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PreMoney 2018 - Jeff Harbach Keynote

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Jeff Harbach of Kauffman Fellows provided the opening keynote at 500 Startups PreMoney Investor Conference 2018.

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PreMoney 2018 - Jeff Harbach Keynote

  1. 1. Jeff Harbach CEO, Kauffman Fellows @jeffharbach VC’s Role in the Global Economy
  2. 2. Visionary People + Visionary Capital = Global Prosperity (*and returns)
  3. 3. How?
  4. 4. Andras Forgacs Modern Meadow
  5. 5. Confidential X “ENTREPRENEURS BEST EXPRESS THE HUMAN SPIRIT.” -Ewing Marion Kauffman
  6. 6. Confidential XSOURCE: GEDI 2017 Global Entrepreneurship Index CAPITAL FORMATION GEI vs. GDP
  7. 7. Confidential X JobsCreated(M) -4 -3 -2 -1 0 1 2 3 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Young (0-5 Years) Maturing (6-10 Years) Older (11+ Years) Number of Jobs Created by Age of Firm SOURCE: Kauffman Foundation, The Importance of Young Firms for Economic Growth JOB CREATION
  8. 8. Confidential X GEI & Potential Contribution to Global GDP GDPNominal(Tof$) 0 7.5 15 22.5 30 10% lift for 
 entrepreneurs US GDP China GDP Russia $2T $12T $19T $22T GLOBAL GROWTH SOURCE: GEDI 2017 Global Entrepreneurship Index
  9. 9. 19951994 1996
  10. 10. $0B $20B $40B $60B $80B $100B $120B 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 1 2 3 4 5 6 Annual Capital Deployed to U.S. Startups (All Stages) vs. Internet Users CapitalRaisedbyU.S.Startups InternetUsers(inBillions)
  11. 11. Confidential X DollarsInvested($M) 0 75,000 150,000 225,000 300,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 US Israel Europe Canada Japan India China OTHER MAJOR GEOGRAPHIES HAVE MATURED SINCE 2001 BUBBLE SOURCE: VentureSource 2000/2001 Tech Bubble
  12. 12. Confidential X IN 2000, THE US LED GLOBAL VENTURE INVESTING 20% 80% GLOBAL VC INDUSTRY HAS MATURED SINCE 2001 BUBBLE
  13. 13. Confidential X IN 2012, THE US STILL LED GLOBAL VENTURE INVESTING 33% 67% GLOBAL VC INDUSTRY HAS MATURED SINCE 2001 BUBBLE
  14. 14. Confidential X TODAY, GIVEN DISTRIBUTION OF OPPORTUNITY, INVESTMENT HAS SHIFTED 54% 46% GLOBAL VC INDUSTRY HAS MATURED SINCE 2001 BUBBLE
  15. 15. Confidential X GLOBAL VENTURE CAPITAL AT THE DEAL LEVEL SOURCE: PROPRIETARY DATASET %ofDealsDone 0% 15% 30% 45% 60% Realized Multiple by Bucket, Gross 0X-1X 1X-5X 5X-10X 10X+ 7%7% 28% 58% Average RM: 36X GROSS REALIZED MULTIPLE (1Q98-2Q17, N=33,281)
  16. 16. smart connected capitalinvestors
  17. 17. creative humble curious self-aware trustworthy vulnerable candor transparent life-long learner innovative leader teachable empathetic
  18. 18. 35% 65% human dynamics product or market issues “Sixty-five percent of startup failures are due to human dynamics.” Noam Wasserman, HBS Author, The Founder’s Dilemma
  19. 19. The entrepreneur market product
  20. 20. market product market product vision boardtalent capital networkcustomers
  21. 21. market product vision boardtalent capital networkcustomers
  22. 22. The investor
  23. 23. Confidential X RAISING THE BAR IN VENTURE CAPITAL IDENTIFY SCREEN ACCELERATE
  24. 24. Confidential X 5%1% Strong personal brand Behavioral fitness Radical self belief Novel investment thesis
  25. 25. Confidential X Wrong Deal Right Deal Consensus Non-Consensus 0x 0x 2x 10x+
  26. 26. trust + diversity = better outcomes
  27. 27. Lack of diversity and who get’s funded U.S. Venture 14% 51% 86% 49% U.S. Venture 3% 2% 19% 2% 12% 26% 6% 71% 60% 9% Female partners at US venture capital firms 25% Female founded startups raise capital vs. 50% of men 170 Total female investing partners 1 Average number of female partners per top 100 fund 1% Venture capital that went to Hispanic & African American founders 1% Black & Hispanic partners at US venture capital firms 12% 19% 2% 2% Male Female Female Male White White Asian Asian Hispanic Black Other Black Hispanic
  28. 28. We want to take this to the next level. Kauffman Fellows 25% Class 23 9% 35% 10% Industry 9% 1% 5 Year Industry Impact 5+% Women Historically Underrepresented Groups 5+%
  29. 29. the greatest problems in the world will be solved by talented, driven, diverse, visionary entrepreneurs…
  30. 30. …and the visionary investors like you who will fuel that innovation

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