Investors Paper by xVRZCqJ

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									 Α Microfund targeting Emerging tech and
the Web in Greece and Southeastern Europe

         www.theopenfund.com
                         The Vision
 Create an ecosystem that will promote high tech entrepreneurship
(business + technology) and will yield high returns to all participants



                    Entrepreneurs


                                          Network of Advisors
      Executive
        Board

                           Investors
               The First step
     Invest and foster the most promising startups

Open call for proposals

Selection of the best ideas or prototypes
(up to 5 for every round)

Fund and incubate the most promising
(20k-30k€)

Provide advice and guidance until the exit
AGENDA

WHO ARE WE
THE OPPORTUNITY
THE PROCESS
INVESTOR INFORMATION
                Executive Board Team
    Managing Directors
•   Georgios Kasselakis, Entrepreneur, Organizer Thessaloniki Open Coffee
     – Operations
•   George Tziralis, Co-Founder & CEO, AskMarkets, Principal Organizer of Athens
    Open Coffee
     – Overall Management / Operations
    Board Members
•   Apostolos Apostolakis, Co-founder and CFO, e-shop.gr, Athens
•   Dimitris Athanasiadis, Entrepreneur, Co-Organizer of Athens Open Coffee
     – Operations
•   Sokratis Papafloratos, Co-founder and CEO, trustedplaces.com, London
•   Spiros Xanthos, Co-founder and VP of Engineering, Pattern Insight, Mountain
    View CA
•   Teresa Farmaki, Head of Private Equity & Operating CEO, Piraeus Bank &
    Pireaus-TANEO clean tech fund
                         Advisors (so far)
            A strong network of advisors has been formed
             (and growing) to help the funded companies
• Startup advisors
    – Tasso Argyros, Co-Founder & CTO, Aster Data Systems
         • Raised more than $25 million of funding in 3 years
    – Apostolos Apostolakis, Co-Founder & CFO e-shop.gr
         • Grew e-shop.gr to more than 120 millions of revenue
    – Sokratis Papafloratos, Co-founder and CEO, trustedplaces.com, London
    – Andy McLoughlin, Co-founder and Product Director, Huddle.com
    – Spiros Xanthos, Co-Founder & VP of Engineering, Pattern Insight
         • Turned university technology to a successful startup
• Technology advisors
    –   Haris Ermopoulos, Software Engineer for Google File System
    –   Panos Ipeirotis, Associate Professor CS at Stern Biz School NYU
    –   Georgios Kasselakis, Entrepreneur, Organizer Thessaloniki Open Coffee
    –   Patrick Malone, CTO Microsoft Hellas
         • MS is also a sponsor
                     Advisors (so far)
• Investor Community
   – Franceso Benincasa, Director at Ultimate Holdings
        • Networking in the UK
   – Aristos Doxiadis, Managing Director Notos Associates
   – Onic Paladjian, Director at Capital Connect Ventures
        • Founded several successful startups in the past himself
• Sales and management
   – John R. Lovitt, Investor, former SVP at IBM/Rational
        • Interested in investing
   –   Yiannis Methodios, Ex-CEO (Greece), Accenture
   –   George Saliaris Fasseas, Country Manager (Greece), Google
   –   Christos Tsangos, CEO (Greece) Microsoft
   –   Ioannis Vasilaras, Ex-CEO, Infote
• Accounting and legal
   – Andreas Akavalos, Ex-CEO (Greece), PriceWaterhouseCoopers
                     Advisors (so far)
• PR, Marketing, New Media
   – Petros Katsampouris, CEO, Vivechrom
   – George Tziralis, Organizer of Open Coffee Greece
       • Grew Open Coffee GR from 0 to more than 300 people per event
AGENDA

WHO ARE WE
THE OPPORTUNITY
THE PROCESS
INVESTOR INFORMATION
    Necessary Preconditions Exist
• Education
  – 1.7% of the population holding Masters’ degrees &
    PhDs (among the highest in Europe)
  – Highest per capita number (in Europe) of people
    who study abroad (and want to return to Greece)
• Community & Entrepreneurial Momentum
  – Open Coffee attracts ~300 participants per month
    in two cities. Proportional count for 4 more cities.
  – “Innovation 2006” competition from Otenet
    attracted 2700 participants
                                                                   Axis Title




                                         0.00%
                                                 1.00%
                                                         2.00%
                                                                 3.00%
                                                                           4.00%
                                                                                   5.00%
                                                                                           6.00%
                                                                                                   7.00%
                             Lithuania
                                Latvia
                               Greece
                              Finland
                         United States
                               Poland
                             Slovenia
                              Estonia
                               Iceland
                              Sweden
                              Norway
                             Hungary
                             Denmark
                               Ireland
                                Spain
                             Romania
                      United Kingdom
                              Belgium
                              Slovakia
                          Netherlands




Source: Eurostat
                             Portugal
                               France
                                 Italy
                               Turkey
                       Czech Republic
                              Bulgaria
                                                                                                           % population in Higher & Highest Education




                                Japan
                                                                                                                                                        Untapped Potential




                               Croatia
                               Austria
                             Germany
                          Switzerland
                               Cyprus
                              FYROM
                              Albania
                                Malta
                         Liechtenstein
                   Luxembourg (Grand-…
                    Availability of Funding

               Western Europe & World
Availability




               Seed funding   Public companies   Buyout
                    Availability of Funding

               Greece & SE Europe
Availability




                    Seed stage funding is
                    nonexistent today in
                    Greece and SE Europe




               Seed funding    Public companies   Buyout
         Distribution of Funding


Stage                 Greece (‘07)                   Europe (‘07)
Early                 0                              €3.35 B
                                                             ↓ 1.2x
Development           €52 M                          €3.9 B
                                 ↓ 2x                        ↓ 2.5x
VC                    €102 M                         €10 B
                                 ↓52x                        ↓ 6x
Buyout                €5.4 B                         €60 B


Source: Private Equity Activity Survey 2008, European PE and VC Association
                                   Seed funding (% GDP)
United Kingdom                                                                                                                 0.224
        Sweden                                         0.058
              EU                                    0.053
           Israel                           0.040
       Portugal                             0.039
  United States                          0.035
          France                      0.030
         Finland                    0.027
           Spain                    0.027
    Switzerland                   0.024
         Iceland                  0.024
         Ireland             0.015
       Denmark               0.015
        Norway              0.013
    Netherlands            0.012
        Belgium            0.012
      Germany             0.011
       Hungary         0.005
       Romania        0.004
         Austria      0.003
            Italy    0.002
         Greece      0.002
         Poland     0.001
        Slovakia    0.001
           Latvia   0.000
 Czech Republic     0.000
                0.000      0.020       0.040        0.060      0.080   0.100   0.120   0.140   0.160   0.180   0.200   0.220       0.240
 Privileged access to the startup ecosystem in Greece
• More than 40 events
   – Held hands with every single related event in Greece
• 2500+ total attendants
• 132 presentations
• 0 budget
• Guest speakers, including:
   – J. Calacanis (Blogs inc)
   – K. Mitsotakis (Former VC, Member of the Greek parliament)
   – A. Diamantopoulou (EU Commissioner, Shadow minister of
      Development)
   – V. Makios (Corallia, semiconductor companies incubator)
   – 10s more
AGENDA

WHO ARE WE
THE OPPORTUNITY
THE PROCESS
INVESTOR INFORMATION
                      Structure
 Connect entrepreneurs and investors, provide all that is
   needed to start, grow and sell successful ventures


                         OPENFUND

                        Executive Board
Entrepreneurs
                           Investors



                                          Network of Advisors
     Find the Best Entrepreneurs
• We have almost set-up from scratch an
  entrepreneurial ecosystem (open coffee)
• Now we are looking for the best and brightest,
  to set-up the most capable of teams and
  invest themselves exclusively for 4 months
• To build and launch disrupting products
• The idea is just a start, team and execution is
  of paramount importance
        The Selection Process
• Three rounds of selection:
  1. Online submission
  2. In person interview
  3. Presentation day (investors participate)
• Stake in up to 5 ventures / round
• 20-30K€ per investment for 15% equity
• Iterating, 4 month stages
      Benefits for Entrepreneurs
• Mentoring & networking
  – Leverage advice & connections from the best in the field,
    tech & business
  – Advice can be as useful as cash
• Funding
  – Seed capital to cover all operational expenses for the 4-
    month "incubation" period
• Smooth Start
  – Create the company for them at no cost
  – Handle all the legal / accounting issues, provide advise
• Grow
  – Take direct advantage of the network to grow and raise
    more money as needed
         Targeted business models
     We bring expertise on these models on board,
              we are open to others too

•   subscriptions (fixed/variable), freemium
•   license, SaaS, white label
•   marketplaces, ecommerce and open calls
•   advertising, content re-purpose & affiliate sales
•   hybrids of the above (micropayments, affiliate
    advertising etc)
AGENDA

WHO ARE WE
THE OPPORTUNITY
THE PROCESS
INVESTOR INFORMATION
          Benefits for Investors
    Access to the best opportunities in SE Europe

• Open Coffee Greece is the ultimate
  destination for new startups
• Micro funds (YCombinator, Techstarts, etc.),
  have been very successful
  – Nevertheless, closest to Greece is Seedcamp,
    based in the UK
          Benefits for Investors
     Effortless diversification of the investments

• The OpenFund organizes everything (processes,
  paperwork etc)
• Investors are involved as much (or as little) as
  they want with the funded companies
  – They do participate in the selection
• Diversify by participating in every company of a
  round
• Extensive network of advisors and investors
  multiplies chances for successful exit
          Benefits for Investors
 Social Impact and Extensive Promotion Opportunities

• Promote entrepreneurship in Greece & SE
  Europe
  – Funding and advising is what’s missing
  – Access to a portfolio with the most promising
    ventures in the region
• Open Coffee has been recognized by the media
  for promoting entrepreneurship
  – High profile successful entrepreneurs, executives
    and politicians participated and want to help
Investment Approach: Funding 2.0
    Evolution of technology:
        Open Source, AWS, AppEngine, Azure,
        Cloud Matrix, Ruby on Rails…

 4-strong team of great individuals is enough to
 create a disrupting product

Invest in on-line services     Iterate and Improve

Aim for the global market
Sharing the Stakes


5% Management Board
10% Investors
85% Entrepreneurs
100%
             Investor concerns
• Minimum participation = 30.000€
• Amount is spread on all the companies of a
  round, up to 5
• If sufficient for more than 1 round, it is used in
  a predefined manner over rounds
• Example: 30.000€ gives a 2.4% stake in 5
  companies
• Remember: a success for our startups is to sell
  or have profit of x-times over the seed amount
               Investor rights

• Tag along for all investors of each company
• Right of first refusal for all investors of each
  company
• No drag along
• Some rights are arbitrated by the Executive
  Board when many investors are
  participating*
                    Breakeven Analysis
233K € average exit for Investors to break even,
            beyond that, it’s Profit
Profit (in 1000s)




                        Average Exit (in 1000s)
                          Past cases
• Goal achievable according to experience from similar ventures
  (YCombinator, SeedCamp, TechStars)
• SeedCamp
   – 6 & 7 companies in 2007-8
   – 30% of the companies had 2nd round valuated at minimum $1M
• TechStars
   –   19 companies in 2 years, 40% were sold
   –   $6.9M for SocialThing.com
   –   IntenseDebate sold to Wordpress.com (undisclosed $>10M)
   –   $.8M average 2nd round of funding for the rest
• YCombinator
   – 80 companies in 4 years
   – 2nd rounds include: Xobni $5.2M, Loopt $12M,
                         Justin.tv $2M, Scribd $3.7+9M
   – Sales include Omnisio $15M, Auctomatic $5M, Reddit $>10M

								
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