The Business of (Tech) Investing -- MentorCamp

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Slides for my talk at MentorCamp 2013 in Halifax, NS. The alternative title for this talk is "how not to lose all your fucking money."

Slides for my talk at MentorCamp 2013 in Halifax, NS. The alternative title for this talk is "how not to lose all your fucking money."

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  • 1. @paulsingh #mentorcamp THE BUSINESS OF (TECH) INVESTING THE RISE OF THE ANGELS (AND THE ENTREPRENEURS) PAUL SINGH @paulsingh・paul@dashboard.io・dashboard.io
  • 2. @paulsingh #mentorcamp 500 STARTUPS @paulsingh・paul@dashboard.io・dashboard.io
  • 3. @paulsingh #mentorcamp
  • 4. @paulsingh #mentorcamp A (R)EVOLUTION IN THINKING
  • 5. @paulsingh #mentorcamp SIGNALS ARE EVERYWHERE BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
  • 6. @paulsingh #mentorcamp SIGNALS ARE EVERYWHERE BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
  • 7. @paulsingh #mentorcamp TRANSPARENCY IS SIGNALS ARE EVERYWHERE BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
  • 8. @paulsingh #mentorcamp WALL STREET BEAT US TO IT
  • 9. @paulsingh #mentorcamp
  • 10. @paulsingh #mentorcamp “ UBS PROPRIETARY SATELLITE PARKING LOT FILL RATE ANALYSIS POINTS TO AN INTERESTING CADENCE INTRA-QUARTER AND POTENTIAL UPSIDE TO OUR VIEW.
  • 11. @paulsingh #mentorcamp
  • 12. @paulsingh #mentorcamp “ TWICE A WEEK A SMALL HELICOPTER CIRCLES OVER CUSHING’S TANK FARMS ON AN OIL INDUSTRY SPYING MISSION.
  • 13. @paulsingh #mentorcamp WALL STREET ISN’T ALONE THESE TECHNIQUES ALREADY USED TO UNDERWRITE IN-VITRO FERTILIZATION LENDING, PAYDAY LOANS, SUBPRIME AUTO LENDING, HOME/PERSONAL/AUTO INSURANCE AND MORE.
  • 14. @paulsingh #mentorcamp IT TURNS OUT, WE CAN DO IT, TOO SURPRISE!
  • 15. @paulsingh #mentorcamp + “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.
  • 16. @paulsingh #mentorcamp WE CAN DO IT, TOO.
  • 17. @paulsingh #mentorcamp WE CAN DO IT, TOO.
  • 18. @paulsingh #mentorcamp WE’RE DOING IT, TOO.
  • 19. @paulsingh #mentorcamp
  • 20. @paulsingh #mentorcamp “ VENTURE CAPITAL IS OPEN TO ATTACK BY DISRUPTIVE NEW BUSINESS MODELS AND TECHNOLOGY. -- NAVAL RAVIKANT (@naval)
  • 21. @paulsingh #mentorcamp dashboard.io
  • 22. @paulsingh #mentorcamp dashboard.io
  • 23. @paulsingh #mentorcamp EARLY STAGE VC IS CHANGING HAS CHANGED
  • 24. @paulsingh #mentorcamp STATE OF THE ART IN EARLY STAGE INVESTING IS NOT VERY SOPHISTICATED
  • 25. @paulsingh #mentorcamp UNBUNDLING OF ADVICE, CONTROL AND MONEY
  • 26. @paulsingh #mentorcamp USED TO BE ABOUT CAPITAL, DEALFLOW AND JUDGEMENT TODAY, IT’S ABOUT ACCESS.
  • 27. @paulsingh #mentorcamp
  • 28. @paulsingh #mentorcamp INCREASINGLY ABOUT DEAL SELECTION, NOT DEAL SOURCING. IT’S 2013, YO.
  • 29. @paulsingh #mentorcamp dashboard.io
  • 30. @paulsingh #mentorcamp (500) CHECKLIST Product solves a problem for a specific target customer Capital-efficient businesses - operational @ <$1M funding Primarily internet-based distribution - search, social, mobile, local Simple revenue models - transactions, subscriptions or affiliate Functional prototype before investment (or previous success) Small but measurable usage - some customers, early revenue Small but cross-functional team - engineer, design/UX, marketing
  • 31. @paulsingh #mentorcamp (NEW) FINANCINGS Standardized terms No fixed amounts, no closings, no leads Continuous, not discrete rounds Prices beginning to float No Board seats at the earliest stage Herd mentality and oversubscriptions
  • 32. @paulsingh #mentorcamp THE BUSINESS OF INVESTING IS ABOUT CHOOSING THE LEAST-WORST OPPORTUNITY NOT TRYING TO PREDICT THE NEXT GOOGLE, FACEBOOK OR LINKEDIN.
  • 33. @paulsingh #mentorcamp THE FIRST CHECK SHOULD BE SMALL AND FAST DOUBLE DOWN HEAVY IF THE COMPANY SURVIVES INTO THE NEXT ROUND
  • 34. @paulsingh #mentorcamp “ BY ITS NATURE, THE INTERNET UNDERMINES ANYONE WHOSE STATUS DEPENDS ON PRIVILEGED ACCESS TO INFORMATION. -- MICHAEL LEWIS
  • 35. @paulsingh #mentorcamp THE PRIVATE MARKET IS BECOMING MORE ACCESSIBLE.
  • 36. @paulsingh #mentorcamp THE PRIVATE MARKET IS BECOMING MORE TRANSPARENT.
  • 37. @paulsingh #mentorcamp Demo Day Videos ⟹ livestream.com/500startups Sample Pitch Decks ⟹ slideshare.net/500startups Venture Capital 101 ⟹ venturehacks.com/archives Investor Thoughts: Brad Feld ⟹ feld.com Fred Wilson ⟹ avc.com Chris Dixon ⟹ cdixon.org Mark Suster ⟹ bothsidesofthetable.com angel.co/valuations and angel.co/salaries
  • 38. @paulsingh #mentorcamp dashboard.io
  • 39. @paulsingh #mentorcamp YOUR KEY TAKEAWAYS Focus on Traction. Learn to Communicate and Inspire.
  • 40. @paulsingh ALSO... #mentorcamp Distribution > Product Tactics > Strategy Notability > Credibility Get on AngelList Raise 12-18+ months of funding Learn the basics of VC economics Don’t confuse due diligence with progress & probability... Shameless plug: dashboard.io
  • 41. @paulsingh #mentorcamp THE BUSINESS OF (TECH) INVESTING THE RISE OF THE ANGELS (AND THE ENTREPRENEURS) LEARN MORE: bit.ly/dashboard-weekly @paulsingh・paul@dashboard.io・dashboard.io