@paulsingh

#

THE BUSINESS OF
(TECH) STARTUPS
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)
PAUL SINGH
@paulsingh
@paulsingh

#

500 STARTUPS

@paulsingh
@paulsingh

#
@paulsingh

#

A (R)EVOLUTION IN THINKING
@paulsingh

#

RISK AND
UNCERTAINTY ARE
NOT THE SAME
@paulsingh

#

EARLY STAGE
STARTUPS
HAVE CHANGED
@paulsingh

#

CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING

STARTUP COSTS
LOWER THAN EVER
BUT SCALING STILL COSTS M...
@paulsingh

#

WEB GETS BIGGER.
WORLD GETS SMALLER.
@paulsingh

#

TRACTION IS THE NEW
INTELLECTUAL PROPERTY
PLATFORMS (SEARCH, SOCIAL & MOBILE) PRIMARILY DRIVING THE CHANGE....
@paulsingh

#

CAPITAL
INCREASINGLY
COMMODITIZED
RISE OF THE ANGELS, YO!
@paulsingh

#

NEW REALITY:
MONEY FOLLOWS
FOUNDERS
RISE OF THE ENTREPRENEURS, YO!
@paulsingh

#

SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
@paulsingh

#

SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
@paulsingh

#

TRANSPARENCY IS
SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
@paulsingh

#

WALL STREET
BEAT US TO IT
@paulsingh

#
@paulsingh

#

“

UBS PROPRIETARY
SATELLITE PARKING LOT
FILL RATE
POINTS TO AN
INTERESTING CADENCE
INTRA-QUARTER AND
POTEN...
@paulsingh

#
@paulsingh

#

“

TWICE A WEEK A SMALL
HELICOPTER CIRCLES
OVER CUSHING’S TANK
FARMS ON AN
INDUSTRY SPYING
MISSION
@paulsingh

#

WALL STREET
ISN’T ALONE
THESE TECHNIQUES ALREADY USED TO UNDERWRITE IN-VITRO
FERTILIZATION LENDING, PAYDAY ...
@paulsingh

#

IT TURNS OUT,

WE CAN DO IT, TOO
SURPRISE!
@paulsingh

#

+ “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.
@paulsingh

#

WE CAN DO IT, TOO.
@paulsingh

#

WE CAN DO IT, TOO.
@paulsingh

#

WE’RE DOING IT, TOO.
@paulsingh

#
@paulsingh

#

“ VENTURE CAPITAL IS
OPEN TO ATTACK BY
DISRUPTIVE NEW
BUSINESS MODELS AND
TECHNOLOGY.
-- NAVAL RAVIKANT (@n...
@paulsingh

#

dashboard.io
@paulsingh

#

dashboard.io
@paulsingh

#

EARLY STAGE VC
IS CHANGING
HAS CHANGED
@paulsingh

#

STATE OF THE ART IN EARLY
STAGE INVESTING IS NOT
VERY SOPHISTICATED
@paulsingh

#

UNBUNDLING OF
ADVICE, CONTROL
AND MONEY
@paulsingh

#

USED TO BE ABOUT
CAPITAL, DEALFLOW
AND JUDGEMENT
TODAY, IT’S ABOUT ACCESS.
@paulsingh

#
@paulsingh

#

INCREASINGLY ABOUT
DEAL SELECTION,
NOT DEAL SOURCING.
IT’S 2013, YO.
@paulsingh

#

dashboard.io
@paulsingh

#

(500) CHECKLIST
Product solves a problem for a specific target customer	

Capital-efficient businesses - oper...
@paulsingh

#

(NEW) FINANCINGS
Standardized terms	

No fixed amounts, no closings, no leads	

Continuous, not discrete rou...
@paulsingh

#

THE BUSINESS OF INVESTING
IS ABOUT CHOOSING THE
LEAST-WORST OPPORTUNITY
NOT TRYING TO PREDICT THE NEXT GOOG...
@paulsingh

#

THE FIRST CHECK SHOULD
BE SMALL AND FAST
DOUBLE DOWN HEAVY IF THE COMPANY SURVIVES INTO THE NEXT ROUND
@paulsingh

#

“

BY ITS NATURE, THE
INTERNET UNDERMINES
ANYONE WHOSE STATUS
DEPENDS ON
PRIVILEGED ACCESS TO
INFORMATION.
...
@paulsingh

#

THE PRIVATE MARKET IS
BECOMING MORE
ACCESSIBLE.
@paulsingh

#

THE PRIVATE MARKET IS
BECOMING MORE
TRANSPARENT.
@paulsingh

#

Demo Day Videos ⟹ livestream.com/500startups	

Sample Pitch Decks ⟹ slideshare.net/500startups	

Venture Ca...
@paulsingh

#

dashboard.io
@paulsingh

#

YOUR KEY TAKEAWAYS
Focus on Traction.	

Learn to Communicate and Inspire.
@paulsingh

ALSO...

#

Distribution > Product	

Tactics > Strategy	

Notability > Credibility	

Get on AngelList	

Raise ...
@paulsingh

#

THE BUSINESS OF
(TECH) STARTUPS
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)
LEARN MORE:
bit.ly/dashboard...
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The Business of (Tech) Startups - Challenge Cup

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Slides for my talk at 1776's Challenge Cup dinner in DC.

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The Business of (Tech) Startups - Challenge Cup

  1. @paulsingh # THE BUSINESS OF (TECH) STARTUPS THE RISE OF THE ANGELS (AND THE ENTREPRENEURS) PAUL SINGH @paulsingh
  2. @paulsingh # 500 STARTUPS @paulsingh
  3. @paulsingh #
  4. @paulsingh # A (R)EVOLUTION IN THINKING
  5. @paulsingh # RISK AND UNCERTAINTY ARE NOT THE SAME
  6. @paulsingh # EARLY STAGE STARTUPS HAVE CHANGED
  7. @paulsingh # CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING STARTUP COSTS LOWER THAN EVER BUT SCALING STILL COSTS MONEY
  8. @paulsingh # WEB GETS BIGGER. WORLD GETS SMALLER.
  9. @paulsingh # TRACTION IS THE NEW INTELLECTUAL PROPERTY PLATFORMS (SEARCH, SOCIAL & MOBILE) PRIMARILY DRIVING THE CHANGE. NO LONGER “GOOD ENOUGH” TO DEPEND ON TECH DIFFERENTIATION.
  10. @paulsingh # CAPITAL INCREASINGLY COMMODITIZED RISE OF THE ANGELS, YO!
  11. @paulsingh # NEW REALITY: MONEY FOLLOWS FOUNDERS RISE OF THE ENTREPRENEURS, YO!
  12. @paulsingh # SIGNALS ARE EVERYWHERE BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
  13. @paulsingh # SIGNALS ARE EVERYWHERE BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
  14. @paulsingh # TRANSPARENCY IS SIGNALS ARE EVERYWHERE BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
  15. @paulsingh # WALL STREET BEAT US TO IT
  16. @paulsingh #
  17. @paulsingh # “ UBS PROPRIETARY SATELLITE PARKING LOT FILL RATE POINTS TO AN INTERESTING CADENCE INTRA-QUARTER AND POTENTIAL UPSIDE TO OUR VIEW.
  18. @paulsingh #
  19. @paulsingh # “ TWICE A WEEK A SMALL HELICOPTER CIRCLES OVER CUSHING’S TANK FARMS ON AN INDUSTRY SPYING MISSION
  20. @paulsingh # 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.
  21. @paulsingh # IT TURNS OUT, WE CAN DO IT, TOO SURPRISE!
  22. @paulsingh # + “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.
  23. @paulsingh # WE CAN DO IT, TOO.
  24. @paulsingh # WE CAN DO IT, TOO.
  25. @paulsingh # WE’RE DOING IT, TOO.
  26. @paulsingh #
  27. @paulsingh # “ VENTURE CAPITAL IS OPEN TO ATTACK BY DISRUPTIVE NEW BUSINESS MODELS AND TECHNOLOGY. -- NAVAL RAVIKANT (@naval)
  28. @paulsingh # dashboard.io
  29. @paulsingh # dashboard.io
  30. @paulsingh # EARLY STAGE VC IS CHANGING HAS CHANGED
  31. @paulsingh # STATE OF THE ART IN EARLY STAGE INVESTING IS NOT VERY SOPHISTICATED
  32. @paulsingh # UNBUNDLING OF ADVICE, CONTROL AND MONEY
  33. @paulsingh # USED TO BE ABOUT CAPITAL, DEALFLOW AND JUDGEMENT TODAY, IT’S ABOUT ACCESS.
  34. @paulsingh #
  35. @paulsingh # INCREASINGLY ABOUT DEAL SELECTION, NOT DEAL SOURCING. IT’S 2013, YO.
  36. @paulsingh # dashboard.io
  37. @paulsingh # (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
  38. @paulsingh # (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
  39. @paulsingh # THE BUSINESS OF INVESTING IS ABOUT CHOOSING THE LEAST-WORST OPPORTUNITY NOT TRYING TO PREDICT THE NEXT GOOGLE, FACEBOOK OR LINKEDIN.
  40. @paulsingh # THE FIRST CHECK SHOULD BE SMALL AND FAST DOUBLE DOWN HEAVY IF THE COMPANY SURVIVES INTO THE NEXT ROUND
  41. @paulsingh # “ BY ITS NATURE, THE INTERNET UNDERMINES ANYONE WHOSE STATUS DEPENDS ON PRIVILEGED ACCESS TO INFORMATION. -- MICHAEL LEWIS
  42. @paulsingh # THE PRIVATE MARKET IS BECOMING MORE ACCESSIBLE.
  43. @paulsingh # THE PRIVATE MARKET IS BECOMING MORE TRANSPARENT.
  44. @paulsingh # 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
  45. @paulsingh # dashboard.io
  46. @paulsingh # YOUR KEY TAKEAWAYS Focus on Traction. Learn to Communicate and Inspire.
  47. @paulsingh ALSO... # 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
  48. @paulsingh # THE BUSINESS OF (TECH) STARTUPS THE RISE OF THE ANGELS (AND THE ENTREPRENEURS) LEARN MORE: bit.ly/dashboard-weekly @paulsingh
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