From pre-idea to post-IPO with DNB's startup & growth experts

What role does a bank play in the entrepreneurial ecosystem? Well, as it turns out, a pretty significant one. Since 2014 DNB has supported more than 20.000 startups on their startup journey. With programs like Founders, DNB NXT, 100 Pitches, digital health accelerators, startup coaches and growth mentors; DNB has developed probably the most robust startup support infrastructure amongst the traditional European banks (bravo, DNB!).

Earlier this week 25 of the bank’s ‘founder focused’ staff went through the Scale Up! (from idea to exit) Masterclass. Over 2 packed days and a very long night (for some of us), we took the bankers through every step of the Founder’s Journey.

Working in six teams, the 25 participants selected their (case) company and were off to the races. Over the following days (and night) the teams went through a truly immersive experience as startup founders on the Founder's journey.

DAY ONE

Early idea-stage (what are we doing, again??) The teams selected Company Cards covering healthcare (strong sector), cleantech, robotics, drone technology and subsea robotics (fish, not oil, btw).

Early strategy Aspirations, ambitions, business model and early customer profiles

Problem-solution fit, anyone?

Early burn rate Turns out, it is expensive to launch and scale a company these days

Startup pitches Just like in real life, got to pitch to impress

Early fundraising & term sheets Just like in real-life, things start nice and easy, only to expand and extend into complex term sheets, liquidation preference, board seats and reverse vesting schemes

Early cap table math and cap table management Pre-money, post-money, SAFE conversion, advisor equity, option program; participants got a chance? to dive deep into the joys of equity math. Using our custom-built Cap Table engine, every founder/CFO can manage the cap table, but it still takes work to manage every part of the cap table through 8-12 funding rounds, including preference rights and various unpaid advisor shares… Entreprenurial finance can be a lot of fun, for the right CFOs.

Investor segmentation Using the Investor Map, we segment all investor prospects into 2x2, to find the most relevant investors, aka the Value Developers

Early revenue growth Or, as the case with one team, how to ramp up your revenue aggressively, to hit 90M ARR in year 1 (in real life, it took Wiz 18 months to pass the 100M ARR milestone)

Climate strategy & securing global climate advisor These days, every company is a climate tech company, so the teams naturally developed their climate strategy and pitched VC expert and Stanford faculty Don Wood to bring him onboard as a strategic advisor.

Capital strategy Using the Long-Term Funding Roadmap, the participants mapped out a longer-term capital strategy, using the following formulas: 3X valuation increase for every round (very challenging) 10% - 25% dilution for every round (challenging) Tracking a valuation to revenue metric of ca. 10X across all rounds

Chasing Unicorns Closing out day 1 with the first ever “bank-born” Unicorn, Wheel Tech, ?on a mission to change how robotics and logistics run our societies.

Hectic capital market Closing out day 1, we say 23 equity financing rounds completed, one unicorn, one pony (half-a-unicorn), and valuations ranging from 1,3BN to 20M. Maybe more important, ARRs were ranging from 90M (very impressive) all the way down to a ‘yet to launch’ strategy and zero ARR.

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While overnight was intended for a great meal and personal reflection, one team could not quite let it go, and spent six more hours, till well past midnight trying to structure a friendly M&A, and when that didn’t work out, playing for a hyper aggressive hostile take-over.

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DAY TWO

Kicking off day two, the participants stepped into the ‘hypergrowth’ part of the journey. Now, we were on a mission to scale. It was time to 5X ARRs and 10X valuations to outrace and outcompete the competition. The rosy days of early-stage entrepreneurship was out and it was time to really put in the work needed at the later stages of the Founder’s Journey.

?Outcome Scenarios One of the least understood concepts for most founders in the world of entrepreneurship (in our view, at least) is the idea of Outcome Analysis, or rather ‘if an investor invest, what is he/she likely to get back?’. Wow, how I wish more founders understood this (hey, we run a separate bootcamp just on this). For the bankers, the concept of Outcome Scenarios were easy to grasp, but hard to master. Few were able to nail it right off the bat (hey, they only had 45. Minutes, and impressed us with the results achieved in that time.

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Building a strategic board Just like in real life, a strategic board is vital for the company’s growth. Naturally, the participants had to dive in and build a world-class board, including roles, names and compensation structures.

Excessive burn rate While day one, the early days for founders, day two quickly saw costs spiral completely out of control, and settle at 10M per round, a 100X cost increase from the start of day 1; just like in real-life…

Growth stage financing

Working into the second part of the day, or the later stages of the Founder’s Journey, teams were racing to stay liquid, with some securing emergency bank facilities to stay afloat (after all, they are bankers, right?) and other teams, fueled by strong ARR growth, access to debt financing and a thriving investor market was sitting on piles of cash. One of the most popular investors to run into; Peach Ventures.

Complex deal structures

Naturally, as a scaling founder, you will meet complicated terms and deals. Can you make the deal with Hull Street work?

Exit Strategy As with any great startup, sooner or later, it is time to discuss that ‘exit part’ of the journey. Same goes for our DNB participants. Of course, as bankers, they held massive insider information benefits, allowing them to nail the exit strategy discussion in record time.

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Upcoming board meeting Of course, sprinting through the Founder’s Journey, there sooner or later comes a time to exit. In our case, the board was eager to see a successful listing, allow the company to seek a winning public market position. Easy? Not all. Happens in real life? All the time.

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Our Masterclass ended with all teams seeking a public market outcome, with Oslo, Tokyo and Nasdaq as the exchanges of choice.

POST-IPO As the post-IPO dust settled, all IR teams were up and running and the market priced the companies, the performance of the six teams (five, as one merger had taken place) showed Hypercare with a 60BN public market valuation, making it the 21st most valuable company in Japan (congrats), and Subsea Robotics becoming the 15th most valuable company on the OSL stock market. Not bad for two days work….

Closing out, the participants got a chance to reflect on the founder’s journey, the challenges founders face in scaling companies beyond the pre-seed stage and how the bank can continue to evolve and mature its offerings to best support startups and scale ups alike.

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While none of these founders got to see any liquidity from their efforts (happens in real-life way too often too), the Masterclass served as a great learning opportunity, exposing everyone to the early- (day 1) and later- (day 2) stages of the Founder’s journey, including key topics like capital strategy, outcome scenarios and exit strategy. To all the teams, well done! (and please keep expanding the bank’s role in supporting founders and the companies of tomorrow.

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FACILITATOR NOTE

Scale Up! From idea to exit, is our contribution to the global startup- and scale up ecosystem. In just 2- or 3-days, we are able to pack massive amounts of learning, while also making it highly engaging, competitive and entertaining. Participants learn all key aspects of early-stage financing and growth, including cap table math, term sheets, capital strategy and, going into day 2 or 3, also the changing landscape of growth stage financing. The materials cover 100’s of real-life investors, terms, conditions and get updated monthly to reflect changes in the global startup landscape (down rounds, anyone?)

This year alone, Scale Up! Is run in places like Egypt, Austria, Germany, Norway, Canada, Bahrain, Ghana, Italy, United States, the UK, as well as multiple online sessions for global participants.

The session at DNB was run by Henrik Amstutz, Kyrre Lemvik and Chris Rangen. A big thanks to the impressive participants and the work they are doing for the Nordic ecosystem and beyond!

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Join us to build better entrepreneurial ecosystems around the world. Explore Scale Up! Today.

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