1 / 24

3TS Venture Partners

3TS Venture Partners. Valuation of the New Economy Businesses March 9, 2001. Contents. What Is Valuation Variety of Business Cases Investor’s Perception Applicable Methodologies Lessons Learned Who We Are. What Is Valuation. Goals of the Company Real finance - art or science?

kai-hunt
Télécharger la présentation

3TS Venture Partners

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 3TS Venture Partners Valuation of the New Economy Businesses March 9, 2001 3TS Venture Partners

  2. Contents • What Is Valuation • Variety of Business Cases • Investor’s Perception • Applicable Methodologies • Lessons Learned • Who We Are 3TS Venture Partners

  3. What Is Valuation • Goals of the Company • Real finance - art or science? • Useful tool • Increases probability of success • Allows you to make a right decision 3TS Venture Partners

  4. Variety of Business Cases • What is the value of your notebook? • for whom? • when? • where? • with what? • for what purpose? 3TS Venture Partners

  5. Variety of Business Cases • When it is needed? • purchases and sales of businesses • M&A processes • Shareholder value creation • Litigation • Settlements • Taxation • Estimation of intangible assets 3TS Venture Partners

  6. Variety of Business Cases • Ownership • certain rights and obligations attached to the particular shareholding, participation, usage, lease, etc. • Bases of valuation • owner value • market value • fair value 3TS Venture Partners

  7. Variety of Business Cases • Different New Economy entities • Valuation techniques depend on the kind of business. The variety of internet applications make web-based businesses very different from each other • New Economy business is every business, which is: • Internet Service Provider • Content Provider • Portal/vortal • B2B marketplace • E-tailer • etc. Scope of operations Kind of business 3TS Venture Partners

  8. Investor’s Perception What has happened since April 2000? • Nobody pays for words „internet strategy” • Deep analysis of the business models is a must • Valuations are much lower, even for developed businesses • Consolidation play is of major importance 3TS Venture Partners

  9. Investor’s Perceptions • Key questions: • Where are the revenues coming from? • What is the strategy? • What are the competitive advantages? • How big is the market? • What is the structure of the market? ...and... • How are you going to achieve this? 3TS Venture Partners

  10. Applicable Methodologies • Based on multiples • Discounted cash-flow (DCF) DCF is more and more often used methodology as nobody is interested in users with no revenue generation potential 3TS Venture Partners

  11. Applicable Methodologies • Based on Multiples • Methods based on multiples derive the market value of the shareholding from the comparison of the particular operational figures with the companies listed on the public markets or being targets on the M&A market • In case of New Economy businesses these figures can be: • Profits • Revenues • User statistics (e.g. registered) • Traffic generated (e.g page hits) 3TS Venture Partners

  12. Applicable Methodologies • Discounted cash-flow (DCF) • DCF derives the market value of the shareholding from the forecasted cash flows generated by the Company • DCF has three key elements: • Cash flow during the projected period • Right discount rate • Terminal Value, i.e. the value of the firm after the projected period 3TS Venture Partners

  13. Applicable Methodologies • Limitations to the methodologies • Lack of comparable data • Size differences among the sample companies • Diversified stages of development and growth potentials • Risk factors not satisfactory defined or valued • Discount rates not specifically describing stages of development or scenarios • Subjective evaluation used when defining risk factors that are already valued by the market Multiples DCF 3TS Venture Partners

  14. Applicable Methodologies • Which method is the right one? • There is no such! • You should use more than one, because: • New Economy business are often loss making • DCF has high embedded risk of forecasting, therefore discount rates should be significantly higher • Due to the sensitivity of forecasting excercise, you should pay much attention to the scenario analysis • Multiples methods are used as a cross-check for other methods 3TS Venture Partners

  15. Lessons Learned • Old good times are gone • remember important investor’s questions • The evidence is a must • nobody will pay you for your business plan without implementation • There is no ideal valuation method • use as many as possible 3TS Venture Partners

  16. Who We Are 3TS Venture Partners

  17. Who is 3TS • Created in 1999 • Venture Capital firm with $70 mm funding • Technology Sector Focus • Offices in Budapest, Prague, Warsaw • Partners: 3i Group,3i Technologieholding, Sitra 3TS Venture Partners

  18. Strategy • Focused on high-tech, communications, software and internet-related industries • EURO 0.5 - 5.0 million investments • Able to fund early stage to expansion phase • 2 - 4 year time investment horizon • Hands-on full support of the 3TS team and partners until IPO or trade sale 3TS Venture Partners

  19. 3i Group • 3i Group, EURO 1,100 million in technology investments in over 540 companies in year to 31 March 2000 • Increase of 60% • Total investments of EURO 2,100 million • Shareholders Funds EURO 9,000 million, ROE 44% • More than 70 executives with expertise in assessing technology businesses 3TS Venture Partners

  20. 3i Technologieholding • Largest VC firm in Germany • EURO 260 mm capital, approx 50 investments per year • Acquired by 3i in January 2000 • IRR of +110% • Investments - Intershop, Brokat, Ricardo.de, Poet Software, CPU 3TS Venture Partners

  21. Sitra • Finnish National Fund for Research & Development • Invests in other specialized funds • Over 10 funds in Finland - 30% of all invested capital, 23 funds in total • EURO 1,000 million under management • Gives access to funds and portfolio companies 3TS Venture Partners

  22. Recent Investments • Open - CATV, data software/hardware • MobilAsk - WAP, wireless hosting solutions • E Group – Business Automation, E-solutions • Voxline – Mobil Internet Software • Paymentor – Online receivables collection • LaserBit – Laser wireless data transmission • CV-Online – Online career site 3TS Venture Partners

  23. What Makes Us Different • Technology Focus • Regional Funds with Local Presence • Access to 3i and Sitra expertise and portfolio companies • Hands-on Approach • Track Record in VC, Dedicated Team 3TS Venture Partners

  24. 3TS Warsaw • Regus Business Centre, ul. Prusa 2 • Hubert Stepniewicz, Investment Manager • Piotr Nocen, Investment Analyst Tel: +48 22 657 04 75 Fax: +48 22 657 01 58 3TS Venture Partners

More Related