TheFunded Entrepreneurship 2.0

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Presentation delivered to Harvard and MIT in March, 2009.

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TheFunded Entrepreneurship 2.0

  1. 1. Entrepreneurship 2.0 Everything has Changed. March, 2009
  2. 2. EVERYTHING HAS CHANGED
  3. 3. 13 years ago to today is… a career of no market value?!?
  4. 4. NO! This collapse = death of old ideas, markets, and models!
  5. 5. CHANGE = GOOD FOR STARTUPS
  6. 6. DOWN WITH THE OLD IDEAS! R.I.P. R.I.P. R.I.P.
  7. 7. BUILD? is it a good time to
  8. 8. Everything has changed <ul><li>POINT 1: Financing has collapsed </li></ul>
  9. 9. IT’S NYSE HERE! worrying about mortgage payments vactioning in war torn public markets spending their last dollar to hit a home run
  10. 10. Venture capital <ul><li>Funds get committed on paper from Limited Partners (LPs) – Endowments, Pensions </li></ul><ul><li>VCs make capital calls from LPs to fund a company through liquidity, creating reserves </li></ul><ul><li>VCs earn management fees and carry only as money is actually invested </li></ul>
  11. 11. has died… <ul><li>Limited Partner liquidity crisis </li></ul><ul><ul><li>No cash for capital calls </li></ul></ul><ul><li>Under-reserved funds for existing portfolio </li></ul><ul><ul><li>Expected participation by others funds </li></ul></ul><ul><li>Collpased secondary market for LP positions </li></ul><ul><ul><li>4 sellers : 1 buyer, LPs paying to drop positions </li></ul></ul><ul><li>Regulatory pressure for mark-to-market </li></ul><ul><ul><li>FAS 157 collapsing reported portfolio valuations </li></ul></ul>
  12. 12. Everything has changed
  13. 13. Market pain is your gain <ul><li>Declining cost of processing power </li></ul><ul><ul><li>Cheap Hardware, Cloud Resources </li></ul></ul><ul><li>Open source and free software </li></ul><ul><ul><li>The Open OS, The Free Productivity Suite </li></ul></ul><ul><li>Declining labor costs </li></ul><ul><ul><li>Crowdsourcing, Global Talent Pools </li></ul></ul><ul><li>Abundant real estate </li></ul><ul><ul><li>The Commercial Crash of 2009 </li></ul></ul>
  14. 14. Everything has changed
  15. 15. People are seeking solutions <ul><li>Massive industry failures </li></ul><ul><ul><li>Banking, insurance, media </li></ul></ul><ul><li>New ideas are needed </li></ul><ul><ul><li>Traditional businesses have land less to lose </li></ul></ul><ul><li>The end of the old ideas </li></ul><ul><ul><li>Older generations are losing their grip… </li></ul></ul>
  16. 16. Everything has changed
  17. 17. The career is dead <ul><li>Freelance workforce </li></ul><ul><ul><li>The “Gig”economy, Passion careers </li></ul></ul><ul><li>Distributed teams </li></ul><ul><ul><li>The best person for a task </li></ul></ul><ul><li>Working remotely </li></ul><ul><ul><li>The customized home office (seaside) </li></ul></ul><ul><li>Upside compensation </li></ul><ul><ul><li>Earn equity, Share profilt </li></ul></ul>
  18. 18. Everything has changed
  19. 19. BUILD! yes,
  20. 20. Entrepreneur 2.0 Traction Path <ul><li>The Idea </li></ul><ul><li>The Team </li></ul><ul><li>Prototype </li></ul><ul><li>The Launch </li></ul><ul><li>Adoption </li></ul><ul><li>Revenue </li></ul><ul><li>Profitability </li></ul>
  21. 21. Entrepreneur 2.0 Financing Model <ul><li>Customer Financing </li></ul><ul><ul><li>Sell features, Front-load contracts for warrants </li></ul></ul><ul><li>Vendor Financing </li></ul><ul><ul><li>Payment terms, Barter, and Promotion </li></ul></ul><ul><li>Employee Financing </li></ul><ul><ul><li>Deffered compensation, Profilt sharing </li></ul></ul>
  22. 22. Entrepreneur 2.0 Credo FAILURE IS NOT AN OPTION

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