0
Jack Rivkin
Keynote Speaker
2011
The Economy
The Venture Environment
Lessons Learned
Opportunities Today
A Sharper Fall and a Less Robust Recovery
A Lost and Volatile Decade
Valuation is as Important as Levels
US Debt is No Longer Rising
Cash is Accumulating in the US
Currency Has an Impact
China’s Currency is Rising
India’s Currency is Volatile but Flat
Trade Balances Have Shifted
0%
10%
20%
30%
40%
50%
60%
70%
80%
US Germany Brazil India China
COUNTRY
GDP/Employment
Agriculture GDP Agr Employment Ind...
Innovating into Growth
Urgency
Experimentation
Opportunity to Fail
Extended Runway
Multiple Approaches
Expansion vs. Repla...
$0
$20
$40
$60
$80
$100
$120
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
200...
16
1. Source: NVCA 2011 Year Book.
2. Source: Dow Jones VentureSource as of December 31, 2010, as reported on May 5, 2011....
0%
20%
40%
60%
1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
% of ES Capital Uninvested
$0
$10
$20...
18
Source: Thomson Reuters, VentureXpert as of June 30, 2011, as reported on November 3, 2011.
1. Represents the average o...
19
Fertile Environment for Value Creation
• Opportunities abound across the sectors backed by VCs
IT Life Sciences Cleante...
20
Growth Drivers for IT
Confidential/Trade Secret
• Strong relative value in the venture-backed sectors
– Internet: penet...
21
• Healthcare systems in a state of change
– From traditional fee-for-service toward integrated delivery systems
– Value...
• Increasing energy demand and
environmental concerns
‐ Aging and outmoded grid
‐ Rising demand for portable and
dispatcha...
23
Cleantech Core Themes
• Broad investment universe
– Demand-side management and energy efficiency
– IT and energy commun...
Attractive Asset Classes
• Infrastructure
– More Productive Movement of Goods, Services, People, Information
– Productive ...
Attractive Asset Classes
• Agritech
• Information Technology
– Consumer
– Business
• Health Care
– New Products
– Efficien...
26
Summary
• Abundant VC opportunities for major market disruptions exist across multiple
sectors and on a global basis
• ...
The Economy
The Venture Environment
Lessons Learned
Opportunities Today
Jack Rivkin
Rivkin india ppt edited december 7 2011
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Rivkin india ppt edited december 7 2011

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Jack Rivkin's Keynote Address presentation at TES 2011

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  • Let’s look at our third area of investment - our cleantech investments.Clearly, the world has to address significant problems in the areas of power generation and environmental concerns. To illustrate this point, there are 5 billion people who would like to enjoy the energy-rich lifestyles currently enjoyed by 500 million people, mostly in the developed world. We will need non-linear improvements and the ingenuity of entrepreneurs to bridge this gap. Other drivers include the need to address today’s aging and outmoded grid with new meter and communication technologies and the need to increase energy security, not only in the US but also in Europe, China, and India. These problems represent tremendous market and investment opportunities for savvy investors in cleantech.
  • Transcript of "Rivkin india ppt edited december 7 2011"

    1. 1. Jack Rivkin Keynote Speaker 2011
    2. 2. The Economy The Venture Environment Lessons Learned Opportunities Today
    3. 3. A Sharper Fall and a Less Robust Recovery
    4. 4. A Lost and Volatile Decade
    5. 5. Valuation is as Important as Levels
    6. 6. US Debt is No Longer Rising
    7. 7. Cash is Accumulating in the US
    8. 8. Currency Has an Impact
    9. 9. China’s Currency is Rising
    10. 10. India’s Currency is Volatile but Flat
    11. 11. Trade Balances Have Shifted
    12. 12. 0% 10% 20% 30% 40% 50% 60% 70% 80% US Germany Brazil India China COUNTRY GDP/Employment Agriculture GDP Agr Employment Industry GDP Industry Emp Services GDP Services Emp Investment Structural Differences Will Narrow Thanks to our friends at Knightsbridge Advisers.
    13. 13. Innovating into Growth Urgency Experimentation Opportunity to Fail Extended Runway Multiple Approaches Expansion vs. Replacement Economics
    14. 14. $0 $20 $40 $60 $80 $100 $120 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 to Oct.2011 Annualized US VC European VC Asian VC Annual Venture Capital Investment Source: ThomsonReuters, VentureXpert Billions Venture Investing is More Universal Today Thanks to our friends at Knightsbridge Advisers.
    15. 15. 16 1. Source: NVCA 2011 Year Book. 2. Source: Dow Jones VentureSource as of December 31, 2010, as reported on May 5, 2011. Industry Contraction in the US in Contrast to Asia 706 396 293 0 100 200 300 400 500 600 700 800 2000 2005 2010 86 649 157 0 100 200 300 400 500 600 700 800 1990 2000 2010 Number of VC Funds Raising Capital in a Given Year1 Number of VC Investors that Made at Least 4 Investments in a Given Year2 Confidential/Trade Secret Thanks to our friends at Knightsbridge Advisers.
    16. 16. 0% 20% 40% 60% 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 % of ES Capital Uninvested $0 $10 $20 $30 $40 $50 $60 Billions $85.6 17 1. Source: Dow Jones VentureSource as of September 30, 2011, as reported on October 10, 2011. 2. Original concept from Steven N. Kaplan, University of Chicago Booth School of Business. 3. Source: Thomson Reuters, VentureXpert as of June 30, 2011, as reported on November 3, 2011. Right-Sizing of the Industry 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 VC Commitments as % of Total Stock Market Capitalization Industry contractions typically yield outsized returns Confidential/Trade Secret Cumulative Percentage of Early Stage Capital Uninvested3 Annual VC Fundraising1 VC Funding Raised as a % of Stock Market Capitalization1,2 Thanks to our friends at Knightsbridge Advisers.
    17. 17. 18 Source: Thomson Reuters, VentureXpert as of June 30, 2011, as reported on November 3, 2011. 1. Represents the average of the median and upper quartile thresholds per vintage year, respectively, vintages 1985 to 2009. Significant Premium for Top Quartile Access Confidential/Trade Secret 9.3% 24.8% 0% 5% 10% 15% 20% 25% 30% 35% Average Median Average Upper Quartile IRR Early Stage Venture 1554 bps avg UQ premium 1 1 8.4% 22.8% 0% 5% 10% 15% 20% 25% 30% 35% Average Median Average Upper Quartile IRR All Stages Venture 1442 bps avg UQ premium 1 1 • Critically important to be in top funds due to large upper quartile premium and ‘persistence’ of returns • Early stage, top quartile venture outperforms Thanks to our friends at Knightsbridge Advisers.
    18. 18. 19 Fertile Environment for Value Creation • Opportunities abound across the sectors backed by VCs IT Life Sciences Cleantech • Market disruptions are occurring – Across the global theater – Across multiple subsectors…which are intersecting • Venture-backed companies are redefining markets – At a seemingly accelerating pace Confidential/Trade Secret Thanks to our friends at Knightsbridge Advisers.
    19. 19. 20 Growth Drivers for IT Confidential/Trade Secret • Strong relative value in the venture-backed sectors – Internet: penetrating daily life, globally – Wireless bandwidth: connected always-on devices are now ubiquitous – Social networking: allowing us to stay in touch, communicate, collaborate – Commodity CPU, storage and bandwidth: enterprises undergoing major architectural transition – cloud computing – Application delivery: on-demand infrastructure/services acting as enablers; technology is available “by the drink” – Consumerization of IT: technology reaching the mainstream consumer and the rural poor Thanks to our friends at Knightsbridge Advisers.
    20. 20. 21 • Healthcare systems in a state of change – From traditional fee-for-service toward integrated delivery systems – Value of technology shifts to improving patient outcomes, reducing cost • “Hierarchy of innovation:” – Treating previously untreated diseases – New physiological insights leading to greenfield treatments – Little innovations that improve clinical outcomes • Changes in regulation and reimbursement • Low cost delivery of basic health care services Confidential/Trade Secret Growth Drivers for Life Sciences Thanks to our friends at Knightsbridge Advisers.
    21. 21. • Increasing energy demand and environmental concerns ‐ Aging and outmoded grid ‐ Rising demand for portable and dispatchable energy • Increasing energy security requirements • Restructuring of global power industry • Clean, renewable energy sources • New meter and communication technologies • Mobile power stations and chargeable demand shifters • Domestic energy solutions and reduced reliance on imports • Products that improve performance and reduce costs Growth Drivers for Cleantech “It’s very simple; we need to cost-effectively produce usable energy with a smaller carbon footprint, and we need to use that energy far more efficiently - radical new technology, Black Swans, can get us there.” ~Vinod Khosla, Khosla Ventures Solutions:Challenges: Confidential/Trade Secret 22 Thanks to our friends at Knightsbridge Advisers.
    22. 22. 23 Cleantech Core Themes • Broad investment universe – Demand-side management and energy efficiency – IT and energy communications – Advanced power conversion – Power electronics and semiconductors – Electrical and fuel storage – Clean fuel processes – Pollution control – Distributed power Confidential/Trade Secret Thanks to our friends at Knightsbridge Advisers.
    23. 23. Attractive Asset Classes • Infrastructure – More Productive Movement of Goods, Services, People, Information – Productive Use of Water • Fossil Fuels and Alternative Energy – Carbon Capture and/or Elimination – More Productive Plants – Transmission – Grid – Distributed Power • Efficiency/Productivity – Structures – Products – Transportation
    24. 24. Attractive Asset Classes • Agritech • Information Technology – Consumer – Business • Health Care – New Products – Efficiency – Mode of Care • Education • Financial Services • Hard Assets • Global Demand
    25. 25. 26 Summary • Abundant VC opportunities for major market disruptions exist across multiple sectors and on a global basis • Innovation is occurring at an accelerating pace • India is innovating into growth • Experienced VCs contribute by: – Selecting the most compelling and game-changing innovations – Backing visionary entrepreneurs who recognize the benefits of top VC backing – Creating powerful competitive advantages – Using their network of talent, expertise, and investors Confidential/Trade Secret Thanks to our friends at Knightsbridge Advisers.
    26. 26. The Economy The Venture Environment Lessons Learned Opportunities Today Jack Rivkin
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