Building companies that
What is the Problem?
Startups are chaos by nature. Unlike established companies, startups must create all critical aspects of a business at once - value proposition, business modelling, product market fit, team-building, financing, legal set-up... Startups must therefore be prepared to focus on things that have an impact; to think outside the box, because conditions on the ground will change so quickly that the original well thought-out business plan becomes irrelevant.
Why does it matter?
If you can’t manage chaos and uncertainty and if you can’t focus yourself on relevant action, then your customers, competitors, employees and investors will make your decisions for you and you will run out of money and your company will die.
Therefore the best way to grow your company is to create a decisive mind-set that can quickly separate the crucial from the irrelevant and focusses on what maters – Management of Business Value Drivers.
How do I help you?
Building a company means being able to manage chaos. Based on my experience in the last 10 years in my roles as venture capital investor, founder and consultant I have developed a company-building-approach that breaks down the process of building a company into four phases. Each phase has its own challenges and therefore Business Value Drivers. I call it - The Startup-Value-Bridge.
Startup Value Bridge – Build & capture startup value
Building a startup means building an organization to search for a solution to a problem via a scalable, repeatable, and profitable business model that can deliver fast growth. The defining activity of a startup in the first stage is experimentation – to learn and iterate for the discovery of the profitable business model by a passionate team able to follow the path. In this phase I help you to
- develop a cutting edge value proposition & business model
- find the right product market-fit and show relevant traction
- elaborate a positioning strategy and a go-to market plan
- assess completeness of your team and prepare to close skill gaps.
Business Angels and Venture Capitalists see hundreds of teams every year and only a handful of them – around 5% -receive a funding. Why? – Only few truly understand what it means to be ready for investment. There are a lot of pitfalls when raising funds – some are startup-related and some require the understanding of the VC business model and therefore a thorough preparation for the investment process. In this phase I help you to
- "translate" your plan into investor-ready fundraising documents
- identify and address the most suitable investors
- prepare and master the due diligence process
- negotiate with foresight, knowing that the first financing round is not the last
Execution & Growth
If you’ve managed to survive stages 1 & 2 it won’t take long before your attention turns to how to build an organisation that scales. Unfortunately, a poor strategy for scaling your startup, can quickly undermine all your previous work. In the scale-up phase processes and unit economics become relevant and the complexity of decision making changes. In this phase I help you to
- reassess your company-building-strategy, if growth goals are not achieved
- establish relevant key performance indicators that ultimately allow you to steer your company
- timely prepare for the next-round funding not to lose traction
- professionalise your investor relations and manage credit ratings.
Exit Planing & M&A
The most important concept in exit-planning is that of transferable value. Transferable value is what your business is worth, to someone else – in many cases without you. The sooner you begin to improve your company’s value drivers and get rid of deal killers, the higher the multiple you can demand (and receive) on the same amount of EBITDA than can a company with average value drivers. In this phase I help you to
- align your shareholders' goals and expectations
- calculate the value of your company and find ways to optimise relevant value drivers
- examine suitable exit options and identify potential buyers
- master the M&A process and structure a deal to get the highest return possible.
The strategist & business guy.
With very few exceptions, founders of technology startups lack business management skills and experience in building successful companies. For those founder teams that plan to fill this gap - I am happy to step in as your advisor or in a long-term view as part of your team. Let’s discuss.
Eligiusz Skwara – Founder of the Startup Value Bridge
The Startup Value Bridge as a consulting & company-building approach was developed on the basis of ten years of experience in building, investing and advising high-tech companies.
Who am I?
My name is Eligiusz Skwara (41). I am a former Investment manager of Leonardo Venture – a Germany based High-Tech Venture Capital fund. Before I joint Leonardo, I worked at Ernst & Young for five years in the transaction advisory department providing due diligence and M&A services to a variety of corporations.
I hold a Business Administration Diploma from the University of Mannheim and a Master of International Business degree from the Macquarie University in Sydney receiving also the Macquarie University Prize for Investing in Emerging Markets in 2005.
The “why” for the Startup Value Bridge
1. 95% of pitching startups receive a “no” from VC’s.
In many cases technology is so much at the centre of attention that startups miss to develop suitable business models around it, validate key assumptions, gain relevant traction or study the competition. The least have an idea of which KPIs are relevant to their business model, so they have no idea how to build and execute a successful growth strategy and - very importantly – how much it will cost. Furthermore, almost no startup company had an idea of the VC business model and the pain that investors have to deal with.
2. Most Startups fail to get ready for scale
Scale-ups have perfected what startups are still experimenting with like customer segmentation, customer acquisition costs, and product features. What I learned in the last years - scaling is all about understanding a company’s unit economics, managing risk and putting processes and management hierarchy/talent in place. This transition is very hard to manage by founders as risk management becomes more and more crucial with investors, customers, and team members now expect to quickly multiply results.
3. Missed value due to failed exit-readiness
When exiting a startup the first step is to clarify personal goals of those who plan to sell. Startup founders often keep all the operating metrics they need to run their business in their head. What they forget is to think early, what an acquirer or stockholder looks for to assess the health of the business and what he is going to pay for. Missing exit-readiness means longer M&A processes and lower selling prices.
All of the above aspects are manageable - some immediately, others require a longer preparation and implementation time. Contact me and let me know where you stand.
Tel: +49 621 / 121 811 95
E-mail: info [at] e-s-m-c.de
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