Your SlideShare is downloading. ×
US Startup Investment Market (Startonomics Tokyo, June 2009)
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Introducing the official SlideShare app

Stunning, full-screen experience for iPhone and Android

Text the download link to your phone

Standard text messaging rates apply

US Startup Investment Market (Startonomics Tokyo, June 2009)

19,220
views

Published on

Presentation on US Startup & Seed / Angel Investment Market for Startonomics Tokyo (June, 2009). Speakers Dave McClure, Joyce Kim, Dave Troy, Ryan Pipkin.

Presentation on US Startup & Seed / Angel Investment Market for Startonomics Tokyo (June, 2009). Speakers Dave McClure, Joyce Kim, Dave Troy, Ryan Pipkin.

Published in: Business, Economy & Finance

2 Comments
14 Likes
Statistics
Notes
No Downloads
Views
Total Views
19,220
On Slideshare
0
From Embeds
0
Number of Embeds
9
Actions
Shares
0
Downloads
179
Comments
2
Likes
14
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • Transcript

    • 1. Startonomics / Tokyo - June 9, 2009 Dave McClure, Founders Fund Joyce Kim, Soompi & Fortis General Counsel David Troy, Baltimore Angels Ryan Pipkin, AngelSoft US Startup Investment Market
    • 2. Startup Investment Trends
      • Venture Capital Turmoil: “ R.I.P. Good Times ”
        • Not so bad for startups (valuation), however..
        • Pretty bad for VCs (fundraising) if poor returns
      • Slowdown Later Stage Deals, Reduced Valuations
      • Legal Trends and Changes?
      • Growth -> Monetization, Revenue -> Profitability
      • Growth of Seed Funds, Incubators
        • Y-Combinator, TechStars, fbFund REV
      • Startonomics / Startup Metrics / Lean Startup
    • 3. Dave McClure PROPRIETARY & CONFIDENTIAL
        • 2001-2008:
        • Startup Investor: 500 Hats LLC, Founders Fund
        • Tech Marketing : PayPal, Simply Hired, Mint
        • Advisor, Angel Investor : 20+ Startups
        • Conf. Organizer : Web 2.0, O’Reilly, Startonomics
        • Stanford Visiting Lecturer : Facebook, Startup Metrics
        • 80’s & 90’s:
        • Entrepreneur : Founder/CEO Aslan Computing (acq.)
        • Developer : Windows Apps / SQL DB Admin
        • User Groups : E-Commerce, Internet, Client-Server
        • Engineer : Johns Hopkins ‘88, BS Eng / Applied Math
    • 4. Personal Investments (2004-2008) PROPRIETARY & CONFIDENTIAL
    • 5. Professional Investments (2009)
      • FF Angel LLC
      • Twilio
      • 1000 Markets
      • UserVoice
      • Bit.ly
      • DailyBurn
    • 6. Changing Focus
    • 7. Startup Funding Ecosystem PROPRIETARY & CONFIDENTIAL Union Square Ventures First Round Capital SoftTech (Clavier) Maples Investments Benchmark Sequoia Y-Combinator TechStars FF Angel FF II fbFund REV FF I Angels & Incubators ($0-10M) Seed Funds ($10-50M) Small VC Funds ($50-250M) Traditional VC Funds (>$250M)
    • 8. Angelsoft.net Data Metrics Angelsoft represents over 80% of the Organized Angel Networks in the United States
    • 9. From Q4 ‘08 - Q1 ‘09
      • Growth by 17.83% in # of companies actively looking for angel capital
      • Decline by 35% in total $ investment amount
      • Decline by 23.42% in valuations
    • 10. From Q4 ‘08 - Q1 ‘09
      • Decreased by 50% in time it took to make an investment
      • Increase by 31.19% in average amount of money entrepreneurs are seeking
      • Increase by 86% in average investment amount per deal that closed
    • 11. Legal Trends
      • Convertible Notes / Caps
      • Priced Rounds
      • Terms are very pro-investor
      • Valuations are down
      • Tip – ask your attorney how to control costs.
    • 12. Investment Stages
      • Micro-Seed: $0-$100K –> Prototype
      • Seed: $100K-$1M –> Market Development
      • Series A: $1-5M+ –> Revenue / Profitability
      • Series B: $2-20M+ -> Profitability / ?
    • 13. Example #1: Micro-Seed (“Prototype / Incubate”)
      • 1-2 person startup
      • Founder / Angel Investors
        • => $25-100K @ $500K-2M pre-money valuation
        • FF&F: Friends, Family, & Fools
        • Credit Cards, 2 nd Mortgage, Customer-Financed, etc
      • Examples: Y-Combinator, TechStars, fbFund REV
      • Goal: Build Functional Prototype
        • Concept->Alpha , ≤ 3-6 mo’s
        • Develop Minimal Critical Feature Set => Get to “ It Works ”
        • Instrument Basic Dashboard, Conversion Metrics
        • Setup Build/Release/Test Cycle
        • Test Cust. Adoption (10-1000 users) / Cust. Satisfaction (Scale: 1-10)
        • Connect with Advisors & Mentors, Angels/VCs
      • Demonstrate Concept , Reduce Product Risk, Vet Team
      • Develop Metrics & Filter for Follow-on Investment
      PROPRIETARY & CONFIDENTIAL
    • 14. Example #2: Seed (“Angel / Syndicate”)
      • 2-5 person startup
      • Angel Investor / Syndicate
        • => $100K-$1M @ $1-3M pre-money valuation
      • Examples: First Round, True Ventures, Union Square, FF Angel
      • Goal: Develop/Expand Prototype -> Functional, Growing Beta
        • Alpha->Beta , ≤ 3-6 mo’s
        • Test Cust. Sat ≥ 6 / 10 => Get to “ Doesn’t Suck ”
        • Setup A/B Testing Framework, Optimize Conversion
        • Test Mktg Campaigns, Cust. Acq. Channels: Volume, Cost
        • IF/WHEN Cust. Sat ≥ 8 (“ It’s Good! ”), THEN Grow User Base
        • Connect with Advisors, Series A Investors, Key Hires
        • Test/Develop Revenue Model
      • Prove Solution/Benefit, Assess Market Size, Initial Lines of Revenue
      • Test Channel Cost, Revenue Opportunity
      • Determine Org Structure, Key Hires
      PROPRIETARY & CONFIDENTIAL
    • 15. Example #3: Series A (“Venture”)
      • 3-10 person team; bring in key CXO/VP roles
      • Large Seed / Small Series A
        • => $500K-$5M @ $2-20M pre
      • Examples: Founders Fund , Sequoia Capital, Benchmark Capital
      • Goal: Market Expansion:
        • Beta->Production , ≤ 6-12 mo’s
        • Rigorous A/B Testing, Optimize Conversion
        • Get Cust. Sat ≥ 8 / 10 => “ It Rocks, I’ll Tell My Friends ”
        • Marketing Plan => Predictable Channels / Campaigns + Budget
        • Vet Scalability & Infrastructure, Customer Service & Ops
        • IF/WHEN Predictable, Scalable Growth THEN Step On Gas
        • Connect with Marketing / Distribution Partners
        • Revenue / Profit focus
      • Prove/Expand Market, Operationalize Business
      • Future Milestones: Expansion, Sustainable, Exit Options
      PROPRIETARY & CONFIDENTIAL
    • 16. Startup Metrics PROPRIETARY & CONFIDENTIAL
        • A cquisition : What channels do customers come from?
        • A ctivation : Do they have “happy” 1st experience?
        • R etention : Will they come back?
        • R eferral : Do they tell other people?
        • R evenue : How to make money?
    • 17. STARTonomics 2008 Conference 300+ Startup Entrepreneurs & Investors Startup Metrics Education for Product, Marketing, Tech
      • Startup Metrics
      • Product Development
      • Scalability
      • Game Mechanics
      • Design 101
      • Activation & Retention
      • Marketing
      PROPRIETARY & CONFIDENTIAL
      • SEO
      • Social Media
      • Viral Marketing
      • Social Platforms
      • Revenue Optimization
      • Customer Service
      • Funding & Financing
    • 18. Links & Resources
      • FoundersFund.com , follow @DaveMcClure
      • Fortis General Counsel , follow @JoyceKim
      • AngelSoft.net , follow @ripkin
      • follow @BaltimoreAngels, @DaveTroy
      • Yokum Taku, StartupCompanyLawyer.com
      • Eric Ries, Startup Lessons Learned
      • Dave McClure, Startup Metrics for Pirates
      • Finance4Founders.com
      • Startonomics SF (2008)