DFJ Esprit is a venture capital firm that has grown to $1 billion in funds. They have invested in over 200 European technology companies, including CSR, Lovefilm, Skype, Tesla, and Hotmail. They are the European associate of top Silicon Valley VC firm Draper Fisher Jurvetson. DFJ Esprit has 13 partners based across Europe and DFJ manages over $6 billion globally. The presentation discusses trends in the European venture capital market and outlines DFJ Esprit's model of helping portfolio companies grow through strategic support. A case study of one company, referred to as "Dynamite", shows its fundraising and increasing valuation from 2005 to 2011 when an IPO was filed.

1. Global
Venture,
Local
Capital
Nordic
Seed
Capital
Summit
Mikko
Suonenlah-
May
2011

2. DFJ
Esprit:
Who
We
Are
 Formed
in
2006
and
UK
HQ’d
we
have
grown
to
$1
billion
of
VC
funds
 Have
invested
in
over
200
European
high
growth
technology
companies
 European
associate
of
top
Eer
Silicon
Valley
VC
firm
Draper
Fisher
Jurvetson
(DFJ)
 Investments
include
CSR,
Lovefilm,
The
Cloud,
Skype,
Tesla,
Hotmail
 AcEvely
invesEng
new
funds
–
across
all
tech
sectors,
$1m
-­‐
$30m
rounds
 13
European
partners
based
in
London,
Dublin,
Cambridge,
Helsinki
and
Paris
 DFJ
manages
$6
billion+
VC
globally
across
USA,
China,
India,
Brazil,
Israel,
Korea,
Russia
We
invest
in
and
help
start-­‐ups
who
want
to
change
the
world
and
become
global
leaders
2

3. The
Good
News
about
VC
in
Europe
 Never
been
cheaper
to
start
a
company!
 The
Angel
market
has
grown
up
in
Europe!
 Move
back
to
early
stage
from
successful
VC’s
 Lots
of
noise
–
a
difficult
market
to
understand
but
we
believe
it
is
successful
and
can
be
scaled
up
for
more
growth
3

4. The
VC
model
 A
fund
invests
in
a
por^olio
of
20-­‐30
high
growth
companies
across
stages
 Companies
are
generally
loss
making
and
have
no
access
to
debt
 Companies
are
typically
creaEng
new
markets
and
much
of
the
spend
is
on
quality
jobs
(engineers,
salespeople,
management)
 Many
don’t
succeed,
the
winners
pay
for
the
losers
and
an
overall
return
is
generated
 1/3rd
return
5x
or
more,
1/3rd
return
1x,
1/3rd
return
nothing
=
Net
a
2x
return
aeer
fees
4

5. Europe
matches
the
US
for
successful
exit
values
at
around
$400M
...
Average Exit Cap ($ 100M+ Exits)
US$ million
Source: Dow Jones VentureSource

6. Large
($100M+)
exits
in
Europe
for
VCs
reached
about
1/3rd
of
US
level
Number of $ 100M+ Exits Over Time in US and Europe USA
Europe
• Volume
is
c.100
per
year
in
US
in
normal
markets
(95-­‐98,
04-­‐07),
drops
to
50
per
year
in
poor
years,
avg.
• Avg.
major
exits
running
at
33
a
year
in
Europe
for
5
years
pre
crash
• Since
US
VC-­‐industry
invests
5
Emes
more
on
average,
more
$
100m+
exits
per
VC
invested
in
Europe
• USA
has
already
rebounded
–
Europe
is
starEng
to
in
2011
Source: VentureSource, DFJ Esprit analysis

7. The
Model
Works
 100
major
exits
x
$400m
=
$40
billion
of
value
created
each
year
 Assume
70%
to
VCs
suggests
returns
of
$32
billion
USA
 Over
2004-­‐2008
the
VC
market
grew
to
$32b
per
annum
=
no
return
 Now
rightsizing
at
$16b
per
year
=
generaEng
a
2x
return
 33
major
exits
x
$400m
=
$13
billion
Europe
 Assume
70%
to
VCs
suggests
returns
of
$10
billion
 Industry
can
support
$5
billion
per
annum
and
return
2x
 And
no
reason
why
Europe
can’t
grow
to
100
major
exits
a
year
-­‐>
investment
constrained
 (UK
could
be
50%
of
this)
7

8. The
4
Steps
to
the
Epiphany
Applicable
to
almost
every
business
and
business
model
The
Path
to
Disaster:
The
Product
Development
Model
The
Path
to
Epiphany:
The
Customer
Development
Model:
Customer
Discovery
Customer
Valida:on
Customer
Crea:on
Company
Building
8

9. How
do
we
help
our
companies
grow?
 DFJ
Partners
include
successful
serial
entrepreneurs,
operators,
marketers
and
financiers
 The
DFJ
Global
Network
“IntroducEons
to
anyone,
anywhere
at
anyEme”
 We
are
here
to:
 Help
you
hire
senior
execs
and
a
board
 Make
strategic
decisions
regarding
the
direcEon
of
the
company
 Introduce
you
to
new
customers
and
partners
 Help
maximise
the
value
of
your
company
9

10. DFJ
Case
Study

11. Building
Tech
Businesses
–
Case
“Dynamite”
2005
2006
2007
2008
2009
2010
2011
€ Raised
2.3
2.9
16.8
17.5
16.6
S-­‐1
filed
13
May
€ Post
money
valua-on
16.6
58.2
87.3
170
€ Revenue
0.1
1.8
6.8
15.9
32*
Source:
Venture
Source,
*NY
Times
11

12. Ques-ons?
12