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the evolution of the private market - cleveland ew

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Slides for my talk at Cleveland Entrepreneur Week.

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the evolution of the private market - cleveland ew

  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 # EARLY STAGE STARTUPS HAVE CHANGED
  5. @paulsingh # CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING STARTUP COSTS LOWER THAN EVER BUT SCALING STILL COSTS MONEY
  6. @paulsingh # WEB GETS BIGGER. WORLD GETS SMALLER.
  7. @paulsingh # 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 # CAPITAL INCREASINGLY COMMODITIZED RISE OF THE ANGELS, YO!
  9. @paulsingh # 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 # 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 # NOW POSSIBLE TO BUILD BILLION DOLLAR COMPANIES IN T-SHIRTS FROM A COUCH
  42. @paulsingh # FROM ANYWHERE
  43. @paulsingh # NEAR PERFECT CORRELATION BETWEEN URBANIZATION AND PROSPERITY
  44. @paulsingh # PROXIMITY IS VALUABLE
  45. @paulsingh # MODERN ECONOMIC DEV ! PEOPLE > STRUCTURES
  46. @paulsingh # “ BY ITS NATURE, THE INTERNET UNDERMINES ANYONE WHOSE STATUS DEPENDS ON PRIVILEGED ACCESS TO INFORMATION. -- MICHAEL LEWIS
  47. @paulsingh # THE PRIVATE MARKET IS BECOMING MORE ACCESSIBLE.
  48. @paulsingh # THE PRIVATE MARKET IS BECOMING MORE TRANSPARENT.
  49. @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
  50. @paulsingh # YOUR KEY TAKEAWAYS Focus on Traction. Learn to Communicate and Inspire.
  51. @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
  52. @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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