Onetti - Marinucci - MTB Job Creator Tour 2014
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Marco Marinucci and Alberto Onetti, Entrepreneurship 360, Mind the Bridge Job Creator Tour 2014

Marco Marinucci and Alberto Onetti, Entrepreneurship 360, Mind the Bridge Job Creator Tour 2014

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Onetti - Marinucci - MTB Job Creator Tour 2014 Onetti - Marinucci - MTB Job Creator Tour 2014 Presentation Transcript

  • MARCO MARINUCCI Founder & CEO, Mind the Bridge Foundation ALBERTO ONETTI Chairman, Mind the Bridge Foundation Naples – May 12, 2014 Entrepreneurship 360 @MindTheBridge #jobcreator
  • What we believe Investors Startups Corporates Entrepreneurship
  • Startups
  • Base Ingredients for a Startup 4
  • The Entrepreneur profile: Italy vs. US 5 Entrepreneurs 30 to 49 started businesses at a higher rate than other age groups did The Kauffman Foundation and LegalZoom Startup Environment Index 2012 Mind The Bridge Survey 2012 Age distribution In Italy 84% are in the 26-45 range. 33 is the average age 1 2 A third of startup owners were women Female entrepreneurs are only 11% Gender 19% had master’s degrees while 8% professionals or doctorate Education 3 42% have a master degree while 11%a Ph.D. or MBA Prior Experience 4 57% have 6+yrs of prior industry/work experience and 44% had started companies in the past Funding & Incubation period Almost 80% has 8/9 yrs avg. prior working experience and 23% has founded at least one company before 5 80% of early-stage business owners in US used personal funds to finance their companies. Bootstrapping rules (58%), while 38% got also funding by external investors. More info here: “Startups - Italy vs US - Onetti IID 2013”, A. Onetti, Italian Innovation Day, Mountain View, 2013
  • Business Idea 6 THE BIG IDEA!!! … THAT MATTERS A LOT, BUT IT’S ALL ABOUT EXECUTION …
  • The Business Plan? “Business plans and 5 years financial projections are a waste of time” 7 Dave McClure “They came to me with no business plan” Intel 1968 “No one besides venture capitalists and the late Soviet Union requires five- year plans to forecast complete unknowns” Steve Blank
  • The Lean Startup Methodology “The Lean Startup method teaches you how to drive a startup, how to steer, when to turn, and when to persevere and grow a business with maximum acceleration.” Eric Ries Vision Steer Accelerate TEST the product, collect FEEDBACK, understand CUSTOMERS NEEDS FAIL fast (Pivoting?) or GROW fast. MODIFY your MVP, IMPROVE it SCALE “Get out of the Building!”
  • Build-Measure-Learn 9 1 3 2 What is the problem we aim at solving? MVP: Minimum Viable Product Metrics, Traction No plan survives first contact with customers Pivoting or scale? Validated learning
  • Investors
  • Founders’ capital, Savings, Family, Friends Seed Investors, Crowdfunding, Angels, Early stage VC (Series A) Venture Debt, Loans, Working Capital Lines, Strategic Partners, Retained earnings Later Stage VC (Series B+), Corporate VC, Private placement, Public markets The Funding Sources 11 Bootstrapping Equity Financing Early sources Later sources
  • Angels: General Investment Process  Informal  Close to Home  Ancillary  Individual vs Group Investment Source: NVCA Yearbook Center for Venture Research, University of New Hampshire John Backus, 2012 12
  • VC: General Investment Process 13 Limited Partners VC Firm (General Partners) Startup Companies IPO/M&A Fund Fund Fund Exit Distributions Fundraising Commitments Investment DisbursementsProceeds
  • Valuation is a two side process  Size of market opportunity how big is the market segment, what market share can you gain?  Comparables Multiple of Revenue (trailing/forward) or EBITDA  Terms Liquidation Preferences/Management Carve-out/Cash vs Paper/Earn-out/Lock-up  Time Better «quick and dirty» than never  Ultimately Bid vs. Ask negotiation 14
  • VC Average Investment Portfolio DEFAULTS BREAKEVEN “FIRE SALES” ZOMBIES IPO/M&A GOOD IPO/M&A WILD ONES (IPO) TOTAL 60% 12% 10% 8% 6% 4% 0% 100% Source: ATV
  • Venture Capital Returns follow the Power Law 16 16 Tumblr-Yahoo Deal
  • Who are The Kings? 17 Just look at the VC firms that are behind the top 100 tech exits
  • The Selection Aptitude? 18
  • Corporates
  • Disruptive innovation Is yours far behind?
  • Innovators in large organizations... Kodak invented digital photography, but could not shift its focus quickly enough from film.
  • “My organization gives new ideas a fair hearing and implements them quickly, when they make sense.”
  • Sorry, no ideas are born fully formed
  • Risk averse leadership
  • And what about your employees?
  • David & Goliath Must Dance: Startups are the fast track to disruptive innovation
  • Silicon Valley: trends
  • What’s shaking? 1. The lean startup movement  Lean Startups do not require a lot of cash  The startup no longer needs $5M before launching 28 LEAN is everywhere
  • 2. The rise of accelerators and incubators  Plenty of “Archimedes labs” all over the world  Typically under $20,000 money offered 29 What’s shaking?
  • Source: Duncan Davidson (Bullpen Capital) cited in No.1 - The Startup Valley of Death - December 2013 30 3. Accelerators’ Bubble?  Seed capital and growth capital is available  Only 27% are funded after 1 year What’s shaking?
  • 4. The retreat of VCs to later stage (Series A Crunch)  Why not wait to see who did well and selectively invest only in the winners?  Most VCs abandoned early stage investing  +90% of startups and 73% of incubated startups end up in the Valley of Death 31 What’s shaking?
  • Angel vs Venture Capital Investments There is a lot of angel money ($20B), indeed:  3X the money that goes in to Early-Stage Venture ($7.4B)  1.5X the money that goes in to late stage venture Source: NVCA Yearbook Center for Venture Research, University of New Hampshire John Backus, 2012 32
  • 5.Angel Bubble?  Only 2.5% of angel- funded companies will ever raise venture capital. What happens to the rest?  Acqui-hiring= nice exits Source: NVCA Yearbook Center for Venture Research, University of New Hampshire John Backus, 2012 33 “We are in an angel bubble that will keep inflating when Crowdfunding meets Main Street in 2013. The bubble will burst. Not tomorrow. But soon” (John Backus, NAV) What’s shaking?
  • 6. The Series B Trap Source: No.1 - The Startup Valley of Death - December 2013 34  Pile of cash for companies that get the elusive “traction”  Raising tens or even hundreds of millions of dollars without massive dilution What’s shaking?
  • 6. (Equity) Crowdfunding  Disintermediation  Transparency  Lowering the bar: We are all investors  Syndicates= VC like $$ 35 What’s shaking?
  • 7. Acqui-Hires fuel the Market 36 What’s shaking? Top 10 Acquirers In Silicon Valley 1 Cisco 160 2 Google 143 3 Microsoft 132 4 IBM 117 5 Yahoo! 107 6 Rent My Vacation Home USA 96 7 Hewlett-Packard 86 8 Oracle Corporation 84 9 AOL 62 10 EMC 58 Font: Crunchbase April 2014
  • Funding FUNDING TOTAL $1.16B Acquisitions # Acquisitions 31 M&A TOTAL: $630M FUNDING(pre-IPO)/ACQUISITION SPENT ratio: 1.84 MAJOR ACQUISITION: MOPUB ($350M) ACQUISITIONS (2008-2014) Mesagraph, 3/2014 1 SecondSync, 3/2014 2 MoPub, 9/2013 3 $350M Trendrr, 8/2013 4 Marakana, 8/2013 5 Spindle, 6/2013 6 Lucky Sort, 5/2013 7 Ubalo, 5/2013 8 Bluefin Labs, 2/2013 9 $80M Crashlytics, 1/2013 10 $100M Cabana, 10/2012 11 Vine, 10/2012 12 $30M Clutch.io, 8/2012 13 Hotspots.io, 4/2012 14 Posterous, 3/2012 15 $10M Dasient, 1/2012 16 Summify, 1/2012 17 Whisper Systems, 11/2011 18 Julpan, 9/2011 19 Bagcheck, 8/2011 20 BackType, 7/2011 21 AdGrok, 5/2011 22 $10M TweetDeck, 5/2011 23 $40M Fluther, 12/2010 24 Smallthought Systems, 6/2010 25 Dabble DB, 6/2010 26 Cloudhopper, 4/2010 27 Atebits, 4/2010 28 Mixer Labs, 12/2009 29 $5.2M Values of n, 11/2008 30 Summize, 7/2008 31 $15M Source: Crunchbase April 2014 Growth Strategy: Twitter 37 Exit Public NASDAQ:TWTR Date nov-13 Raised $1.82B Post IPO Valuation $18.1B
  • In total, the startups acquired raised $73M in funding across 42 transactions prior to being acquired by Twitter. Of the acquired startups that raised funding, only 6 ever reached the Series B stage. 9 startups were acquired by Twitter after receiving just seed or angel funding. On average, Twitter startups with funding raised 2.4 rounds prior to acquisition. The average time between first funding and acquisition was 2.1 years. 18/31 acquisitions have come since 2012 highlighting the company’s accelerated pace of acquisition. Twitter Acquisition Strategy 38
  • 58% of Twitter’s acquired firms were based in California. 10% of acquisitions each were for New York or Massachusetts- based companies. Twitter Acquisitions: Locations 39
  • Funding FUNDING TOTAL $2.33B FUNDING IPO $113.8B Exit Public NASDAQ:FB Date may-12 Raised $18.4B Post IPO Valuation $104B Acquisitions # Acquisitions 45 Total $22.5B ACQUISITIONS (2007-2014) Oculus VR, 3/20141 $2B WhatsApp, 2/2014 2 $19B Branch, 1/2014 3 $15M Little Eye Labs, 1/2014 4 SportStream, 12/2013 5 Onavo, 10/2013 6 $150M Jibbigo, 8/2013 7 Monoidics, 7/2013 8 Parse, 4/2013 9 $90M Spaceport.io, 4/2013 10 Osmeta, 4/2013 11 Storylane, 3/2013 12 Atlas Advertiser Suite, 2/2013 13 threadsy, 8/2012 14 Spool, 7/2012 15 Bolt | Peters, 6/2012 16 $50M Face.com, 6/2012 17 $60M Karma, 5/2012 18 Lightbox, 5/2012 19 Glancee, 5/2012 20 Tagtile, 4/2012 21 Instagram, 4/2012 22 $1.01B GazeHawk, 3/2012 23 Friend.ly, 3/2012 24 Sendoid, 3/2012 25 Gowalla, 12/2011 26 WhoGlue, 11/2011 27 Strobe, 11/2011 28 Digital Staircase, 11/2011 29 Snaptu, 9/2011 30 $60M Push Pop Press, 8/2011 31 Sofa, 6/2011 32 Beluga, 3/201133 Rel8tion, 1/2011 34 Pursuit, 2011 35 Zenbe, 11/2010 36 drop.io, 10/2010 37 Nextstop, 9/2010 38 $2.5M Chai Labs, 8/2010 39 $10M Hot Potato, 7/2010 40 $10M ShareGrove, 5/2010 41 Divvyshot, 4/2010 42 Octazen Solutions, 2/2010 43 FriendFeed, 8/2009 44 $47.5M Parakey, 7/2007 45 MAJOR ACQUISITION: WHATSAPP ($19B) • $4B Cash • $12B FB shares • $3B Stock options Source: Crunchbase, April 2014 Growth Strategy: Facebook 40
  • VIDEO: WHY FB BUYS STARTUPS http://www.youtube.com/watch?v=OlBDyItD0Ak ”My company acquires other, smaller startups to hire great people. The fact that so many of the people who are leading products within Facebook are coming from a startup just creates an incredibly entrepreneurial environment at scale.” Mark Zuckerberg, CEO Facebook “We think about either acquiring talent or actually looking at technologies that we can bring in and build products on.” “We don’t usually acquire products.” Christian Hernandez, Facebook’s head of international business development Facebook Acquisition Strategy 41
  •  Before getting acquired, Glancee had only been downloaded 30k times and 20k users using it in the background on their iPhone  Instagram had 35 million users and was growing fast. INSTAGRAM vs GLANCEE Facebook -> Glancee 42 Deal Glancee was last acquisition before IPO (after Instagram), mainly undisclosed terms Acquihired: Talent & Technology acquisition
  • Facebook -> WhatsApp 43 Regarding the size it is equal to 25 Instagram ones WHATSAPP vs INSTAGRAM  Instagram had 13 employees before the deal.  WhatsApp and its 55 employees were gaining one million new users every day. Deal WhatsApp will operate independently retaining its brand, $3B stock options for founders and empoyees if they work at least 4years @ Facebook
  • 1. Let’s build Entrepreneural Ecosystems thinking at long term economical impact 2. Startups cannot prosper in a vacuum: smart money + exit strategies needed + link to large corporates 3. Education is key at startup/investor/corporate levels . Conclusions 44
  • THANK YOU FOR YOUR ATTENTION Questions & Answers SOCIAL MEDIA: Facebook: Mind the Bridge - Connecting Talent Twitter: MindTheBridge Google+: Mind the Bridge Foundation http://www.youtube.com/user/mindthebridgeTV http://siliconvalley.corriere.it/ http://www.linkedin.com/groups?gid=2142980 WEBSITE WWW.MINDTHEBRIDGE.ORG SCHOOL.MINDTHEBRIDGE.ORG ANGEL.MINDTHEBRIDGE.ORG EXECUTIVE.MINDTHEBRIDGE.ORG information@mindthebridge.org CONTACTS