Slides for my talk at Cleveland Entrepreneur Week.

1. @paulsingh
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THE EVOLUTION OF THE
PRIVATE MARKET
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)
@paulsingh

2. @paulsingh
#
500 STARTUPS

3. @paulsingh
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A (R)EVOLUTION IN THINKING

4. @paulsingh
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EARLY STAGE
STARTUPS
HAVE CHANGED

5. @paulsingh
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CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING
STARTUP COSTS
LOWER THAN EVER
BUT SCALING STILL COSTS MONEY

6. @paulsingh
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WEB GETS BIGGER.
WORLD GETS SMALLER.

7. @paulsingh
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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
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CAPITAL
INCREASINGLY
COMMODITIZED
RISE OF THE ANGELS, YO!

9. @paulsingh
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NEW REALITY:
MONEY FOLLOWS
FOUNDERS
RISE OF THE ENTREPRENEURS, YO!

10. @paulsingh
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SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

11. @paulsingh
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SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

12. @paulsingh
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TRANSPARENCY IS
SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

13. @paulsingh
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WALL STREET
BEAT US TO IT

14. @paulsingh
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15. @paulsingh
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“
UBS PROPRIETARY
SATELLITE PARKING LOT
FILL RATE
POINTS TO AN
INTERESTING CADENCE
INTRA-QUARTER AND
POTENTIAL UPSIDE TO
OUR VIEW.

16. @paulsingh
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17. @paulsingh
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“
TWICE A WEEK A SMALL
HELICOPTER CIRCLES
OVER CUSHING’S TANK
FARMS ON AN
INDUSTRY SPYING
MISSION

18. @paulsingh
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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
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IT TURNS OUT,
WE CAN DO IT, TOO
SURPRISE!

20. @paulsingh
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+ “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.

21. @paulsingh
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WE CAN DO IT, TOO.

22. @paulsingh
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WE CAN DO IT, TOO.

23. @paulsingh
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WE’RE DOING IT, TOO.

24. @paulsingh
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25. @paulsingh
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“ VENTURE CAPITAL IS
OPEN TO ATTACK BY
DISRUPTIVE NEW
BUSINESS MODELS AND
TECHNOLOGY.
-- NAVAL RAVIKANT (@naval)

26. @paulsingh
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indicate.io

27. @paulsingh
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indicate.io

28. @paulsingh
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EARLY STAGE VC
IS CHANGING
HAS CHANGED

29. @paulsingh
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STATE OF THE ART IN EARLY
STAGE INVESTING IS NOT
VERY SOPHISTICATED

30. @paulsingh
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UNBUNDLING OF
ADVICE, CONTROL
AND MONEY

31. @paulsingh
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USED TO BE ABOUT
CAPITAL, DEALFLOW
AND JUDGEMENT
TODAY, IT’S ABOUT ACCESS.

32. @paulsingh
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33. @paulsingh
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INCREASINGLY ABOUT
DEAL SELECTION,
NOT DEAL SOURCING.
IT’S 2013, YO.

34. @paulsingh
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indicate.io

35. @paulsingh
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(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
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(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
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THE FIRST CHECK SHOULD
BE SMALL AND FAST
DOUBLE DOWN HEAVY IF THE COMPANY SURVIVES INTO THE NEXT ROUND

38. @paulsingh
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RISK AND
UNCERTAINTY ARE
NOT THE SAME

39. @paulsingh
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THE BUSINESS OF INVESTING
IS ABOUT CHOOSING THE
LEAST-WORST OPPORTUNITY
NOT TRYING TO PREDICT THE NEXT GOOGLE, FACEBOOK OR LINKEDIN.

40. @paulsingh
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ECONOMIC
DEVELOPMENT
HAS CHANGED

41. @paulsingh
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NOW POSSIBLE TO BUILD
BILLION DOLLAR
COMPANIES IN T-SHIRTS
FROM A COUCH

42. @paulsingh
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FROM ANYWHERE

43. @paulsingh
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NEAR PERFECT
CORRELATION BETWEEN
URBANIZATION AND
PROSPERITY

44. @paulsingh
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PROXIMITY IS
VALUABLE

45. @paulsingh
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MODERN ECONOMIC DEV
!
PEOPLE > STRUCTURES

46. @paulsingh
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“
BY ITS NATURE, THE
INTERNET UNDERMINES
ANYONE WHOSE STATUS
DEPENDS ON
PRIVILEGED ACCESS TO
INFORMATION.
-- MICHAEL LEWIS

47. @paulsingh
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THE PRIVATE MARKET IS
BECOMING MORE
ACCESSIBLE.

48. @paulsingh
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THE PRIVATE MARKET IS
BECOMING MORE
TRANSPARENT.

49. @paulsingh
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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
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YOUR KEY TAKEAWAYS
Focus on Traction.
Learn to Communicate and Inspire.

51. @paulsingh
ALSO...
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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