knowledge• Network to experts• Network to potential customersAlmost everyone with 5+ years full-time work experience has “smart” money to offer!

Page 8: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Who is the right Angel Investor?

Check all the motivations that apply to your angel investors:( ) Help entrepreneurs ( ) Get rich quick( ) Foster innovation ( ) Tell founders what is best ( ) Connect startups to customers ( ) Get paid for consulting startups( ) Like to take a risk ( ) Take control of the startup

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Page 9: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Who is the right Angel Investor?

Check all the motivations that apply to your angel investors:( ) Help entrepreneurs ( ) Get rich quick( ) Foster innovation ( ) Tell founders what is best ( ) Connect startups to customers ( ) Get paid for consulting startups( ) Like to take a risk ( ) Take control of the startup

Great Angel Investors are driven by the green motivations.Investors with a motivation in red can turn into a big pain for entrepreneurs.

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Page 10: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Great Motivations for Angel Investors

• Coaching satisfaction (interact with smart people, coach them)• Giving back (money, time)• Creating jobs • New meaning for the career (open up, connect outside main

job, learn about innovation; might even find a new exciting job in a startup)• Shaping the future (empower entrepreneurs to build novel

products and services, help to innovate, foster talents that can change the world)• Return on investments (should not be the only motivation)

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Page 11: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Making best Use of Angel Investors

• Use their business network to grow faster• to get more customers earlier• to get expert advice• to hire employees

• Use them as sparring partner for advice• to bounce your crazy ideas• to get advice before taking important decisions

• Set expectations rights• make sure they are available when you need them most (hiring core

team members, product/market fit, winning first customers, preparing next investment round) • don’t have them make decisions for you 12

Page 12: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

How Business Angels Added Value

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Marcos MonteiroCEO and Co-Founderveezoo AG

The knowledge of our SICTIC Business Angels reduced the uncertainty of our startup - and that was more valuable than money, especially in the beginning.

Page 13: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Business Angel Clubs

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Page 14: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Startup Pitching Events

SICTIC Investor Day at EPFL, Lausanne15

Page 15: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

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Red Flags:• “one person show” –

creates a single point of failure;even harder to survive difficult times

• friends & family in key positions –instead of best skilled people

Page 16: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Business Angel Club

• Community of Investors• The club has investors as members; often organized as an association; easy

to find co-investors. Lead Investors negotiate the investment terms.

• Startup Dealflow• Startups apply online for pitching at a Business Angel Club.• Startups with a good business potential selected by a jury are invited to

pitch in front of investors at a pitching event organized by the angel club.

• Fees: membership, investment, reporting and exit commissions(SICTIC: CHF 500.-/year excl. VAT investor flat fee, no commission)

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Page 17: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

www.sictic.ch | #SICTIC | @ICTInvestorClub | /SwissICTInvestorClub

● 200+ Angel Investors (as of May 4th, 2018)

● 107 startups pitched (at 125 startup pitches) in year 2017 in six locations: Zurich, Baar, Lausanne, Geneva, Lugano, Schaan (Liechtenstein)

● 30% chance for funding if a startup pitched at SICTIC in 2017

● 15 investor events organized by SICTIC in year 2017

Swiss ICT Investor Club (SICTIC) in Numbers

Page 18: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Venture Investing

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Page 19: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

938 Mio. Venture Capital for Swiss Startups

Source:Swiss Venture Capital Report 2018Swiss ICT Investor Club (SICTIC)

33+ (35%) StartupsMore than 33 early-stage tech startups that have pitched at an investor event of the Swiss ICT Investor Club (SICTIC) in 2017 got funding.

91 Tech Startupsgot funding in Switzerland in 2017

Page 20: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

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Types of Startup Investors

Complexityof Deal Terms

Size of CapitalInvested

Family & Friends & Fools (FFF)

Business Angels

Seed Funds

Venture Capitalists

(VCs)

1.5 mio

0.2 mio

Page 21: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Caveat: Hidden fees and deal exclusivity

• Some startup fundraisers, funding platforms, investor events and some angel clubs offer “free” help at first but then take hefty investment commissions (I’ve seen up to 7%!) from the startup or investors.

• Hefty fees might also be charged for e.g. pitching at investor events, investor platform listings, pitch trainings, help with the deck, yearly (!) deal management fees, yearly (!) syndicate lead fees, exit commissions (e.g. 18% of exit proceeds), visiting a startup accelerator (up to 30% equity taken!) etc. Always ask upfront who (startup, investor) they charge what.

• Never grant exclusivity to investors or fundraisers!

Page 22: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Case Study: ContovistaIn 4.5 years from incorporation to exit.

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Page 23: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

ZKB „Finanzassistent“

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Page 24: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

How Business Angels Added Value

• Launch with a B2B product (instead of as a B2C portal)• Strong focus on Personal Finance Management (PFM) as the

first product to be launched; postpone other product ideas• Building trust with first banks as customers• Homework on security & privacy was done before selling to the first

bank• Introductions to CIOs and CISOs in Switzerland and in Germany• Attending sales meetings with banks to have senior people on both

sides

• Strong believe in team that they will be successful

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Page 25: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

How Business Angels Add Value

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Gian Reto à PortaCEO and Co-Founder

Contovista AG

The Business Angels have strongly supported us with their know-how and business contacts in the start phase.

This support was at least as valuable as their financial investment.

Page 26: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

27Burning Man 2015

Page 27: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Company Valuation and Investments

• May 2013: Pre-Seed Investment at Incorporation & Convertible Note I

• Aug 2013: Conversion of Convertible Note I

• Feb 2014: Seed Convertible Note II (converted Dec 2014 & June 2015)

• April 2014: Fabio Bernasconi (CTO) joins core team

• March 2016: Series A - Aduno Gruppe invests “several millions” and gets 14%

• Dec 2016: Exit talks initiated by Aduno Gruppe

• Aug 2017: Exit to Aduno Gruppe, which newly holds 70%, rest remains with founders

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Pre-

Seed

Seed

(Con

v.)

Serie

s A

Seed

(Con

v.)

Exit

Pre-

Seed

(Con

v.)

Page 28: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Contovista Exit Party 2017

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Page 29: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

Dr. Thomas Dübendorfer

www.sictic.ch, [email protected]

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Thanks for attending! You’re awesome. Any Questions?

Page 30: Role of Angel Investors in the Swiss Startup Ecosystem7a1fdf8d-08ee-451a... · Swiss Startup Day Startup Weekend Entrepreneurship @ ZHAW Entrepreneurs Club ETH ZH Young Entrepreneurs

www.sictic.ch | #SICTIC | @ICTInvestorClub | /SwissICTInvestorClub

● 15.05.2018 : SICTIC Investor Day @Hotel Dante, Lugano ● 28.05.2018: SICTIC Investor Day @EPFL, Lausanne● 07.06.2018: SICTIC Investor Day @Credit Suisse, Zurich● 21.06.2018: SICTIC Investor Day with Crypto Valley Blockchain

Challenge 2018 (CHF 30’000 prize money), Zug● 11.9.2018: SICTIC Investor Day @IMD, Lausanne

Upcoming SICTIC Investor EventsSAVE THE

DATE