On 10th November the head of IFCON UAB – Skirmantas Maulevičius, who has over 20 years of experience in financial markets, had lead a lecture-seminar „Investing in early stage“. The guest was invited by the Department of Finance Engineering lecturer Lidija Kraujalienė.
"UAB IFCON" is an investment banking company, working in corporate finance and investment management fields; member of LT VCA – Lithuanian venture capital associations and LQMIA – Lithuanian Quality Management and Innovation Association. Skirmantas Maulevičius is a professional financier, has more than 20 years of successful experience in corporate and financial institution management, investment banking, financial advisory, mergers and acquisitions, as well as capital raising and strategic planning.
S. Maulevičius has shared his practice about investing possibilities for young companies: starting from the level of idea, prototype and product level, till market expansion and growth, disturbing to the market phase.
Interesting and important fact is that investments to the idea’s level product for investor is bringing from 50 till 100 percent of risk, investments to the prototype and product level product – 40 – 60 percent of risk, at market expansion and growth phase – 30 – 50 percent of risk, investments to the phase of disturbing to the market – only 10 – 25 percent of risk.
Since 1901, when it was fixed the first deal while Carnegie Steel Company LBO was sold to J.P. Morgan, and when 1946 in USA it was created two first venture capital funds: „American Research and Development Corporation (ARDC)“ ir „J.H. Whitney & Company“, nowadays we can calculate thousands of various investment funds.
So, contemporary world have as individual investors (private equity funds), as venture capital funds (VC) (often supporters of certain sphere ideas’), business angels (BA), Business incubators (BI), banks (for loans), corporate venture capitals (CVC), and other. In case of Lithuania, all these investors plays the same mission – supporting young “start-up” companies.
How investor choose ideas for investments? At the initial stage, investor should receive investment proposal, investment memorandum or business plan fro idea’s author (or team). Investor doesn’t care about the form of received document, but necessary the information inside: the idea, its validity (market share, uniqueness), return on investment (ROI), in other words – money return. Investor is following intuition. In process of choosing young companies for investments investors are complying with “rule of thumb” that means – no rules. Only marked that aspect that investors usually assess ideas in theirs range of knowledge. In addition, from 10 selected and financially supported companies only 2 – 3 brings the return and profit for investor. And this is proved statistics.
What investors are searching for? Successful business signs, team with strong leader, knowledge and competence, trust, big market, market barriers, commercial perspectives, realistic money return, and to be sure of entering to the market.
What you should keep in mind and avoid in investment proposals/memorandums, or business plans? The answer is: jargon, the wide usage of your product or if the product could be sold by itself, if there is no competition and rivals, long sentences and plans, excessive “cool”, not become UpStart, avoid also the fear.
On the initial phase of idea evaluation the presentation (for example – in power point) not necessary in practice, especially when the meeting is face to face. Significant numbers, graphs or pictures could be showed during the negotiation, therefore preparing the presentation – is not essential. Unless you are presenting the idea for the group of investors – in this case the presentation should be short (5 – 15 min.), unloaded by text, but with important numbers, market share, statistics and investment return indexes.
Dress code is also important factor during meeting with investors. For example, when you are going to deal with bank, wear the suit better, for meeting with individual investor – possible wearing casual style clothes – jeans or similar.
To reach the better success search for information about the investor as a person (or a company): taste, likes, style, what is the general culture in the investors living environment, and so on. This will help you to learn and understand better how you should behave during communication, and what to wear to adapt yourself to the investor’s environment.
Sincerely thank for Skirmantas Maulevičius for really interesting and useful information for students and sharing real practice from real investors’ world. The guest was awarded with the acknowledgement and symbolic gift of the dean of the Faculty of Business Management Prof Dr Jelena Stankevičienė.
S. Maulevičius has shared his practice about investing possibilities for young companies: starting from the level of idea, prototype and product level, till market expansion and growth, disturbing to the market phase.
Interesting and important fact is that investments to the idea’s level product for investor is bringing from 50 till 100 percent of risk, investments to the prototype and product level product – 40 – 60 percent of risk, at market expansion and growth phase – 30 – 50 percent of risk, investments to the phase of disturbing to the market – only 10 – 25 percent of risk.
Since 1901, when it was fixed the first deal while Carnegie Steel Company LBO was sold to J.P. Morgan, and when 1946 in USA it was created two first venture capital funds: „American Research and Development Corporation (ARDC)“ ir „J.H. Whitney & Company“, nowadays we can calculate thousands of various investment funds.
So, contemporary world have as individual investors (private equity funds), as venture capital funds (VC) (often supporters of certain sphere ideas’), business angels (BA), Business incubators (BI), banks (for loans), corporate venture capitals (CVC), and other. In case of Lithuania, all these investors plays the same mission – supporting young “start-up” companies.
How investor choose ideas for investments? At the initial stage, investor should receive investment proposal, investment memorandum or business plan fro idea’s author (or team). Investor doesn’t care about the form of received document, but necessary the information inside: the idea, its validity (market share, uniqueness), return on investment (ROI), in other words – money return. Investor is following intuition. In process of choosing young companies for investments investors are complying with “rule of thumb” that means – no rules. Only marked that aspect that investors usually assess ideas in theirs range of knowledge. In addition, from 10 selected and financially supported companies only 2 – 3 brings the return and profit for investor. And this is proved statistics.
What investors are searching for? Successful business signs, team with strong leader, knowledge and competence, trust, big market, market barriers, commercial perspectives, realistic money return, and to be sure of entering to the market.
What you should keep in mind and avoid in investment proposals/memorandums, or business plans? The answer is: jargon, the wide usage of your product or if the product could be sold by itself, if there is no competition and rivals, long sentences and plans, excessive “cool”, not become UpStart, avoid also the fear.
On the initial phase of idea evaluation the presentation (for example – in power point) not necessary in practice, especially when the meeting is face to face. Significant numbers, graphs or pictures could be showed during the negotiation, therefore preparing the presentation – is not essential. Unless you are presenting the idea for the group of investors – in this case the presentation should be short (5 – 15 min.), unloaded by text, but with important numbers, market share, statistics and investment return indexes.
Dress code is also important factor during meeting with investors. For example, when you are going to deal with bank, wear the suit better, for meeting with individual investor – possible wearing casual style clothes – jeans or similar.
To reach the better success search for information about the investor as a person (or a company): taste, likes, style, what is the general culture in the investors living environment, and so on. This will help you to learn and understand better how you should behave during communication, and what to wear to adapt yourself to the investor’s environment.
Sincerely thank for Skirmantas Maulevičius for really interesting and useful information for students and sharing real practice from real investors’ world. The guest was awarded with the acknowledgement and symbolic gift of the dean of the Faculty of Business Management Prof Dr Jelena Stankevičienė.
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