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Venture financing class at duke 01 26 2012

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I presented these slides at Duke Law Professor Bill Brown's Structuring Venture Capital and Private Equity Transactions Class on January 26, 2012.

I presented these slides at Duke Law Professor Bill Brown's Structuring Venture Capital and Private Equity Transactions Class on January 26, 2012.

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    Venture financing class at duke 01 26 2012 Venture financing class at duke 01 26 2012 Presentation Transcript

    • Startup & Venture Lessons Duke Law School Jay Jamison Partner, BlueRun Ventures jjamison@brv.com | @jay_jamison | jayjamison.com CONFIDENTIAL
    • Agenda Introduction Early Stage Valuation Methods Exiting VC: Venture or Vulture Capital? CONFIDENTIAL
    • Introduction• Duke, BA, English, 1992• Emory Law School, 1995-96• MBA, Wharton,1998• Microsoft, 1998-2007• Founder, Moonshoot, 2007-10• Partner, BlueRun Ventures, 2010-Present CONFIDENTIAL 3
    • About BlueRun Ventures• Over $1.0B under management• Investing out of Fund IV ($240M)• Focus: Mobile & consumer internet• Seed & Series A CONFIDENTIAL 4
    • What is my job? Find • Unearth great deals Close • Convince NewCo to take our $ Assist • Help NewCo reach full potential CONFIDENTIAL 5
    • Early Stage Valuations CONFIDENTIAL 6
    • It’s a Golden Age for Entrepreneurs…. Cheaper than ever to start a company. Better resources • Incubators: Y-Combinator, 500Startups, … • Resources: Startup Digest, Lean Startup, TC, VB Technology is easier to learn, access, &c. • Codecademy • RoR • AWS Driving valuations up CONFIDENTIAL
    • … And Investors Understand This. I see lots of great companies that are: • Capital efficient • High velocity in coding and releasing • Product in market with traction • Clear customer insight on what works • Battle-tested founding teams • Clear, concrete ask on what $$$ they need CONFIDENTIAL
    • Implication While we’re in a Golden Age for Entrepreneurs, it is raising the bar for most very early stage companies… You need to prove more on verylittle money, because so many other start-ups are already doing so. CONFIDENTIAL
    • Early Stage ValuationsPlain vanilla Series A• VC: 20-30% VC• Option pool: 10-20% 25%• Founders & Angels keep rest Founders ESOP & Angels 15% 60%Items we watch• Founder incentive must be very high• Maintaining a clean cap table is important CONFIDENTIAL 10
    • Exiting CONFIDENTIAL 11
    • ExitsStuff beyond your control• The market• The corporate politics on the other sideStuff in your control• Which founding teams you back• Staying focused on execution until deal is signed• Attracting alternative bidders CONFIDENTIAL 12
    • VC: Venture or Vulture? CONFIDENTIAL 13
    • Venture• Unique and amazing form of capital• Helped scale companies that have had massive impact• And will continue to have an important role CONFIDENTIAL 14
    • But, VC is not… Summer Camp CONFIDENTIAL 15
    • Our AspirationAdapted from Glenn Kelman, CEO Redfin, describingworking w/ Pierre Lamond at his Plumtree.Then Pierre Lamond, the Sequoia partner on thedeal, began working out of our office, acting asthe virtual CEO. Pierre made a point of beingthere the day one of his other companies wentpublic. We looked at a news photo of all thesmiling people, who seemed to be living in agated community, on a planet I would never visit.Then Pierre said “that company was once evenmore screwed up than you are.” CONFIDENTIAL 16
    • Recommended actionsInvestigate and reference check any investor• Past successes• Past failuresAssess the friendliness of terms• This tells you a lot about alignment w/ founders CONFIDENTIAL 17
    • Thanks & Q&A CONFIDENTIAL 18