ujf master 2 14/10/2015
TRANSCRIPT
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Master 2 Ingénierie pour la Santé et le MédicamentUniversité Joseph Fourier, Grenoble 14/10/2015
Alain Rodermann, Managing Partner
Raising VC Moneyand More
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1. VC$2. FUNDRAI$ING3. TERM$4. WHERE
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VC$
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Georges Doriot
Someone, somewhere, is making a product that will make your product obsolete
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The Recipe
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What is the American Way of VC ?
20 companies in a fund$1b companies candidates (unicorns)2-4 blockbusters (x 10-50)
§ IPOs (big)§ Trade sales (fast)
4-6 write-offs (x 0)3-4 deals a year/ partner
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VC Business Model
Lifetime 10y+ Management fees 2%/y - Hurdle rate 7%/y- Losses 50%=> average multiple for 0 carry = 5 X
Min Target Multiple = 10 X
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VC returns
Source avc.com
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FUNDRAI$ING
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The Powerpoint Presentation
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Do VCs read business plans ?
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How many scenarios ?
Bottom up monthly financial planDon’t underestimate salaries and staff sizeNet income higher than 25% is suspectInclude international business if anyCan you make 10M€, 100M€ or more in sales ?
§ Money availability drives financial strategy
Conservative post money keeps options openTry hiring a good fundraiserVCs don’t sign NDAs
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-‐4
-‐2
0
2
4
6
8
10
12
14
16
1 2 3 4 5 6 7 8 9
in
out
in -‐ out
cash position
Phasing
21
0,1 0,7 2+
Break-‐even
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Should you accept more money than you need ?
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23
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Geographical Breakdown
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VC selection rate
1/300
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European Market
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European Market
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European Market
Source dowjones Venturewire ; nb of deals 2Q2014
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Biotech IPos
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Biotech VC Market
33
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Healthcare VC market
34
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Healthcare : 30% of EU VC Investments
35
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15 Top European Biotech VCs
1. Woodford2. Sofinnova Partners3. TVM4. Abingworth5. Wellington6. HBM7. Sunstone
8. Seventure9. Dievini10. Forbion11. Truffle12. Malin13. Syncona14. Edmond de
Rothschild15. Ysios
36
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TERM$
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38Guillaume Bodinier,Contrat de mariage en Italie, 1831
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Founder Dream
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A bubble in the USA
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Reality Check
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The VC Arsenal
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Is there a Valuation Magic Formula ?
R)(1FV
R)(1CiNPV n
1
0i ++
+=∑
−n
Rodermann MagicSystem
⎪⎩
⎪⎨⎧ ∏ −×+−≤
≤+
≤
nDiCpremoney
CpremoneyC
0100
0
0
)1(FV
%50%15
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Liquidation Preference Adjustments
1X Double dip, participating 1X Single dip
invested shares % nominal premium
founders 100 000,00 € 100000 67% 1,00 € -‐ €
VC 500 000,00 € 50000 33% 1,00 € 9,00 €
600 000,00 € 150000
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Full Ratchet & Washout
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Example
Ratchet § investor 2 wants to get 20% for 1M€
48
Series shareholderPre
Money k€
k€invested
€ per share New shares total
sharesPost
money k€ Options
seed Inception 0 100 1 100000 100000 100
AInvestor 1
100003000
10030000
130000 13000ESOP 3000
Binvestor 2
13001000
10,00100000
500000 50000
ratchet shares for Investor 1 0 270000
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Veto Rights
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Reps and Warranties
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How not to be fired in 6 months ?
Build a balanced board of brilliant directors
Hire an experienced chairman
Pay an experienced specialized coach
Disclose problems as they arriveNever Lie
Write minutes just after board meetings
Do what you promised to do
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Becoming Global –Should I stay or Should I go ?
WHERE
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Operational efficiency
CLIENTS PARTNERSTALENTS TAX SUBSIDIES
SALES & MKT OPERATIONS R&D HEADQUARTERS
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EU’s Four Freedoms
Free movement Goods
Capital
Services
People
within EU's
28 member states
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Transatlantic Trade and Investment Partnership (in progress)
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Access to Funding
VC
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Corporate Tax Optimisation
SUBSTANCE=PEOPLE+DECISIONBRPS : OECD Base Erosion and Profit Shifting Project
Double Irish DutchSandwich
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Where will you live ? : Fame
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Where will you live ? : Lifestyle
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Where will you live ? : Tax
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Choose a pill
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Alain RodermannManaging Partner
@alroder
Questions