Keep the bus going: putting the right people in the right position

Scaling up your business also means putting the right people in the right positions at the right time. It takes a strong team with different talents to translate vision into action and make the business expansion a success. Management succession is a top concern for scale-up executives, as they know that placing the right people in key positions can be crucial for a company.

People often compare the placement challenge with driving a bus. Think about it like this: The CEO of the company is the bus driver and the company is your bus. If you want to keep it going, you will have to decide where you’re going, how you’re getting there and who you will take with you.

Leaders who are bringing their company to the next level will start with ‘who’ instead of ‘where’. You will first need to take the right people on the bus, drop off the wrong people in the next stop and then fill the seats with the right persons. When you are facing a problem or opportunity, think first of ‘who can be the right person to take responsibility for this’ instead of ‘what should we do’.

Here are some lessons learned from entrepreneurs on placing the right people in the right positions:

1.     When scaling up, rethink your original team
The skills you need to start the business are not the skills you need to scale a business. Simply put, when your company is growing, it is important to review your current team and see whether they possess the right skills to grow the business. This does not necessarily mean you will fire them, but it means you need to rethink their skills and place them in other positions where they can be great.

2.     Hire people who are better than you
Get people on board who take full ownership of their roles and are focused on the company’s success. Choose talent that is complementing your skills or the skills of the team they will be working with.
Patrick Drake, co-founder of service HelloFresh says: “You’ve got to have the confidence to hire people who are as good, or better, than you. Some will hire below them to avoid being shown up or usurped – but doing that will be the death of your company.”

3.     Highlight your company culture when getting new hires
Finding employees who embody the company’s values is crucial in cultivating the company culture. Many still think that previous work experience and capabilities are all that matter when you’re hiring new employees, but culture fit is a very important factor. Employees who do not fit with the company culture, tend to exert less effort and can even demotivate the entire project team.
When the organizational fit is strong, you will have employees who motivate their co-workers, people who are more likely to stick around and some great brand ambassadors.
Your customers will also notice this and remember: happy employees make happy customers.

4.     Invest in the continuous learning experience
Employees cannot excel if their positions do not suit them. No matter how talented they are, if they cannot leverage their personal skills and attributions, they will never meet your company’s targets.
Still, even if the right persons have been hired, it is important to recognize that skills need to change over time as well. Employees who aren’t stimulated to continually learn more may feel that the right role has become the wrong fit.
Especially for millennials, the “ability to learn and progress” is very important to help them feel fulfilled. Manpower Group mentioned in their ‘Millennial careers: 2020 vision’ paper that 4 out of 5 individuals look at the opportunity to learn new skills when considering a new job opportunity. Glassdoor also revealed that 42% of their millennial respondents indicated that they would most likely leave a company if they are not learning fast enough. This is especially relevant to consider in a scale-up, as likely most of your employees will come from this age group.

 

How can an ecosystem help

A dynamic talent marketplace can not only help in the hiring process, but it can also be used to identify the internal talents of a company and see if there’s a real fit between the persons and the positions.

Together with B-Hive, Scale-Ups.eu is using TalentBuzz: a digital talent marketplace that uses state-of-the-art AI technology for cross-language competence analysis and skill-to-job matchmaking. It combines hard skill matching with soft skill tests (e-assessments, digital skills, personality skills and a fit for the future test) to easily assess whether a candidate or employee fits the position. TalentBuzz will be used at SuperNova to connect high potentials with the exhibiting tech companies. 

Another thing that can help in the talent challenge is getting useful insights and tips from experts in the field. Scale-Ups.eu is hosting its second meetup on May 31st and welcomes the following panel members to share their thoughts on talent:

The panel is moderated by Vincent Stevens, Partner at Headlight

Our meetup on talent is a members’ only event. Want to join? Become a member here

SuperNova: Get a glimpse of what you can expect

In case you missed the noise about SuperNova, here’s a time-squeezing summary of what to expect:

Speakers  

From Artificial Intelligence to 3D printing, we are excited to welcome a solid line-up of thought leaders on stage with a broad range of expertise

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Exhibitors

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The SuperNova Tech Fair aims to showcase more than 60 game-changing Belgian companies that are at the forefront of disrupting traditional industries - ranging from large industry leaders such as Barco (with its expertise in advanced visualization and sound solutions) and imec (world-class leader in nanoelectronics) to disruptive Belgian newcomers such as Teamleader, Robovision, and Showpad.

 

Do you also want to showcase your solution in one of our nine hot tech clusters?
Get in touch with us to become an exhibitor

 

Partners

We’re overwhelmed by the support of a wide range of partners that joined forces with SuperNova

 
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What else can you expect at SuperNova?

 SuperNova will be hosted at several locations at Het Eilandje in Antwerp on September 27-30. The SuperNova Professional Summit will take place on 27-28th of September (ticket is required) and the Public SuperNova Festival will take place on 29-30th of September.

Discover the three other tracks:

  • Investor Pitching: Meet 55 high-growth companies who are looking for series B/C round during the pitching track
  • TalentBuzz: Score your next job at SuperNova through TalentBuzz, the dynamic talent matchmaking marketplace, powered by B-Hive. CV submissions will start soon.
  • Expedition: Discover the ‘life of tomorrow’ in various themes ranging from work, food, mobility, health and retail.

Role of Scale-Ups.eu

 Scale-Ups.eu and FlandersDC are combining forces as co-organizers of SuperNova to bring the biggest tech festival to Belgium. With a strong conference line-up already in place, we’re working hard to confirm the 55 European scale-ups that will pitch at the Investor Pitching and to bring the most innovative scale-ups and exhibitors to Belgium.

We’re embracing to meet you at SuperNova. Buy your tickets here

 

Time reduction series: Going International

Companies that are looking to scale can either grow their market share in their home country or go international to open up new revenue sources. Regardless of the geographical size of your home market, international expansion is a crucial step for companies to take their firms to the next level.  But what is the best way to make the big jump to foreign markets and conquer them? In this third part of our time reduction series, we discuss “going international” and tackle the following questions: what are the critical things to watch out for and how can being part of an ecosystem help you out?

Going international as a challenge

When exploring a foreign market, one often sees the following pattern unfold: a scale-up rents out a foreign office and sends some of their brightest and trusted employees over on a short-term basis. These “pioneers” are responsible for assembling a team of talented local people to conquer the new market. Unfortunately, it doesn’t always work out this way, nor is it the most efficient process. The decision to ‘build’ an own office may not always be the best idea, as a lot of cash will be burned before the new office can attract customers and operate at break-even. The Harvard Business Review reported in 2015 that companies expanding their business abroad, had on average ROA (Return of Assets) of minimum 1%, five years after their initial move.

Engaging the first clients might take months, purely because of a lack of local networks and a well-positioned brand. Moreover, as the pioneers are likely unfamiliar with the local culture, having to optimize the newly assembled local team and having to define the perfect market approach - which will need a lot of adjustments - leads to a significant competitive disadvantage versus their competitors, who are already active in the market.

While local pioneering might seem logical to some extent, does your company have the strong management capabilities and deep pockets to guarantee overseas success using trial and error to position your company in the market? It will inevitably be a time- and cash-consuming process with an unclear outcome, and anyone operating under tight budgets should be wary.

A closer look into the challenge

According to the Scaleup Institute, UK scale-ups that expand internationally have to overcome two main challenges:

25% reported that finding the right talent is an essential challenge to overcome to generate foreign revenues successfully, while 24% state that access to customers and business partners is an equally important barrier to overcome.

As these elements are fundamental/essential to grow a business abroad, companies might want to explore other alternatives versus building a new company from scratch and losing time.

One interesting alternative to expand your business abroad is to take over a firm that is already active in the target country. Ideally, it should be relatively small, so acquisition is feasible. Other criteria to look at include: an established client portfolio and a good brand reputation in relevant business circles and the market in general. This way, you can use the target’s proven foundations/fundamentals for further growth, by adding your knowledge, funding or other unique selling propositions. Another quick win might be to acquire a company with a product or service range, complementary to your own so you can not only accelerate your go-to-market in the new country, but also sell the acquired products or services in your current market.

Next to these market advantages, an acquisition avoids the difficult route of finding and integrating the right talent, which remains to be a major pitfall for most companies. The cross-fertilization between local workers (that provide key insights into the new culture and market) and expats from your own company (that provide the best understanding of your own company, products and DNA)  might prove to be the ideal blend for success.  While this might seem an attractive route, finding the right target(s) will be the first hurdle to undertake.

The second obstacle for most scale-ups is cash. Some companies simply just do not have access to ample debt financing to fund strategic acquisitions. One solution is to pay for the target company with your company’s shares. This will create an incentive for the owners of the acquired firm to help create value for the consolidated group. A well-balanced evaluation will have to be made considering the added value of the new owners to your company, since such a deal will dilute your own stake. Should this not be desirable, other ways of strategic cooperation like joint ventures may offer the right balance to move ahead.

In any case, a buy-strategy (as an alternative to a build-strategy) will require sound planning and execution - including target identification, negotiation and due diligence - but will enable your company to grow faster and more successful, by reducing the time of go-to-market abroad by six to twelve months. In the global game of scale-ups, home advantage may be essential, but so is time-to-market.

Tapping into the ecosystem

Thinking of your international expansion strategy? An ecosystem like Scale-Ups.eu can not only help connect you with other entrepreneurs who have successfully tackled this challenge, it can also help connect you with VCs ready to fund your growth.

Discover our services for scale-ups

Scale-Ups.eu Community Update - April 2018

As one of our goals for Scale-Ups.eu is to build and grow a vibrant ecosystem, we’d like to share with you the latest news in our community. We're planning on doing this monthly - so don't hesitate to share with us your news, updates and achievements!

 

Member Update

Our members are growing their business and scaling up.

Our Dutch member CM.com acquired EventsIT (specialist in sports tickets) and is strengthening their position in the sports industry

Aproplan partners up with Besix Netherlands as its construction project management software platform and provider for all projects to guarantee safety and product quality processes

Trendminer teams up with Capula. Together they can deliver more innovative solutions in the energy, water and chemicals industries where customers can use their sensors generated production data to easily uncover efficiency improvements to enhance overall profitability

imec celebrated their 100M after work party, meaning: All imec.istart businesses combined have raised the magic ‘100 million euro’ in funding.

We are proud of the very own scale-ups in our network for contributing to this awesome success: DatacampOntoforce and Piesync


Partner Update

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We’re excited to have our partners on board the Scale-Ups.eu network who share our passion for accelerating the growth of scale-ups!

They will will play an active role in SuperNova by sharing their expertise, their network and showcasing their solutions.


VC Update


Access to funding is the first step in squeezing time when scaling up.
In line with this, we are organizing the SuperNova Investor Pitching giving 100+ global VCs and investors the opportunity to boost their deal flow with scale-ups that are ready for their next round of funding.

Aside from our selecting VCs, we are proud to have the full support of the following investors for SuperNova:

 

Calling all scale-ups. Are you interested in showcasing your company & vision at the SuperNova Investor Pitching track?
Apply for the pre-selections now!


Community Meetup

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Once companies scale and expand, the need to attract and keep the right talent becomes increasingly more important.

Join us for our next meetup on May 31 focusing on “How to Put the Right People in the Right Position.”

 

We have invited a handful of experts to share their insights & lessons learned on talent:

 -      Conny Hooghe – HR Director Materialise
-       Karine Vandenberghe – HR Director De Persgroep
-       David Du Pré – Director EMEA Secure Code Warrior and Ex-VP EMEA/Sales Showpad
-       Vincent Stevens – Partner Headlight

Not a member and would like to join our meetups? Join our community now

 

We'd love to know more about your achievements and news, so we can share it with our growing community.

Scale-Ups.eu Community Update - March 2018

As one of our goals for Scale-Ups.eu is to build and grow a vibrant ecosystem, we’d like to share with you the latest news in our community. We're planning on doing this monthly - so don't hesitate to share with us your news, updates and achievements!

 

Member Update

Our scale-up community is growing – now with 43 members!

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The three most active domains in our community are: FinTech (30%), DataTech (23%) and MarTech (19%).

39 of our member companies focus on a B2B market.

40% of our members have an employee headcount above 50.

We are curious to see how these numbers will transform as you realize your growth & expand our community!

 

Big welcome to MCS - a technology firm focused on integrated software solutions in real estate, facility and workplace management for large private or public organizations.


VC Update

Our VC network is expanding. We are proud to have the support of the following VCs who are attending SuperNova and co-curating the final selection of the 55 European pitching scale-ups:

Calling all scale-ups. Are you interested in showcasing your company & vision at the SuperNova Investor Pitching track?
Apply for the pre-selections now!


Community Meetup

 Left to right: Matthias Vandepitte (Fortino), Bart Luyten (Smartfin Capital) and Frank Maene (Volta Ventures)

Left to right: Matthias Vandepitte (Fortino), Bart Luyten (Smartfin Capital) and Frank Maene (Volta Ventures)

On Tuesday March 27th, Scale-Ups.eu organized its first meetup of the year in the Ampla House in Ghent.

The panel discussion focused on “The Perfect Pitch for Series A and B Funding” and three of our VC partners enlightened the crowd with fresh & useful insights on how to score capital financing.

Here are our most important lessons learned:

When a company is ready to start the fundraising process, take time reduction into account. Matthias Vandepitte says, “Don’t waste your time on having too many meetings and attending a lot of conferences. You need to be focused and only go out when your data is ready”

VCs are only spending time on companies that they are truly interested in. It is important for a company looking for funding to have a good understanding of the industry, as well as strong knowledge of hard facts and KPIs.

Financials matter. You better make sure that as a CEO that you know your overall statistics (like ARR and converging ratios) and that your cap table is clean - meaning you don’t give away your shares to too many persons!

Investors also look at the team. Bart Luyten said, “I’m allergic to companies who do not treat their early investors right”.  Frank Maene extends the importance of a strong team even further: “When you invest in a company, you invest in the team so you need to be sure about everyone”.

Check out the pictures of this meetup here

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Want to know more about how you put the right people in the right place? Join our next meetup (for members only) on May 31st.  
Want to be part of our future meetups? Join our community now

 

 

We'd love to know more about your achievements and news, so we can share it with our growing community.

SuperNova: the conference where tomorrow is unstoppable

Scale-Ups.eu and FlandersDC are joining forces to ambitiously organize the biggest tech event of the year in Belgium: SuperNova. We are bringing together the most promising European tech scale-ups, game-changers of the tech industry, and thought leaders in this one-of-a-kind event held in Antwerp.

The conference will take place from September 27 to 30 in the Eilandje area of Antwerp where professionals can discover inspiring speakers, fellow entrepreneurs, the newest technologies and potential talent to grow their businesses. During the weekend, the festival will be free and open to everyone.

For all entrepreneurs, investors and tech enthusiasts, there are five tracks at SuperNova that you can explore:

  • Conference
    Get insights on the technologies of tomorrow and business concepts from thought leaders
  • Investor Pitching
    Listen to the pitches of 55 most promising European scale-ups (Open for investors only)
  • Tech Fair
    Discover tomorrow’s tech solutions
  • Expedition
    Get a taste of the life of tomorrow with our creative and interactive installations
  • Talent Matcher
    Meet your future employer/employee through a talent matchmaking platform (Together with B-Hive)
 

The role of Scale-Ups.eu

As a co-organizer of SuperNova, we’re shaping this event with the time squeezing aspect in mind.

Reducing time is the essence of entrepreneurship. SuperNova squeezes time for both scale-ups and VCs by connecting them for four days. As a result, we at Scale-Ups.eu help accelerate the growth of their company or portfolio. – Founder Jürgen Ingels

 

Apart from working towards the overall success of this big event, we’re also fully in charge of the Investor Pitching Track where we bring the 55 most promising European tech scale-ups together with +150 deep pocket VCs.  The following curating VCs have already confirmed in attending SuperNova: Columbia Lake Partners, Fortino Capital, HPE Growth Capital, ID Invest Partners, Prime Ventures, Runa Capital, Smartfin Capital and Volta Ventures.

We are also selecting the 55 SuperNova pitching scale-ups based on a proven growth criteria. Qualified scale-ups can easily schedule private 1-on-1 meetings with deep pocket VCs and potentially score their next funding round. Interested in pitching? 

 

Want to be part of this revolution? Get your ticket now!

 

 

 

A Closer Look at the Belgian VC Landscape

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In 2017, venture capital investment has reached record highs with a total investment of $84.2B in the US and EUR 19.2B in Europe. Clearly, there was no shortage of funding in 2017 and venture capital investment worldwide is soaring.

Looking at Belgium, VC investment grew from €244M to €288M in 2016-2017. Yet, while VC funding in Belgium is growing, the numbers compared to neighboring countries are in a different league altogether. One can easily argue that this is due to the size of the country, as Belgium is one of the smallest countries in Europe. Yet, the per capita numbers show a more fundamental difference. Belgian VC funds invested a lower per capita amount than all of its neighbors, except Luxembourg. This indicates that there is a lot of room for growth when it comes to Belgian venture capital funds and the broader VC ecosystem.

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The smaller size of Belgian VC investments certainly is not caused by a lack of quality companies. In recent years, Belgium has been home to a substantial amount of successful tech scale-ups such as Collibra and Showpad, to name a few.

  • At the end of 2017, Collibra raised $58M in a series D round investment led by some of Silicon Valley’s most influential investment funds, such as Iconiq Capital (the fund that handles part of Mark Zuckerberg’s money) and Battery Ventures. To date, Collibra has raised over $130M.
  •  Showpad, which was recently chosen as one of Microsoft’s new software partners, raised $25M of series C funding from Insight Venture Capital at the beginning of 2018. It had previously raised more than $50M in 2016.

In short, Belgian scale-ups are on the rise, but we can also observe another trend: the marriage between Belgian scale-ups and Belgian VC funds is limited to earlier rounds. For later investment rounds, when scale-ups reach a certain size and bigger investments are needed, firms go to the UK or the US for additional growth funding.

What is the reason behind this phenomenon and how can we manage to anchor our scale-ups in Belgium? There are three prominent reasons why this is the case:

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First of all, Belgium doesn’t have any big venture capital funds. As the Belgian Minister of Finance Johan Van Overtveldt recently stated, there is enough capital, but it is fragmented over a large number of different funds. As Belgian funds are smaller, investing a substantial amount of money in a single investment round is riskier, and this is why Belgian funds are mostly absent in later investment rounds of €15M-€50M. This causes Belgian scale-ups to look for funding in other countries, mostly the US. An important trend in this regard is that the number of individual rounds in Europe and Belgium is falling, while investment amount per round is increasing.

A second reason for this phenomenon is the fact that Belgium is a small home market. In order to truly grow to the next level, international expansion, especially in the US, is critical. When the activities of Belgian companies in the US grow and they have genuine star potential, naturally they will attract the attention of bigger American VCs. Another advantage that comes with the capital raised from American funds is that when growing in the US, the name recognition of a big American VC fund and its successful portfolio companies might give the company an extra push. The companies in the fund’s portfolio also often serve as a valuable network. Also, companies typically need growth capital in their early stages, when they have a scale of about 50 employees. This of course makes those companies more flexible to move to the country from where they get their funding. This has a big impact on Belgian employment because not only are the jobs at the company itself lost, the loss of companies’ headquarters also has an impact on the market of service providing companies.

A third reason for the loss of Belgian companies is the fact that Belgium lacks second generation entrepreneurs, that have successfully founded and sold their companies. While there are a few, such as Marc Coucke, Jurgen Ingels, Bart Verhaeghe and others, the presence of a substantial core of second generation entrepreneurs is vital for the creation of a true scale-up ecosystem.

Belgium thus faces the important task of keeping promising scale-ups in their local home base, while providing them with enough capital in later rounds to grow and expand internationally. In this respect, there have been important efforts made by the Belgian government, which has revealed plans to create a ‘fund of funds’. This fund of about €400M will be used to strengthen existing VC funds, and will give them the additional firepower to support scale-ups in bigger investment rounds. Further efforts have been made by some of Belgium’s well-known tech ambassadors, as Jurgen Ingels and Duco Sickinghe both set up investment funds that focus specifically on later investment rounds (SmartFin Capital and Fortino Capital respectively).

Scale-ups do not only need capital to grow, they also need a network to boost their growth process and to squeeze time. Scale-Ups.eu is a newly set-up platform that brings together scale-ups, investors and industry experts. With efforts from the government and private initiatives, like Scale-Ups.eu, it looks like the Belgian investment world is turning the tide. It’s the perfect time for Belgian scale-ups to grab these new opportunities and, who knows, maybe Belgium will have its first ‘unicorn’ soon?

After its official launch in January, Scale-Ups.eu is organizing the first of a series of meetups: The Perfect Pitch for Series A and B Funding on Tuesday, March 27. In this first meetup, some of our selecting VC partners (Fortino Capital, Smartfin Capital and Volta Ventures) will share their insights on what they’re looking for in the perfect pitch. Further down the line in September 2018, SuperNova will put the spotlight on 55 selected European scale-ups, giving them an opportunity to pitch in front of international investors. This scale-up conference will truly put Belgium on the VC map, and will make sure it gets rid of its reputation as a no-fly zone.

SOURCES: Dealroom, Pitchbook, De Tijd, Trends, Datanews

Author: Philippe Olivier

Scale-Ups.eu Community Update - February 2018

As one of our goals at Scale-Ups.eu is to build and grow a vibrant community, we’d like to share with you the latest news in our community. We're planning on doing this monthly - so don't hesitate to share with us your news, updates and achievements! 

 

Member Update

Welcome to the newest scale-ups on board Scale-Ups.eu:

Beeple is a web-based employee scheduling platform suitable for businesses of almost any size or vertical, including HR & employment, catering, events and festivals, guides, cleaning, aviation, sport competitions, security, car parks and call centers.

Ontoforce's mission is to effortlessly extract “information” from public, third party and private big data and present them in a way they can be easily interpreted and used to support smart decisions. Because more data means more insights, more innovation and, ultimately, more patients being helped. Congratulations for closing a round of 4.3 Million!

VAVATO is a high-end, online auction house specializing in industrial goods, overstock and insolvency goods.

Yuki's mission is to make the cooperation between entrepreneur and accountant stronger via an online accounting platform.


VC Update

Scale-Ups.eu believes in easy access to funding as a critical factor for continued growth.

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As part of SuperNova, we aim to organize the biggest scale-up event in Europe. This two-day investor track gives VCs the opportunity to meet 55 promising tech scale-ups from all over Europe. 

On the 23th of February, we selected the first 15 out of 55 scale-ups that will take the stage at SuperNova. For the Benelux selection, we counted on Volta Ventures, Fortino Capital, Prime Ventures & SmartFin Capital to nominate the best 15 scale-ups in the region.


Community Meetup

Open only for Scale-Ups.eu executives.

Do not forget to subscribe for our first Meetup and get to know all about “The Perfect Pitch for Series A and B Funding.“

We invited Jurgen Ingels, Founding Partner at SmartFin Capital; Frank Maene, Managing Partner at Volta Ventures & Matthias Vandepitte, Partner at Fortino.  Pick the noses of our panel and get to know all about their pitch secrets. 

Not yet a member of Scale-Ups.eu? Join our community now

 

We'd love to know more about your achievements and news, so we can share it with our growing community.

Time reduction series: Raising Capital

Most people think that scale-ups require less funding than startups to grow. In reality, having consistent access to funding is still an important factor for sustainable growth. By having adequate access to growth financing, a company is more equipped to scale internationally and attract high-quality talent. This second blog on time reduction is focused on how to get the necessary funding to bring your company to the next level.

Funding as a challenge

Many startups and scale-ups ask when the best time is to go fundraising. Eugene Kleiner, a top-tier VC from Silicon Valley, said it best: “The time to eat the hors d’oeuvres is when they’re being passed around.” Simply put: The best time to go fundraising is when you do not need the money at all.

Each round is meant to address a specific challenge that scale-ups need to conquer, in order to convince the investor(s) to provide capital:

·       Series A: What vision do I want to sell? Is my product/service market addressable?

·       Series B: What results have I achieved? How does my growth path look like?

·       Series C: How can I accelerate my growth path from the series B round? How can I bring my company across the ocean?

As the second round really focuses on scaling, many consider this the hardest round to raise. Companies at this stage are already marked by their proven value to the market, therefore the pressure is higher than ever to deliver real proof points. Not only are investors expecting revenues, they are also looking for concrete plans on how the company is planning to reach its milestones. When you are going for a Series B funding, it helps to come with solid references and a strong understanding of the competitive landscape to prove that you have a viable, scalable product. It is also important to demonstrate your business model, so the VC can see how the capital boost can lead to profitable growth.

A closer look into the challenge

Getting to investors is not always easy, especially if you’re aiming for the big ones that have a larger financial backing.

In our portfolio alone, our members raised approximately €250M in total, €85M of which they had raised only in 2017. The top three companies who got the largest funding are: Collibra (+€70M), NGData (+€45M) and Sparkcentral (+€37M), and they account for 62% of the total raised capital.  Additionally, Index Ventures – one of our VC partners – has invested the most in our Scale-Ups.eu members with an estimation of €25M.

We also spoke with Luc Burgelman, CEO of NGData, who just closed his series C-round of €16 M in December 2017 with Holland Private Equity (HPE). Sometimes people think that raising a big round is much harder than raising a small amount. But actually, the opposite is true. When raising a bigger amount, a company mostly has accomplished several milestones already. At that point, there is a track record and a more predictable future. That allows funds to make a better risk assessment of the opportunity and thus, makes it easier to make an investment decision for a larger ticket”.

Nevertheless, Luc states that no funding round is easy and every round has its own challenges.

One of his best time-reducing tip for scale-ups is to always keep an ongoing relationship with several investment companies outside your current investor base. If you are then at that point to raise money again, you can really speed up the process with your network. 

Tapping into the ecosystem for funding

An ecosystem that brings together VCs and scale-ups will definitely reduce time in the funding process, as there are not only plenty of opportunities to network with many VC’s at once, you also get the chance to learn about different funding types in our master classes and meetups.

The first Scale-Ups.eu Meetup will take place on March 27th where we’ll focus on the perfect pitch for Series A and B funding. In the panel, three of our selecting VCs (Fortino, Smartfin Capital and Volta Ventures) will discuss the key points that can make or break your pitch.

Scale-Ups.eu will also help speed up the funding process by organizing the first edition of SuperNova from September 27th-30th. This annual event will bring together European scale-ups and global VCs to explore mutual growth opportunities. Our VC partners will pre-select 50 hidden gems in Europe that will get the chance to pitch to a global network of VCs from Asia, Europe and United States. A pre-selections round in the Benelux will be held early 2018, where our VC partners in the region will get to select the 15 best scale-ups who will be present in the conference. There will also be a matchmaking tool that will enable scale-ups and VC connect directly at the conference, further enhancing the opportunities to explore business together.

Are you a member and looking to participate in our first Scale-Ups.eu meetup?

 

 

Scale-Ups.eu Officially Launches

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Together with its growing community of scale-ups, VCs and partners, Scale-Ups.eu is officially launched and is poised to become the top-of-mind time squeezer for scale-ups in Europe. Apart from bringing the community together for a toast to a successful 2018, Scale-Ups.eu announces its plans for the upcoming year at its Official Kick-Off event held with B-Hive on January 15.

Headquartered in Belgium, Scale-Ups.eu is a new platform that brings together scale-ups, investors and experts to become a European scale-up ecosystem that boosts growth for all. On top of being able to leverage big investments, the major advantage of a well-established ecosystem is having quick access to second-generation entrepreneurs who have proven experience in scaling and are able to shorten a growing company’s learning curve. Therefore, one cannot stress enough the importance of time reduction, as entrepreneurs and companies are more successful if they are capable to reduce or squeeze time.

Building a service structure that helps scale-ups in reducing time is without doubt a very important factor for a performant scale-up ecosystem. Hence, being a part of a multifunctional network that promotes continuous education and access to know-how and human capital are essential elements for this time reduction challenge. These needs only become bigger when companies are expanding and planning on entering new markets.
— Founder Jurgen Ingels

In its first year, Scale-Ups.eu will focus its efforts on SuperNova. Together with Flanders DC, we are organizing the biggest tech summit in Belgium on September 27-30 in Antwerp, where 55 selected European scale-ups will pitch their companies to international investors. These hidden gems will be selected by eight VC partners such as SmartFinCapital, Volta, Fortino, Runa Capital, idinvest, Prime Ventures, Columbia Lake Partners and Summit Partners. Apart from unlocking new funding opportunities for European scale-ups, SuperNova will be showcasing the best high-technology companies in its demo floor.

To support the growth needs of our scale-ups, we are also offering two programs. For Squeezer program, we are offering three modules of 2x2 days to help mature scale-ups reduce time, with topics including: People, Funding and Market Access. With ‘BEyond’, a program initiated by the Pulse Foundation, we offer an 18-month accelerator program to help scale-ups become world leaders in their field. Next to the programs, there will also be three Scale-Ups.eu meet-ups in 2018 with the following topics:

  • The Perfect Pitch for Series A and B Funding
  • Team Development, Putting the Right People in the Right Positions
  • How to Make Your Brand Internationally Attractive

 

Interested in joining our global scale-up network?

Time reduction series: Law on talent

Companies that apply the law of time reduction are able to accelerate the business plan and grow faster. The question is – how do you apply the law into your day-to-day business operations?

In this blog series, we dive into the law of time reduction applied to the significant challenges scale-ups face in hiring talent, raising capital and global expansion.

Talent as a challenge

According to the European Commission, 20% of all EU companies were employing ICT specialists in 2016. However, 41% of the companies state that they had a hard time finding the right person for their vacancies. As the European tech workforce is growing three times faster than the overall EU employment, the hunt for talent is becoming a real challenge.

Looking into the UK scale-up scene, 93% of the scale-ups report that their main roadblock for continued growth is access to talent. However, there are some challenges to face: 48% do not know where to find good talent and 38% do not have the right connections to universities. If they do find the right hire, the key required skills are critical thinking and a service-oriented mindset. Nevertheless, the UK still is the top talent magnet for tech, as they attracted 21,5% of all the international migrants.

In a recent State of European Tech Report by VC fund Atomico, companies have the most difficulties recruiting in the following categories: Software engineering (46%), Sales/Business development (14%) and Data science (9%).

State of European Tech Report

A closer look into the challenge

If you look closely into our community, there are over 250 open positions just only on our 30 member companies. This loosely translates to 8 job openings for every one company, with majority of the job openings in the field of development (37%) and sales (24%), followed by customer service (9%). This confirms the ‘cry for talent’ in our community and strengthens the choice that talent is one of the focuses of our service offerings.  

Zhong Yuan Xu, one of our ambassadors, confirms that most scale-ups are looking for similar profiles and are therefore fishing in the same talent pool. Creativity during the hiring process and original perks are the way forward to attract the best of the best.

Attracting (and keeping) millennials in general has become a real challenge for companies, as the new generation of the workforce seeks more than just a high-paying job. Manpower Group’s global research found that millennials value a strong career path with 93% of the respondents stating that lifelong learning matters to them the most . This means that scale-ups should constantly provide growth opportunities for their employees in the form of exciting projects, dynamic roles and international assignments.

Tapping into the ecosystem for potential talent

A well-established ecosystem has an important role to play in reducing time on scouting talent by linking the different stakeholders with each other to match the right profile with the right job.

Committed to helping scale-ups reduce time, Scale-Ups.eu will facilitate the matchmaking process through:

-        A job fair at our Scale-Ups.eu Conference 2018
-        Scale-up masterclasses to improve the skill set of current scale-up managers
-         Interactive job board that will automatically do the matchmaking between CVs and jobs
-        Multiple networking opportunities between promising talent and employers


Discover our full list of services:
https://www.scale-ups.eu/our-services/

 

Top 9 Changes Resulting from the Digital Transformation: Collaboration is Key

Companies in every industry and geographic location around the globe are well aware that technological innovation is a key strategic topic. Digital transformation disrupts traditional business models, pushing organizations to invest in new technologies, invent new business models and reorganize internal processes.

In technology, we have seen evolutions from perpetual business license in software towards ‘as a service’ models, a change from large capital investments in proprietary infrastructure toward cheaper and more transactional cloud models, a new ‘trial and error’ scrum based way of development and the increasing importance of open source software.

But digital transformation is much more than tools and processes. What is the impact toan organization’s culture and its human capital? There are important recent trends observed with respect to employee engagement, such as: 

1.    From working locally to working from anywhere in the world.

The new generation does not see the necessity to work from one office, close to their home. The new work culture requires companies to accept a mindset of working from anywhere, anytime. More flexibility will become the norm to plan tasks and the work agenda.

2.    From hiring for a lifetime career versus supporting the development of a career.

There is no longer an expectation or understanding that executives and employees are hired for a lifetime. Employees in the new generation tend to change jobs every few years; the notion of one job and one career in one life is passé. People need to continuously learn and develop new competences throughout their careers. They will do this in multiple environments, being confronted with innovative challenges in a much faster pace than before. Organizations that recognize this need for constant professional development will have greater success with retaining top talent.

3.    From developing skills overall to focusing on excellence in specific talent.

Given the globally competitive environment, excelling at one talent will become more and more important. From a development perspective, this means we need to abandon the notion of improving weaker competences and instead focus on fostering the existing strong talent of people.

4.    From ‘knowledge is power’ to ‘sharing knowledge is power’.

This mindset change does not imply all corporate secrets will be shared publicly. However, the idea of sharing knowledge leads to a branding of expertise of the company or individual. With the increased pace of information exchange, positive perceptionsof others have become a highly valuable asset. Companies and individuals who share their specialized expertise will become thought leaders and improve their brand.

5.    From serial careers toward parallel careers.

People will have more career paths at the same time. Working in a competence culture instead of a job culture will allow people to work for several employers or companies at the same time, gaining insights in a much faster way and developing broader, yet deeper, insights into the economy and within an industry.

6.    From failing as a stigma to failing as an acceptable developmental step.

This principle is already more common in the USA and will become more and more important in other countries as well. Failing at entrepreneurship will no longer create a stigma but will be seen as a natural path to successful entrepreneurship.

7.    From winning individually to winning as a team.

Effective teams are becoming the norm over the successful individual. The new generation is less focused on individual successes but more driven by team and project accomplishments. Individuals find personal success in their contributions to the team.

8.    From financial incentives to the motivation of experience.

Besides the team culture, the younger generation is not motivated by monetary incentives. Social media has highlighted the trend of choosing experiences, both in personaland professional life, over materialism and wealth. Corporate social responsibilityand work-life balance have become more important than financial remuneration.

9.    From patience to instant gratification.

E-tools, social media and online games have created an expectation of instant gratification. For companies, it will become increasingly important to realize that the next ecosystemof customers, employees and partners will expect a faster and more efficient response to their needs.

Summary

An important factor for organizations in this culture will be the passage into an era of greater time efficiency. To facilitate the more efficient use of time, we see the necessity for a collaborative mindset; this can be realized by having shared channels for professional development opportunities, events, and information flow to improve transparency and information exchange. This will shorten learning curves, give access to key decision makers much more quickly, allow easier access to international markets, and even facilitate hiring the right team members by stronger reference networks.

To summarize, digital transformation is shifting the landscape of employee engagement in fundamental ways, both personally and professionally. To respond to these changes, companies need to learn how to manage time and work as efficiently as possible. These transformations will inherently revolutionize workforce recruitment, onboarding, assimilation and retention. 

 

The Law of Time Reduction

What factors make a company or an entrepreneur successful? Most people would say money, a good team and a good product. A large addressable market is also an important aspect. However, there is another factor that is sometimes overlooked: TIME.Entrepreneurs and companies are more successful if they are capable of reducing or squeezing time.

How can you squeeze time? Time can be reduced because you are not subject to a learning curve or because you can achieve things quicker. Having access to entrepreneurs who have successfully done it before and can prevent you from making mistakes might save time. Getting faster to a decision maker in a company so that you can reduce the sales cycle might save time. Being able to find the right person for your team because you can tap into someone’s personal network and get a recommended person to join, could help you save time. Education could also help you in reducing time. There are hundred ways how you can reduce valuable time for your company and if you succeed in doing so, you can get things done in a faster, sometimes cheaper and better way, helping you to better compete with other companies.

Creating awareness, being part of a network, education and access to know-how are critical elements for this “time reduction challenge” and become even more relevant if the companies grow and if they start to compete at an international level. I call this “the law of time reduction”. Companies who apply this "law" are able to accelerate their business plan, they can count on solid financing advice and get faster connected with the right clients and partners. This way they can focus on what really counts, their product and related business.

A scale-up ecosystem

The time reducing challenge for our scale-up companies could be dealt with by setting up a structure that is tailored to the needs of these scale-up companies and specifically focuses on all aspects that can help our scale-up companies to reduce time. Eventually this structure will be the basis for a true scale-up ecosystem. 

Five years ago, we stood at the cradle of Startups.be in Belgium. This organization has more than proved its worth and brings together more than 120 organizations working for startups. Startups in Belgium are becoming more hip every minute, the framework has been improved and Startups.be has played a big role in this.

Today, Belgium does not have one single unicorn, a technology company with a market capitalization of more than 1 billion dollar. I am convinced that by applying “the law of time reduction” as a growth hormone, Belgian tech companies can become accelerated unicorns.

Let us therefore work together to provide such support and set up an organization which aims to help the companies in our young local ecosystem to reduce time. I am convinced that we will have a herd of unicorns within no time ...

Fundraising is like a mating process

A courtship display is a set of display behaviors in which an animal attempts to attract a mate and exhibit his desire to copulate. Many species of animals engage in some type of courtship display to attract a mate, such as ritualized movements (dancing), the creation of sounds and displays of beauty or strength. Often, males and females will perform synchronized or responsive courtship displays in a mutual fashion. Misreading the signals or not responding in an accurate way might mean that the possibilities to mate are gone…

Over the years in the course of my work with investors and entrepreneurs, it became clear to me that the fundraising process is very similar to this mating process. There are certain rules that need to be followed, certain steps that need to be taken into account and not understanding these signals or not responding to them in an accurate way might lead to no funding at all. Similar to the mating process you only get one shot. Therefore, I see fundraising as art. An art that can be learned…

I distinguish three periods in the fundraising process namely before, during and after the fundraising. Each period has its own specifics and understanding these technicalities will increase the odds of getting funded.

  • BEFORE

Before putting a lot of effort in the process you must ask yourself the question if you really need Venture Capital (VC) to grow your business. Of the fastest growing private companies in the US over the period 1997-2007 only 16 % has taken VC money. It proves that it is perfectly possible to grow a business without VC money and that raising VC money is not the only model for successfully building a major company.

If the answer is still yes, you need to realize that out of 100 pitches, 10 will get closer inspection and only one will get funding. Most companies do not qualify for venture capital and never will simply because the company is not in the preferred industry, does not have the right team or does not have enough potential. For me, the main question you have to ask yourself is this one: “Does my venture allow for growing gross margins over time?”. Not having growing gross margins over time does not mean the company is not interesting but that the model is simply not suited for VC money. Companies with growing gross margins over time can be found in the software industry or the biotech industry.

“Make sure somebody watches the shop while you are out fundraising”

Another point that is sometimes underestimated is the amount of time that raising venture capital consumes. The process will probably take 60 % of the CEO’s time, 60 % of the CFO’s time and 40 % of the CTO’s time and might take 6 to 9 months to complete. In the meanwhile, somebody has to run the company and make sure the sales numbers, operations and finances stay on track.

So make sure somebody watches the shop while you are out fundraising. I’ve seen plenty of companies, which did not take this into account and missed the numbers because of this lack of attention towards the business during this whole process. Something that is always paid the price for at the end of the fundraising process by means of a lower valuation.

Operational

Set up an audit committee, remuneration committee and exit committee and make sure you have minutes of these meetings. This will help you in showing that the company is well organized. Creating an exit committee is something every company should have. This committee follows competitors and describes potential buyers of the company. The best investment any company can do is buying a scanner. Collect scans of your key documents and organize them in a clear logical folder system. Provide on-line access to a VC during the due diligence. That way you can follow what the VC is doing and can track which documents he is examining. It will allow you to determine if the VC is seriously looking at your company (or not). That way the VC does not have to be physically present in your company and can’t ask annoying questions to your staff. 

Do not use your divorce lawyer who believes it is cool to do a VC deal and wants to learn from it. The contractual aspects of a VC deal are so specific that you really need an expert and somebody who is familiar with this type of contract. Having a lawyer that understands numbers is a surplus and not a luxury in this kind of deal. 

You do not need an investment banker to organize the fundraising process. As founder or entrepreneur you know way more about your company or your industry than the investment banker ever will. Besides, they ask between 4 to 7 % on the funds raised which is quite expensive.

Last but not least operational wise, creating buzz around your company by getting into the newspaper helps a lot. For some reason if your company is mentioned in a newspaper it creates credibility and people (including investment managers of VC funds) take your company more serious. Doing a market survey around your product and preparing a press release with fancy statistics helps you in achieving that goal. Moreover, the VC world is a very small world, in which everybody knows everybody. They all talk with each other at receptions. Getting into the buzz circle will fortify the talks about your company and will increase the overall interest.

VC funding

Manage your existing shareholders by asking them upfront what they would accept as conditions and let them sign off on these conditions. That way you will save time by not having to go back and forth between the potential VC and your existing shareholders. Make sure you are aware of your shareholders’ whereabouts during the fundraising period. Chasing a signature of a shareholder in the Bahamas might be problematic and increases the stress levels when it can be foreseen.

Remember that it is a red flag if you go for fundraising just before you are running out of cash. The best time to go out for fundraising is actually when you do not need the money.

“When a VC sees a large business plan he is less inclined to read it”

A lot of VC’s call companies to introduce themselves. Typical the people calling are young associates whose job it is to gather information and market intelligence about a certain industry. Although being called from a big US or UK VC might sound cool and might boost your ego, but do not respond to inbound inquiries from anyone but a partner. If your company is really interesting, the partner will take time to talk to you. All the other situations are for mere info gathering or market intelligence. 

It is much better to get introduced to a VC versus calling them yourself. Getting introduced increases your odds significantly. You always know somebody who is directly or indirectly linked with the partners of a VC fund. LinkedIn is a great tool to find out who is connected.

Business plan & Pitch

Don’t write out a full business plan. When a VC sees a large business plan he is less inclined to read it. If there is no executive summary, the plan goes in the dust bin. So stick to 15 slides. 

An important part is the preparation of your financials. Do not make a financial plan of more than 3 years. The world is changing so fast that 3 years is already an eternity. Spend time making an analytical profit and loss and a correct cash-flow statement. In most cases the cash flow statement is incorrect as people struggle with the concept of cash.

What is powerful is to construct an excel sheet that allows you to make all kind of permutations and see what the effect is on EBITDA and cash. That way you are able to simulate real time any situation the VC throws at you like lower revenue or higher costs. Practice your pitch…a lot. Test your 15 slides with friends, family and your mother in law. If she understands it then your pitch is on the right track and not too complicated. Also make use of the appendix. You can have 10 slides of nerdy graphs and technical stuff in the appendix that you can use to answer questions.

Make sure you study the numbers as CEO of your company. Prepare yourself by learning all the key numbers by heart so that you are able to respond immediately on raised questions without having to depend on your CFO to answer these questions. Questions like “what was your EBITDA 2 years ago or how much R&D is the company spending” should be common knowledge. 

  • DURING

Never send your full powerpoint or deck before you meet the VC. The best strategy is to send a three-page teaser upfront that does not contain all the information. Enough to spark the interest of the VC. Remember that it takes on average 20 powerpoint presentations to receive one term sheet. 

Test your pitch first with some low level VC’s so that by the time you get to the VC’s that really interests you, your story is crisp and sharp and you can anticipate most of their questions. Do not forget to continuously adapt your slides based on feedback from the VC. A deck should be a living document.

When you are in front of the VC, never read your slides and be authentic and passionate. Passion sells. Show energy and excitement. Do not sound desperate during the pitch and don not use jargon. Keep it as simple as possible. If you are planning to do a live demo, be sure you have tested the connection upfront.

“Never send your full powerpoint or deck before you meet the VC”

Discuss upfront who will tackle which questions during the pitch and prepare answers on possible questions and do not send somebody to replace you at the pitch. No, the excuse “our CEO is with a client” is not a credible one. Next to that make sure you do not go with an incomplete team to the market. Saying “key team members have committed to join us as soon as we get funded” is not the best move.

Never present alone. Go with your team and makes sure everybody speaks. I’ve seen a lot of pitches in which only the CEO speaks and the rest are bag carriers. Not good. Also if you have part time people in your core team do not present them. It gives bad points. Try to replace them with full time members. If that is not possible, acknowledge the weakness and develop a plan to resolve the issue. Also, be aware that the pitch is not the time to have big disagreements in the team. 

After the pitch, keep in touch with the VC. The trick is to be a pain without being a pest. Do a follow up and ask the VC what he thinks of the company. Use a tool to keep track of which documents you send to who and when. Too often companies send new numbers and are not ware what they have send before in previous versions. Keep in mind that most VC’s keep track of the plans and numbers they received in a database in case you would ever come back.

Remember that it is a red flag if you repeatedly push back the timeline of “closing the round” or change the “size of the round” every week.

The deal

Do not propose a valuation yourself but leave it to the VC. After all, they are the specialists. Say this regarding valuation expectation: “we obviously want a fair price but price isn’t the only consideration for us. We want an investor who helps us to move forward and brings added value to the table”. Keep in mind that a valuation that is too high might make raising money difficult in the future. A valuation that is too low possibly reduces the amount that can be raised.

Use an excel sheet that helps you understand the economics of the deal. That way you can quickly simulate any impact a dilution of warrants, SOP’s, earn-outs etc. can have.

Never give any kind of exclusivity. Negotiate with 2 VC’s until the very end and make sure they are aware of each other. That will keep them honest and avoid last minute changes or squeezes.

Don’t be obsessed by dilution nor by the pre-money valuation. Other terms have bigger effects on a deal like sales preferences or anti-dilution provisions. If you have to accept an anti-dilution, go for an average one. 

“Do not accept extra ordinary things in your shareholder agreement”

Ask for a 10 % stock option plan and make sure legally it remains like that going forward. In other words, you should always have the right to increase the SOP to 10 % after an acquisition or a capital increase. 

Avoid complex legal structures. It will make things more difficult in the future. Do not accept extra ordinary things in your shareholder agreement. You will not be able to get rid of them later.

Most VC’s take the existing shareholder’s agreement as basis and want the existing conditions as a minimum condition in the new shareholder’s agreement.

Try to go for a very detailed term sheet. It will make the process afterwards easier when you want to elaborate on the final legal documents as a lot of things are already covered in the term sheet.  

Avoid partial funding based on milestones. Partial funding leads to partial spending and not being able to achieve what you want.

  • AFTER

Once the VC’s are on board, make them work. Ask them to perform market research or analyze competitors. In most cases the investment managers of a fund have more time than you to do these kind of analyses and they are pretty good at it.

Send your cash position on a weekly basis and create a graph with all that data. Over time you will see how your cash-flow behaves. Make one reporting set for the VC’s and make sure to include weighted and unweighted sales pipeline. VC’s love these kind of statistics.

Finally, keep in mind that a VC relation is a long-term relation and life is too short so make sure you get along with the VC and don’t forget to have fun from time to time.