4. @paulsingh @betamore
EARLY STAGE
STARTUPS
HAVE CHANGED
5. @paulsingh @betamore
CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING
STARTUP COSTS
LOWER THAN EVERBUT SCALING STILL COSTS MONEY
6. @paulsingh @betamore
WEB GETS BIGGER.
WORLD GETS SMALLER.
7. @paulsingh @betamore
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 @betamore
CAPITAL
INCREASINGLY
COMMODITIZED
RISE OF THE ANGELS, YO!
9. @paulsingh @betamore
NEW REALITY:
MONEY FOLLOWS
FOUNDERS
RISE OF THE ENTREPRENEURS, YO!
10. @paulsingh @betamore
SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
11. @paulsingh @betamore
SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
12. @paulsingh @betamore
TRANSPARENCY IS
SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
13. @paulsingh @betamore
WALL STREET
BEAT US TO IT
15. @paulsingh @betamore
“ UBS PROPRIETARY
SATELLITE PARKING LOT
FILL RATE ANALYSIS
POINTS TO AN
INTERESTING CADENCE
INTRA-QUARTER AND
POTENTIAL UPSIDE TO
OUR VIEW.
17. @paulsingh @betamore
“
TWICE A WEEK A SMALL
HELICOPTER CIRCLES
OVER CUSHING’S TANK
FARMS ON AN OIL
INDUSTRY SPYING
MISSION.
18. @paulsingh @betamore
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 @betamore
IT TURNS OUT,
WE CAN DO IT, TOO SURPRISE!
26. @paulsingh @betamore
“ VENTURE CAPITAL IS
OPEN TO ATTACK BY
DISRUPTIVE NEW
BUSINESS MODELS AND
TECHNOLOGY.
-- NAVAL RAVIKANT (@naval)
27. @paulsingh @betamore
EARLY STAGE VC
IS CHANGING
HAS CHANGED
28. @paulsingh @betamore
STATE OF THE ART IN EARLY
STAGE INVESTING IS NOT
VERY SOPHISTICATED
29. @paulsingh @betamore
UNBUNDLING OF
ADVICE, CONTROL
AND MONEY
30. @paulsingh @betamore
USED TO BE ABOUT
CAPITAL, DEALFLOW
AND JUDGEMENT
TODAY, IT’S ABOUT ACCESS.
31. @paulsingh @betamore
(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
34. @paulsingh @betamore
(NEW) FINANCINGS
Standardized terms
No fixed amounts, no closings, no leads
35. @paulsingh @betamore
(NEW) FINANCINGS
Standardized terms
No fixed amounts, no closings, no leads
Continuous, not discrete rounds
36. @paulsingh @betamore
(NEW) FINANCINGS
Standardized terms
No fixed amounts, no closings, no leads
Continuous, not discrete rounds
Prices beginning to float
37. @paulsingh @betamore
(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
38. @paulsingh @betamore
(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
39. @paulsingh @betamore
“ BY ITS NATURE, THE
INTERNET UNDERMINES
ANYONE WHOSE STATUS
DEPENDS ON
PRIVILEGED ACCESS TO
INFORMATION.
-- MICHAEL LEWIS
40. @paulsingh @betamore
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
45. @paulsingh @betamore
ALSO...
Think about distribution a lot
46. @paulsingh @betamore
ALSO...
Think about distribution a lot
Focus on customer acquisition
47. @paulsingh @betamore
ALSO...
Think about distribution a lot
Focus on customer acquisition
Get on AngelList
48. @paulsingh @betamore
ALSO...
Think about distribution a lot
Focus on customer acquisition
Get on AngelList
Learn the basics of VC economics
49. @paulsingh @betamore
ALSO...
Think about distribution a lot
Focus on customer acquisition
Get on AngelList
Learn the basics of VC economics
Raise 12-18 months of funding
50. @paulsingh @betamore
THE RISE OF THE ANGELS
(AND THE ENTREPRENEURS)
PAUL SINGH
@paulsingh・paul@500startups.com・resultsjunkies.com