Guest lecture at University of Miami Business School on Venture Capital Industry and how it has evolved over last 20 years. Case discussions on Unicorns, TomoTherapy, InfoBlox, JUUL Labs, and AllBirds

1. Snap Shot of Venture Capital Industry
February 25, 2019
Alex Tang

2. IPD Capital – Strategic IP Excellence Comes With our Capital
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• IPD Capital enhances the intellectual property (IP) strategy of the companies invested to make them more successful and
improve their investment return potential.
• We do not take a board seat or encumber the existing patent portfolio. Our board-level, strategic IP advice comes free with our
investment money.

3. Quick Straw Poll: When I grow up, I want to be…
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•an Entrepreneur?
•in Financial Services?
•in Corporate Finance?
•a Public Market Investor?
•a Private Market Investor?
•Other?

4. Hi! Just a Quick Few Things About Me…
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• Vice President, IPD Capital
• Former Licensing and Commercialization Manager at Gas Technology Institute
• Former Vice President of Programs and Finance at Clean Energy Trust
• Co-Founder of Invention Bridge, a technology commercialization company
• More than 10 years commercialization and venture capital experience
• MBA (University of Chicago); M.S., B.S. Mechanical Engineering (University of Illinois at Urbana-Champaign)
• Some other career highlights:
• Argonne Venture Accelerator Consortium – Department of Energy EIR2 Grant
• Private equity experience with McNally Capital and MVC Capital
• Senior Manager at STAX, a consulting firm performing due diligence on private equity and venture capital deals in North
America and China.
• Early Stage Venture Capital experience with Open Prairie Ventures where we spun out technologies from University of
Illinois at Urbana-Champaign, University of Illinois at Chicago, and University of Wisconsin Madison
• Other info:
• Founding Venture Partner at NextGen Angels
• Catalyst Cleantech Advisor to Wisconsin Alumni Research Foundation (WARF)
• Member of the Asian American Alternative Investment Managers Association
• Served on the Entrepreneurial Committee of the Association for Corporate Growth Chicago and former Board of Director
and Co-Chair of the Venture Capital/Cleantech Committee
• Former IT/Cleantech Kauffman Fellows Finalist

5. Career Path Into Venture Capital
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• No set pathway – Google “how do I get into venture capital”
• Timing matters: 800 firms today, down from over 1,000 just a few years ago
• What can I do to build out my skill set?
• Read a lot about the market: Techcrunch, Crunchbase, CB Insights, Pitchbook, etc.
• Mentorship: If can’t find someone directly, read blogs: Fred Wilson, Mark Suster, etc.
• Join a venture backed startup to see how startups grow…and see a successful liquidity event
• Start your own company…and create a successful liquidity event or use as an investment platform
• Get involved with Angel groups or investment groups
• Plan to go to a top MBA program and expand your network.

6. Circle of Life: Venture Capital Funding Cycle
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LIMITED PARTNERS (LPs)
• Typically Pension Funds, Endowments,
High Net Worth Investors
• Return on Investment metric are Internal
Rate of Return (IRR) and Cash on Cash
Return (CoC)
GENERAL PARTNERS (GPs)
• Partners who are entrusted to invest LP’s
money and to return capital at a future
point in time.
• Manage investment pool called Fund I,
Fund II, Fund III, etc.
PORTFOLIO COMPANIES
• Entrepreneurs you back

7. Does the Past Predict the Future?
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Source: http://www.ipo-dashboards.com/wordpress/2009/08/how-long-does-it-take-to-build-a-technology-empire/ Based on 100 top public Software companies Q1 2009
VC’s like to exit in this range…if not sooner
“100 Top Public Software Companies Revenue Growth as of Q1 2009”

8. SaaS Business Model Establishes a Known Growth Playbook…
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Source: https://medium.com/parisoma-blog/roadmap-to-a-saas-ipo-unicorning-your-way-to-100m-revenue-33e065ce7548

9. …Which Spilled Into the Public Markets
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Source: https://medium.com/parisoma-blog/roadmap-to-a-saas-ipo-unicorning-your-way-to-100m-revenue-33e065ce7548
Winner takes all?

10. Unicorns are Everywhere…
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Source: https://blog.capitalogix.com/public/2017/03/unicorns-are-becoming-a-not-so-mythical-creature.html

11. …And Time to Unicorn Valuation is Faster then Ever
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Source: https://www.cbinsights.com/research/fastest-unicorns-valuation-startups/

12. Building a Successful Tech Company is Still Very Very Hard
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Source: https://www.cbinsights.com/research/venture-capital-funnel-2/

13. What will 2019 Bring for Unicorns?
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Source: https://www.thestreet.com/technology/biggest-tech-ipos-to-watch-for-in-2019-14802091
https://news.crunchbase.com/news/global-unicorn-exits-hit-multi-year-high-in-2018/

14. Let’s Talk Lessons Learned from Early 2000 Versus Today
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• TomoTherapy:
• Spun out of University of Wisconsin-Madison
• IPO 2007 – Market Cap ~$800M
• Acquired 2011 by AccuRay for ~$277M
• InfoBlox:
• Founder was at National Center for Data Mining
• Backed by Sequoia Capital and moved from Chicago to Silicon Valley
• IPO 2012 – Market Cap ~$1.1B
• Acquired 2016 by Vista Equity Partners for ~$1.6B
• JUUL:
• Altria takes 35% stake in JUUL Labs; valuing the company at $38B
• AllBirds:
• Sustainable Investing
I can only speak about publicly disclosed information!

15. How Has Venture Changed Over 20 years?
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• Profitability versus Growth
• Winner Take All? What do Mega rounds ($100M+) signal?
• Exits still matter…IPO, M&A, Private Equity?
Questions?

16. Contact Information
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Alex Tang
atang@ipdcapital.com
@alexdtang
linkedin.com/in/alexdtang