Investment Round Flashcards
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What experience do you have with raising finance?
Limited with investors. Within the team we have sufficient expertise in various forms of funding i.e. subsidies, partner contributions, large donations and SMEs financing in the Dutch market, both in debt and equity. So far we have funded the company with appr. € 10 million without sacrificing any equity. We know we need help from corporate finance experts who do this work on a daily basis.
How many previous investors will participate in this round?
None; there are no investors up till now.
How are your current shareholders supporting this round?
Two of the founders, currently dormant shareholders, help us by giving up part of their stake in the company on very favourable terms. To make us investible. The remaining two founders, active shareholders and personnel do not have the means to co-invest for the grant.
On which terms have they invested in your company?
The active shareholders (Maxim/Marko) provided nominal capital and invested blood, sweat & tears. The dormant shareholders jointly provided a loan facility of € 500k (of which € 25k was drawn).
Which VCs are you talking to? Are they willing to match the X and the valuation you are aiming for?
We have a dual strategy:
1) We are talking to our partners to create a consortium for future funding (currently Airborne – producers of equipment, ArcelorMittal – steel producer).
2) For this round of co-financing, we are talking to various parties a.o. Katapult Ocean and, Damen Ventures Furthermore we are talking to IQ, a regional investor an we have reached on oral agreement for a € 0.5 million
We are confident we will eventually find investors, provided we reach the first client contract.
What is your exit goal? (i.e. IPO, M&A)
The goal is to make this deeptech company go global, because we believe that this innovation can make a difference in the energy transition. Any exit goal should align with that goal. Both an IPO and an acquisition are possible as well as a strategic joint venture.
What is your expected time frame for this?
We expect interest to rise from our market entry in 2030. That point in time, i.e. when our success is visible, will bring the moment closer that strategic investors (corporates) decide they want to acquire us.
Who do you imagine will help you exit?
A global M&A or corporate finance firm (Big Four or similar) in combination with an international law firm.
How much is your pre-money valuation?
Based on the the VC method: EBITDA 150M x 7 multiple = ~ € 1,000M/ 10x = € 100M post money minus € 30-35M capital to be raised = 65-70M pre-money valuation.
We estimate the replacement cost to be around € 20-25M.
Bandwith will be around 25M to 65M
What was the valuation in the last round?
Not applicable, no prior round.
How are you determining current valuation?
Somewhere between €20-25M and € 65M: 1) the replacement cost (i.e. re-develop at higher costs) are estimated at appr. € 20-25M; and 2) the VC method: EBITDA 150M x 7 multiple = ~ € 1,000M/ 10x = € 100M post money minus € 35M capital to be raised = € 65M pre-money valuation.
How did you calculate your market size of X€?
Based on the TAM/SAM/SOM, as pointed out in the presentation on market data and a focus solely on the offshore wind market in the EU.
How much are you trying to raise now?
A minimum of € 1.1 million for co-financing of the EIC grant.
When do you expect you will be conducting a follow up round of fundraising?
End of 2026, beginning of 2027.
How else do you hope an investor will help beyond money?
Facilitate market entry, experience in manufacturing scale-up, company scale-up and opening up the network to further raise capital.
Do you have LOI’s from any investors for the next investment round?
No, not yet. We do have a pre-term sheet with Innovation Quarter to match at least € 0.5 million if we are able to find a lead commercial investor.
Eigen vraag: hoe veel zijn we waard?
Somewhere between €20-25M and € 65M: 1) the replacement cost (i.e. re-develop at higher costs) are estimated at appr. € 20-25M; and 2) the VC method: EBITDA 150M x 7 multiple = ~ € 1,000M/ 10x = € 100M post money minus € 35M capital to be raised = € 65M pre-money valuation.
Why doesn’t a private investor fund this, if it’s so great?
The timing and risk profile (both the technical and financial risk) does not match most funds. We have sufficient interest, however we need a signed contract; to get there we need EIC to achieve A-level certification and an industrialised production process.
What do private investors want to see before they will invest?
A signed contract with a customer for which we need certified technology, adequate production volumes.
What proof do you have that you can get the co-financing for the subsidy + investments?
So far we have been able to raise € 1.6 million in co-financing of R&D projects with partners. We are also talking to them for funding in the next phases.
Verdieping:
If we obtain a signed customer contract that will facilitate our efforts towards sustainable commercial success. We need to find the right fit with our future investors. We expect co-funding of € 15 million through the EIB in the next phase to be very helpful in that.
Who are the current shareholders? How is the cap table divided?
We are fully owned by founders (89%) and employees (11%).
How do you expect the division of charges to change after the next investment?
Active shareholders will hold 20+20=40% of equity, inactive 5%, 20% is reserved to be held by our staff via an ESOP and 35% is reserved for investors.
What would your ideal investor bring to the table beyond capital?
Experience in scaling up hardware companies, access to clients in other markets.
How are you going to get the cofinancing?
We are confident we can get acquire the co-financing AFTER WE GET THE GRANT. Winning the EIC is a great token of confidence. We intend to arrange the cofinancing through several interested parties, through our strategic partners and climate tech venture funds.
Noem eens wat namen:
Damen Ventures, Arcellor Mittal, Airbone, AOC, Owen Cornings, and for VC: Katapult Ocean.
Why are you confident:
We already have a verbal confirmation for the first 500k and a lot of interested parties for the other 600k.
What about the 15million?
We intend to build a consortium with our strategic partners The co-funding from the EIC will also be a huge vote of confidence for them.
