Shai Goldman
Silicon Valley Bank
sgoldman@svb.com
Twitter: @shaig
Presentation available at slideshare.net
Nov 30, 2010
1
 Silicon Valley Bank
 Venture Debt
 Macro Overview
 Less VC $
 Super Angel / Micro VC $
 Corporate VC $
 Less inter...
 HQ in Bay Area, California – Est. 1983
 Technology, Venture Capital, Wine
 US, UK, Israel, China, India
 10,000 techn...
 Venture Debt does not replace Venture Capital
 Augments Series A round
 Typically used for extending run way
 Series ...
1052
5000
1500
2800
1300
2534
0
1000
2000
3000
4000
5000
6000
1995 2000 2001 2007 2008 2010
5
350
94
57
57
86
6 12
40
0
50
100
150
200
250
300
350
400
2000 2004 2005 2006 2007 2008 2009 2010
6
$7
$100
$35
$22 $22?
$0
$20
$40
$60
$80
$100
$120
1995 2000 2007 2010 2011
VC investments ($US Billion)
Per PWC MoneyTree ...
 10 year returns = negative (below 0%)*
 VCs target a 3X return on fund, 15%+ annual return
 Less interest by their inv...
 Smaller funds < $100M
 A few General Partners
 $1.5M rounds ($15K to $1M /investment)
 LPs are showing interest in th...
 Innovation is not from within
 Find and invest in innovation
 Cash available
 Intel, Google, Cisco, Best Buy, Disney,...
 Cleantech (down)
◦ Very capital intensive, over funded in 2006/2007
 Life Science (down)
◦ Capital intensive, long inve...
 Mobile: iOS (Apple), Android (Google), RIM? MS?
 Infrastructure: HP, Cisco, VMware, IBM, MS
 Enterprise: SAP, Oracle, ...
 $500K to $1.5M
 SW (mobile, consumer, enterprise, infrastructure)
 2+ Founders Full Time
 Initial Product Complete
 ...
 M&A
◦ $55M Median Acquisition
◦ Active Acquires: Apple, Facebook, Google, HP, Dell,
IBM, Oracle, Cisco, Amazon, etc
 $1...
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Preso provided to startups in Madrid

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As part of my visit to Spain visiting with startups, I provided this presentation as an overview of the US tech/VC ecosystem

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Preso provided to startups in Madrid

  1. 1. Shai Goldman Silicon Valley Bank sgoldman@svb.com Twitter: @shaig Presentation available at slideshare.net Nov 30, 2010 1
  2. 2.  Silicon Valley Bank  Venture Debt  Macro Overview  Less VC $  Super Angel / Micro VC $  Corporate VC $  Less interest in cleantech, life science, semi  More interest in software  More M&A and Less IPO 2
  3. 3.  HQ in Bay Area, California – Est. 1983  Technology, Venture Capital, Wine  US, UK, Israel, China, India  10,000 technology companies are clients  50%+ of VCs backed startups are clients  Commercial Bank (Lending, Investments, Valuations, FX) 3
  4. 4.  Venture Debt does not replace Venture Capital  Augments Series A round  Typically used for extending run way  Series A round -> 18 months  + Venture Debt -> 24 months  Hit additional milestones  Higher valuation on Series B  Ex: $5M Series A x 20% = $1M Venture Debt  Pricing (equity/warrants + interest) 4
  5. 5. 1052 5000 1500 2800 1300 2534 0 1000 2000 3000 4000 5000 6000 1995 2000 2001 2007 2008 2010 5
  6. 6. 350 94 57 57 86 6 12 40 0 50 100 150 200 250 300 350 400 2000 2004 2005 2006 2007 2008 2009 2010 6
  7. 7. $7 $100 $35 $22 $22? $0 $20 $40 $60 $80 $100 $120 1995 2000 2007 2010 2011 VC investments ($US Billion) Per PWC MoneyTree Report 7
  8. 8.  10 year returns = negative (below 0%)*  VCs target a 3X return on fund, 15%+ annual return  Less interest by their investors i.e. Limited Partners (LPs)  SWF (Sovereign Wealth Funds) are showing increased interest  Exits have decreased, median acquisition is $55M *http://thomsonreuters.com/content/press_room/financial/2010_08_10_US_ PE_performance_positive 8
  9. 9.  Smaller funds < $100M  A few General Partners  $1.5M rounds ($15K to $1M /investment)  LPs are showing interest in these new funds 9
  10. 10.  Innovation is not from within  Find and invest in innovation  Cash available  Intel, Google, Cisco, Best Buy, Disney, GM, Nike, Telefonica, Applied Materials, etc 10
  11. 11.  Cleantech (down) ◦ Very capital intensive, over funded in 2006/2007  Life Science (down) ◦ Capital intensive, long investment period, regulatory issues  Semi (down) ◦ Capital intensive, only a couple of acquires  Software (up) ◦ Delivery: SaaS/Web, Mobile ◦ Clients: Enterprise, Consumer ◦ Billing: Subscription, Freemium ◦ Capital Efficient 11
  12. 12.  Mobile: iOS (Apple), Android (Google), RIM? MS?  Infrastructure: HP, Cisco, VMware, IBM, MS  Enterprise: SAP, Oracle, Salesforce, MS  Consumer: Apple, Google, Facebook, Twitter, Amazon, Disney, Netflix 12
  13. 13.  $500K to $1.5M  SW (mobile, consumer, enterprise, infrastructure)  2+ Founders Full Time  Initial Product Complete  Revenue/Customers  US (Bay Area, NYC, Boston, LA, Seattle, Austin) 13
  14. 14.  M&A ◦ $55M Median Acquisition ◦ Active Acquires: Apple, Facebook, Google, HP, Dell, IBM, Oracle, Cisco, Amazon, etc  $1B+ M&A (IPO?) opportunities ◦ Facebook ($34B - $50B), ◦ Groupon ($2.5B - $6B Google? rumor) ◦ Zynga ◦ LinkedIn ◦ Twitter 14
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