The Evolution of the Private Market - RV Meetup

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Slides for my talk at Real Ventures' founder meetup in Las Vegas.

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The Evolution of the Private Market - RV Meetup

  1. @paulsingh # THE EVOLUTION OF THE PRIVATE MARKET THE RISE OF THE ANGELS (AND THE ENTREPRENEURS) @paulsingh
  2. @paulsingh # 500 STARTUPS
  3. @paulsingh # A (R)EVOLUTION IN THINKING
  4. @paulsingh #RVmeetup # EARLY STAGE STARTUPS HAVE CHANGED
  5. @paulsingh #RVmeetup # CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING STARTUP COSTS LOWER THAN EVER BUT SCALING STILL COSTS MONEY
  6. @paulsingh #RVmeetup # WEB GETS BIGGER. WORLD GETS SMALLER.
  7. @paulsingh #RVmeetup # TRACTION IS THE NEW INTELLECTUAL PROPERTY PLATFORMS (SEARCH, SOCIAL & MOBILE) PRIMARILY DRIVING THE CHANGE. NO LONGER “GOOD ENOUGH” TO DEPEND ON TECH DIFFERENTIATION.
  8. @paulsingh #RVmeetup # CAPITAL INCREASINGLY COMMODITIZED RISE OF THE ANGELS, YO!
  9. @paulsingh #RVmeetup # NEW REALITY: MONEY FOLLOWS FOUNDERS RISE OF THE ENTREPRENEURS, YO!
  10. @paulsingh # SIGNALS ARE EVERYWHERE BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
  11. @paulsingh # SIGNALS ARE EVERYWHERE BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
  12. @paulsingh # TRANSPARENCY IS SIGNALS ARE EVERYWHERE BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
  13. @paulsingh # WALL STREET BEAT US TO IT
  14. @paulsingh #
  15. @paulsingh # “ UBS PROPRIETARY SATELLITE PARKING LOT FILL RATE POINTS TO AN INTERESTING CADENCE INTRA-QUARTER AND POTENTIAL UPSIDE TO OUR VIEW.
  16. @paulsingh #
  17. @paulsingh # “ TWICE A WEEK A SMALL HELICOPTER CIRCLES OVER CUSHING’S TANK FARMS ON AN INDUSTRY SPYING MISSION
  18. @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.
  19. @paulsingh # IT TURNS OUT, WE CAN DO IT, TOO SURPRISE!
  20. @paulsingh # + “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.
  21. @paulsingh # WE CAN DO IT, TOO.
  22. @paulsingh # WE CAN DO IT, TOO.
  23. @paulsingh # WE’RE DOING IT, TOO.
  24. @paulsingh #
  25. @paulsingh # “ VENTURE CAPITAL IS OPEN TO ATTACK BY DISRUPTIVE NEW BUSINESS MODELS AND TECHNOLOGY. -- NAVAL RAVIKANT (@naval)
  26. @paulsingh # indicate.io
  27. @paulsingh # indicate.io
  28. @paulsingh # EARLY STAGE VC IS CHANGING HAS CHANGED
  29. @paulsingh # STATE OF THE ART IN EARLY STAGE INVESTING IS NOT VERY SOPHISTICATED
  30. @paulsingh # UNBUNDLING OF ADVICE, CONTROL AND MONEY
  31. @paulsingh # USED TO BE ABOUT CAPITAL, DEALFLOW AND JUDGEMENT TODAY, IT’S ABOUT ACCESS.
  32. @paulsingh #
  33. @paulsingh # INCREASINGLY ABOUT DEAL SELECTION, NOT DEAL SOURCING. IT’S 2013, YO.
  34. @paulsingh # indicate.io
  35. @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
  36. @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
  37. @paulsingh # THE FIRST CHECK SHOULD BE SMALL AND FAST DOUBLE DOWN HEAVY IF THE COMPANY SURVIVES INTO THE NEXT ROUND
  38. @paulsingh #RVmeetup # RISK AND UNCERTAINTY ARE NOT THE SAME
  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 # ECONOMIC DEVELOPMENT HAS CHANGED
  41. @paulsingh # THE AGE OF THE INDUSTRIAL CITY IS OVER
  42. @paulsingh # NOW POSSIBLE TO BUILD BILLION DOLLAR COMPANIES IN T-SHIRTS FROM A COUCH
  43. @paulsingh # FROM ANYWHERE*
  44. @paulsingh “ # MORE THAN TRADITIONAL INDUSTRIES, KNOWLEDGE ECONOMY HAS AN INHERENT TENDENCY TOWARDS GEOGRAPHIC AGGLOMERATION ADVANTAGES MATTER, AND THE FUTURE DEPENDS HEAVILY ON THE PAST. ! THE SUCCESS OF A CITY FOSTERS MORE SUCCESS, AS COMMUNITIES THAT CAN ATTRACT SKILLED WORKERS AND GOOD JOBS TEND TO ATTRACT EVEN MORE. -- ENRICO MORETTI
  45. @paulsingh # NEAR PERFECT CORRELATION BETWEEN URBANIZATION AND PROSPERITY
  46. @paulsingh # NEAR PERFECT CORRELATION BETWEEN PRESENCE OF SMALL FIRMS AND THE LATER GROWTH OF A REGION*
  47. @paulsingh # TECH COMPANIES WILL NEVER CREATE THE MAJORITY OF JOBS
  48. @paulsingh # TECH COMPANIES HAVE A DISPROPORTIONATELY POSITIVE EFFECT ON THE ECONOMY
  49. @paulsingh # WHAT HAPPENS IN THE TECH SECTOR DETERMINES THE SALARY OF MOST PEOPLE, WHETHER THEY WORK IN TECH OR NOT
  50. @paulsingh “ # ALTHOUGH JOBS IN LOCAL SERVICES CONSTITUTE THE VAST MAJORITY OF JOBS, THEY ARE THE ECONOMIC GROWTH. -- ENRICO MORETTI
  51. @paulsingh # PROXIMITY IS VALUABLE
  52. @paulsingh # MODERN ECONOMIC DEV ! PEOPLE > STRUCTURES
  53. @paulsingh # INVESTORS: INVEST OUTSIDE YOUR REGION, BRING THE BEST FOUNDERS TO YOUR CITY
  54. @paulsingh # HUGE OPPORTUNITY AT THE POST-SEED, PRE-A LEVEL
  55. @paulsingh # “ BY ITS NATURE, THE INTERNET UNDERMINES ANYONE WHOSE STATUS DEPENDS ON PRIVILEGED ACCESS TO INFORMATION. -- MICHAEL LEWIS
  56. @paulsingh # THE PRIVATE MARKET IS BECOMING MORE ACCESSIBLE.
  57. @paulsingh # THE PRIVATE MARKET IS BECOMING MORE TRANSPARENT.
  58. @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
  59. @paulsingh # THE PRIVATE MARKET IS BECOMING MORE EFFICIENT.
  60. @paulsingh # YOUR KEY TAKEAWAYS Focus on Traction. Learn to Communicate and Inspire.
  61. @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: indicate.io
  62. @paulsingh # THE EVOLUTION OF THE PRIVATE MARKET THE RISE OF THE ANGELS (AND THE ENTREPRENEURS) LEARN MORE: bit.ly/dashboard-weekly @paulsingh

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