When we build companies, the model in our mind looks something like this…
I want to tell you a little story
A brilliant scientist, an inventor, and a businessperson walk into an elite university.
The scientist says to the inventor, hey this school project could actually be a great business. See what I made?
The inventor laughed and said that’s nothing, I invented modern computer visualization, haven’t you seen Toy Story?
The business person overhears the conversation and walks over for a look, seeing a product like none he’s ever imagined before, he joins the scientist and inventor and spin a new company out of the university to change the world.
Zillow
Founded in 2004
24-Oct-2005 - The company raised $32 million of Series A venture funding from Benchmark Capital (Bill Gurley) and Technology Crossover Ventures (Jay Hoag) on October 24, 2005. Brad Gerstner, Craig Sherman and Barney Harford also participated in this round.
25-Jul-2006 - The company raised $25 million of Series B venture funding led by PAR Capital Management on July 25, 2006. Benchmark Capital and Technology Crossover Ventures also participated.
118 employees
No word on valuation. This comes on the heels of a recent (and massive) distribution deal with Yahoo.
Zillow, essentially a mashup of maps and historical real estate sales information, has now raised a whopping $57 million in capital. Other than supporting their 118 employees, it’s unclear what they plan to do with the money. John Cook has good information on Zillow’s recent stats, noting that in June the company had 2.1 million unique visitors, ranking 11th among real estate Web sites.
20-Sep-2007 - The company raised $30 million of Series C venture funding led by Legg Mason Capital Management on September 20, 2007. Benchmark Capital, Technology Crossover Ventures and PAR Capital also participated.
155 employees
Pre-money Valuation: $370.00M Post Valuation: $400.00M
20-Jul-2011
The company raised $64.4 million in its initial public offering on NASDAQ Global Market under the ticker symbol Z on July 20, 2011. A total of 3,462,000 shares were sold at a price of $20 per share, making the total offering amount $69.24 million. After the offering, there was a total of 26,910,062 outstanding shares priced at $20 per share, putting the company's valuation at $538.2 million. The underwriters were granted an option to purchase up to an additional 519,300 shares from the company to cover over-allotments.
Raised to Date: $87.00M** Total Invested Equity: $64.39M
# of Shares: 3,462,000 Total Market Capital (End of Day): $962.57M
Who sold on IPO?
1. Barney Harford Full
2. Benchmark Capital Fund 1: Benchmark Capital Partners V % Company Still Held: 14.90%
3. Bradley Gerstner Full
4. ClearBridge
5. Craig Sherman Full
6. PAR Capital Management % Company Still Held: 8.80%
7. Technology Crossover Ventures Fund 1: Technology Crossover Ventures V % Company Still Held: 24.80%
If you were an early investor in this company and bought 1% around 2003,
You’d invest around $165,000
If you kept your 1% stake, investing more at each subsequent round
As you can see there were only two rounds
That last bar is an IPO
Let’s say you sold your shares as most investors in this company did at the IPO
It’s ten years into the life of the company and investors need to return money to their LPs
You’re $165,000 could be worth $17-18 Million – now the terms of all these investments aren’t exactly public so this is a guess
If you were an angel investor and bought that 1% with no LPs to return money to you could hold much longer.
Let’s say you held until now, that $165,000 is easily worth $67-68 Million
Who said we can’t grow unicorns here in Seattle?
Founded 2003
31-Aug-2004 - The company raised $5.09 million of Series A venture funding from New Enterprise Associates (Scott Sandell) on August 31, 2004, putting the company's pre-money valuation at $16.5 million.
Pre-money Valuation: $16.50M Post Valuation: $21.59M
% Acquired: 23.58%
08-Sep-2008 - The company raised $15.08 million of Series B financing from New Enterprise Associates on September 8, 2008, putting the pre-money valuation at $105.18 million. The company raised the funds to expand its development team and continue developing its data visualization and analytics products.
Pre-money Valuation: $105.18M Post Valuation: $120.26M
% Acquired: 12.54%
21-Oct-2010 - The Meritech Capital Partners acquired stake of company from New Enterprise Associate on October 21, 2010.
16-May-2013 - The company raised $144 million in its initial public offering on New York Stock Exchange under the ticker symbol DATA on May 16, 2013. Selling shareholders raised $92.3 million. The company offered 8,200,000 shares at $31 per share, making the total offering amount $254.2 million. After the offering, there was a total of 57,514,508 outstanding shares at $31 per share, putting the company's valuation at $1.8 billion.
# of Employees: 834
# of Shares: 8,200,000 Total Market Capital (End of Day): $1.78B
Seller/Exiter Name
1. Meritech Capital Partners Full Fund 1: Meritech Capital Partners III % Company Still Held: 6.61%
2. New Enterprise Associates Full Fund 1: New Enterprise Associates 11 % Company Still Held: 35.08%
They’re not the only ones
Isilon
Concur
Nanostring Tech
Immune Design
Zillow
EagleView
Trupanion
Zulilly
Big Fish Games
Nile
Blue Box Group
Cobalt Group
Symform
Qpass
Who’s next?
Apptio
Redfin
Docusign
Inrix
LiquidPlanner
Avvo
Avalara
Tune
HasOffers
Mission to inspire Seattle innovators and entrepreneurs to think bigger!
We’re at a unique time in the world now, Marc Andreesen likes to say that software is eating the world
I disagree – the process of writing software, the scientific approach to testing defined processes and then iterating on those processes has taken over every aspect of our lives
I like to think of the time we’re in as the period of softwarization
The Renaissance 14th-16th centuries: Science and art mashups – creation of modern banking
Medici banking family
Traders from the Middle ages creating companies
Wealth funding art and innovation – printing press, DaVinci
The Enlightenment 18th century: Broad access to scientific thinking – Investing re-born
South Sea Bubble, Mississippi Company Bubble
Adam Smith
The Softwarization 21st century: Science and technology mashups – Removal of intermediaries
Wisdom of crowds (Uber, LendingClub, AngelList, Kickstarter)
LBOs, Tech Bubble, Lending Bubble, ETFs, JOBS Act
Today we’re hacking food – Soylent, we’re hacking space flight, we’re hacking dieting, and we’re hacking software
http://faculty.ucc.edu/egh-damerow/renaissance.htm
http://www.italian-renaissance-art.com/Italian-renaissance.html
http://www.flowofhistory.com/category/export/html/40
https://en.wikipedia.org/wiki/History_of_banking
https://en.wikipedia.org/wiki/Italian_Renaissance
https://voltairefoundation.wordpress.com/2014/05/15/the-trouble-with-money-crashes-recoinage-and-war-in-the-enlightenment/
https://en.wikipedia.org/wiki/Age_of_Enlightenment
https://en.wikipedia.org/wiki/Contemporary_philosophy
Began with
Software enables cutting out the middle man
The cost to build a digital business drops inverse to Moore’s Law
A culture of hackers inspires rethinking in every industry
Will end when
Like DaVinci, our idealized Renaissance man – people in our culture of softwarization have idols too
Meet Dan
I met Dan in 2005 when he launched Ontela, four years later he sold Ontela to Photobucket.
Turned around and built Sparkbuy in 2010… which he sold Google in a few months
Then Dan goes nuts… creates one of the most successful crowdfunding campaigns for a board game – yeah Dan turned around and built a board game.
Software startup, software startup, board game….
Then he wrote a book – you should buy it.
Now he’s launched a freakin replicator! Well Glowforge is as close as we’ve come.
Building a device where you can insert a photo and a piece of wood and out pops an etching of the photo on the wood is as close to a freakin replicaticator as we’ve come. But what is it about our appetite in the NorthWest that took Dan so long to come upon a really big idea?
As we’ve seen there are a lot of amazingly big ideas being built right here in Seattle from the startups to innovators at larger corporations
This is what living in the culture of softwarization looks like. Science has been brought into everyday life, we A/B test our coffee, we get user feedback on our clothing…. And facial expressions.
The culture of softwarization isn’t gender or age specific – but it does dream BIG.
Re-thinking every industry
The culture of softwarization reaches everyone – Stay at home Mom’s are selling their crafts on Etsy, Stay at home Dad’s are selling their books on Amazon, Full time workers are driving people around on the weekends for cash or designing logos and websites in their spare time.
We’re hacking the way we make food, the way we invest our money, and the way we practice philanthropy.
Where are we today angel investing in the Northwest?
Here’s a glimpse of the Seed and A rounds in the Northwest (including BC) over the last 12 months. A lot of the early stage investment data isn’t public so these are just a snapshot to get a sense for what’s happening
174 companies
With the exception of Porch, the round sizes are lower on average than the bay area or the Northeast with Payfirma and GroupLend being the two larger ones here in Vancouver
We only have one really active venture fund and a bunch of active angel groups and angel investors. Luckily we’re seeing venture partners from DFJ, a16z, and others open field offices up here. We’re also seeing a proliferation of MicroVCs from angel group sidecar funds to a growing number of people starting their own $5-10M venture fund
Let’s see how we stack up against the other regions
Where are we today angel investing in the Northwest?
Here’s a glimpse of the Seed and A rounds in the Northwest (including BC) over the last 12 months. A lot of the early stage investment data isn’t public so these are just a snapshot to get a sense for what’s happening
174 companies
With the exception of Porch, the round sizes are lower on average than the bay area or the Northeast with Payfirma and GroupLend being the two larger ones here in Vancouver
We only have one really active venture fund and a bunch of active angel groups and angel investors. Luckily we’re seeing venture partners from DFJ, a16z, and others open field offices up here. We’re also seeing a proliferation of MicroVCs from angel group sidecar funds to a growing number of people starting their own $5-10M venture fund
Let’s see how we stack up against the other regions
Where are we today angel investing in the Northwest?
Here’s a glimpse of the Seed and A rounds in the Northwest (including BC) over the last 12 months. A lot of the early stage investment data isn’t public so these are just a snapshot to get a sense for what’s happening
174 companies
With the exception of Porch, the round sizes are lower on average than the bay area or the Northeast with Payfirma and GroupLend being the two larger ones here in Vancouver
We only have one really active venture fund and a bunch of active angel groups and angel investors. Luckily we’re seeing venture partners from DFJ, a16z, and others open field offices up here. We’re also seeing a proliferation of MicroVCs from angel group sidecar funds to a growing number of people starting their own $5-10M venture fund
Let’s see how we stack up against the other regions
Builders (engineers, scientists, analysts)
Every investor ranked the team as one of the most critical aspects
Relationships (partners, investors, customers, and so on)
Boss v Investor
Every investor ranked relationships in the top three most important
A way of planning and achieving milestones (lean, agile, and so on)
Every investor ranked execution in the top three most important
A vision/appetite – lifestyle, new category, disruptive, or change the fucking world?
Startup investors get this and corporate managers don’t – this is due to principle agent problem
Investors self-select to the vision/appetite they like; however, many managers are just doing their job.
A vision/appetite – lifestyle, new category, disruptive, or change the fucking world?
Startup investors get this and corporate managers don’t – this is due to principle agent problem
Investors self-select to the vision/appetite they like; however, many managers are just doing their job.
Boss v Investor
Every investor ranked relationships in the top three most important
