500StartupsInvestorDeck

1,807 views

Published on

Published in: Technology
0 Comments
6 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,807
On SlideShare
0
From Embeds
0
Number of Embeds
445
Actions
Shares
0
Downloads
0
Comments
0
Likes
6
Embeds 0
No embeds

No notes for slide
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • Ability to select Good Companies, Survivorship rates and Exits...\n\nIncomm acquired GroupCard (prob $5M)\nNutshell acquired by constant contact\nWeardrobe Acquired by Like.com then Google\n
  • \n
  • \n
  • Andrew Braccia (Accel)\nJim Breyer (Accel)\nSatish Dharmaraj (Redpoint)\nChris Moore (Redpoint)\nJonathan Ebinger (Blue Run Ventures)\nJohn Malloy (Blue Run Ventures)\n\n\n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • 500StartupsInvestorDeck

    1. 1. 500 Startups Fund I Ideas Inc. Spoondate Founders meetwith investor McClure, right PRIVATE: NOT FOR DISTRIBUTION
    2. 2. Legal NoticeTHIS PRESENTATION IS BEING DELIVERED TO PROSPECTIVE INVESTORS ON A CONFIDENTIAL BASIS SO THAT THEY MAY CONSIDER AN INVESTMENT IN PIRATE FUND I, L.P. (THE "FUND"). THESEMATERIALS DO NOT PURPORT TO BE ALL-INCLUSIVE OR TO CONTAIN ALL THE INFORMATION THAT A PROSPECTIVE INVESTOR MAY DESIRE IN INVESTIGATING THE FUND. THESE MATERIALS AREMERELY FOR PRELIMINARY DISCUSSION ONLY AND MAY NOT BE RELIED UPON FOR MAKING ANY INVESTMENT DECISION WITH RESPECT TO THE FUND. RATHER, PROSPECTIVE INVESTORS SHOULDRELY ON THE DEFINITIVE LIMITED PARTNERSHIP AGREEMENT OF THE FUND (THE "PARTNERSHIP AGREEMENT") AND THEIR OWN INDEPENDENT INVESTIGATION OF THE FUND, THE FUND’S GENERALPARTNER (THE “GENERAL PARTNER”), ITS FAMILY OF FUNDS AND THE MANAGERS THEREOF AS THE BASIS FOR MAKING AN INVESTMENT IN THE FUND.THIS PRESENTATION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PARTNERSHIP AGREEMENT. IN ORDER TO EFFECTUATE ITS INVESTMENT IN THE FUND, A PROSPECTIVE INVESTOR WILLBE REQUIRED TO EXECUTE THE PARTNERSHIP AGREEMENT AND OTHER SUBSCRIPTION DOCUMENTS, AS APPLICABLE. IN THE EVENT THAT ANY OF THE TERMS OF THIS PRESENTATION AREINCONSISTENT WITH OR CONTRARY TO THE PARTNERSHIP AGREEMENT, THE PARTNERSHIP AGREEMENT SHALL CONTROL.THE LIMITED PARTNER INTERESTS IN THE FUND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS, NOR HAVESUCH LIMITED PARTNER INTERESTS BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR THE SECURITIES REGULATORYAUTHORITY OF ANY STATE. NEITHER THE SEC NOR ANY COMMISSIONER OF ANY SUCH STATE AUTHORITY HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRESENTATION, AND ANYREPRESENTATION TO THE CONTRARY IS UNLAWFUL. THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF INTEREST TO PURCHASE ANY SECURITIES ORINVESTMENT ADVISORY SERVICES IN ANY STATE OR IN ANY OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZEDTHIS PRESENTATION MAY CONTAIN “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, AS AMENDED. BECAUSE SUCHFORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES, ACTUAL RESULTS OF THE FUND MAY DIFFER MATERIALLY FROM ANY EXPECTATIONS, PROJECTIONS OR PREDICTIONS MADEOR IMPLICATED IN SUCH FORWARD-LOOKING STATEMENTS. PROSPECTIVE INVESTORS ARE THEREFORE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS.IN ADDITION, IN CONSIDERING THE PRIOR PERFORMANCE INFORMATION CONTAINED IN THIS PRESENTATION, PROSPECTIVE INVESTORS SHOULD BEAR IN MIND THAT PAST RESULTS ARE NOTNECESSARILY INDICATIVE OF FUTURE RESULTS, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL ACHIEVE RESULTS COMPARABLE TO THOSE OF ANY PRIOR OR EXISTING FUND OF THEFIRM OR ITS PRINCIPALS.THE SUBJECT MATTER OF THIS PRESENTATION IS EVOLVING AND SUBJECT TO FURTHER CHANGE BY THE GENERAL PARTNER OF THE FUND IN ITS SOLE AND ABSOLUTE DISCRETION; PROVIDED,HOWEVER, THAT, EXCEPT AS OTHERWISE INDICATED HEREIN, THIS PRESENTATION SPEAKS AS OF THE DATE HEREOF AND NEITHER THE GENERAL PARTNER OF THE FUND NOR ANY AFFILIATE ORREPRESENTATIVE THEREOF ASSUMES ANY OBLIGATION TO PROVIDE ANY RECIPIENT OF THIS PRESENTATION WITH SUBSEQUENT REVISIONS OR UPDATES TO ANY HISTORICAL OR FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESENTATION TO REFLECT THE OCCURRENCE OF EVENTS AND/OR CHANGES IN CIRCUMSTANCES AFTER THE DATE HEREOF.THE INFORMATION CONTAINED IN THIS PRESENTATION HAS BEEN COMPILED FROM SOURCES REASONABLY BELIEVED RELIABLE.THIS PRESENTATION IS EXCLUSIVELY FOR THE USE OF THE PARTY OR PARTIES TO WHOM IT HAS BEEN PROVIDED BY THE GENERAL PARTNER. BY ACCEPTING THIS PRESENTATION, THE RECIPIENTACKNOWLEDGES AND AGREES THAT HE, SHE OR IT (A) WILL MAINTAIN THE INFORMATION AND DATA CONTAINED HEREIN IN THE STRICTEST OF CONFIDENCE AND WILL NOT, IN ANY CIRCUMSTANCESWHATSOEVER, REPRODUCE THESE MATERIALS, IN WHOLE OR IN PART, OR DISCLOSE ANY OF THE CONTENTS HEREOF TO ANY OTHER PERSON WITHOUT THE EXPRESS CONSENT OF THE GENERALPARTNER OF THE FUND AND (B) WILL RETURN THIS PRESENTATION, AND ANY OTHER MATERIALS THAT THE RECIPIENT MAY HAVE RECEIVED IN THE COURSE OF CONSIDERING AN INVESTMENT IN THEFUND, TO THE GENERAL PARTNER OF THE FUND IF SO REQUESTED BY SAME OR IF THE RECIPIENT DOES NOT WISH TO PURSUE AN INVESTMENT IN THE FUND.THE LIMITED PARTNERSHIP INTERESTS IN THE FUND WILL BE OFFERED ONLY TO INVESTORS WHO MEET CERTAIN QUALIFICATIONS. THE GENERAL PARTNER OF THE FUND RESERVES THE RIGHT TOAPPROVE EACH INVESTOR. AN INVESTMENT IN THE FUND WILL INVOLVE SIGNIFICANT RISKS DUE TO, AMONG OTHER THINGS, THE NATURE OF ITS INVESTMENTS. INVESTORS SHOULD HAVE THEFINANCIAL ABILITY AND WILLINGNESS TO ACCEPT THE RISKS AND LACK OF LIQUIDITY INHERENT IN AN INVESTMENT IN THE FUND. INVESTORS MUST BE ABLE TO WITHSTAND A TOTAL LOSS OF THEIRINVESTMENT. THERE WILL BE NO PUBLIC MARKET FOR THE LIMITED PARTNERSHIP INTERESTS IN THE FUND, AND SUCH INTERESTS, SUBJECT TO CERTAIN LIMITED EXCEPTIONS, WILL NOT BETRANSFERABLE. EXCEPT AS PERMITTED PURSUANT TO THE TERMS OF THE PARTNERSHIP AGREEMENT, INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIALRISKS OF AN INVESTMENT IN THE FUND FOR AN INDEFINITE PERIOD OF TIME.EXCEPT FOR THE GENERAL PARTNER AND CERTAIN OTHER IDENTIFIED REPRESENTATIVES OF THE FIRM, NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANYREPRESENTATION RELATING TO THE FUND OR THE LIMITED PARTNERSHIP INTERESTS THEREIN. EACH PROSPECTIVE INVESTOR WILL BE AFFORDED THE REASONABLE OPPORTUNITY TO: (A)OBTAIN ALL ADDITIONAL INFORMATION WHICH HE, SHE OR IT MAY REASONABLY REQUEST RELATING TO THE FUND OR THE OFFERING OF ITS LIMITED PARTNERSHIP INTERESTS; AND (B) ASKQUESTIONS OF THE GENERAL PARTNER AND CERTAIN OTHER IDENTIFIED REPRESENTATIVES OF THE FIRM CONCERNING THE TERMS AND CONDITIONS OF THE PARTNERSHIP AGREEMENT, ANYINFORMATION SET FORTH IN THIS PRESENTATION, AND ANY SUPPLEMENTAL INFORMATION THAT MAY BE PROVIDED TO PROSPECTIVE INVESTORS BY THE GENERAL PARTNER OR ITS AFFILIATES.PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS PRESENTATION OR ANY PRIOR OR SUBSEQUENT COMMUNICATION FROM THE GENERAL PARTNER OF THE FUND OR ANYOF ITS REPRESENTATIVES OR AFFILIATES, AS LEGAL, TAX, OR INVESTMENT ADVICE. EACH INVESTOR SHOULD CONSULT WITH AND RELY ON HIS, HER OR ITS OWN PERSONAL COUNSEL,ACCOUNTANT, OR OTHER ADVISORS AS TO LEGAL, TAX, AND ECONOMIC IMPLICATIONS OF AN INVESTMENT IN THE FUND AND ITS SUITABILITY FOR SUCH INVESTORS. PRIVATE: NOT FOR DISTRIBUTION
    3. 3. What We AreA $40+ Million New Generation SeedFund• One of the most visible and active SuperAngel seed funds• Extremely strong mindshare among entrepreneurs and VCs• Focused on Consumer & SMB Internet/Web Infrastructure• Can write lots of small checks fast• Manage a Startup Accelerator which houses dozens of companies• Actively work with portfolio to raise additional capital• Closed on $13+million to date PRIVATE: NOT FOR DISTRIBUTION
    4. 4. Who We Are 500 Executive Team Dave
McClure
is
500s
fearless
 Chris/ne
Tsai
directs
the
500
SuperMentor
program,
plaLorm
 leader.

Previously
Dave
managed
 partnerships,
is
part
of
the
investment
team.
Previously,
 early‐stage
investments
for
 ChrisDne
was
at
Google
and
YouTube,
most
recently
leading
 Google
I/O.
 Founders
Fund
and
ran
 Enrique
Allen
directs
the
Accelerator
and
design
iniDaDves
while
 Facebooks
=Fund
REV.

Before
 prototyping
ways
to
make
early
stage
invesDng
more
scienDfic.
 that
he
ran
developer
markeDng
 Previously,
he
helped
design
Facebooks
=Fund
REV.
Enrique
hails
 at
PayPal
and
Simply
Hired,
and
 from
Stanfords
Persuasive
Tech
Lab
where
he
developed
apps
to
 has
founded
Silicon
Valley
 change
peoples
behavior.
 community
iniDaDves
like
 Startup2Startup,
GeeksOnaPlane,
 Christen
OBrien
is
the
Events
Director
at
500
Startups,
where
she
 manages
startup
conferences,
pirate
parDes,
and
world
tours,
not
 and
StartupVisa.
 to
menDon
leading
500’s
sponsorship
strategy.500 Mentors•125 People globally (8 countries)•Design, engineering & mktg experts•Access to major technology distribution platforms•Take a look: http://bit.ly/hepCpz PRIVATE: NOT FOR DISTRIBUTION
    5. 5. How We DecideVolume Investing Requires Clear SelectionCriteria • Simple Revenue Model (transactions, subscriptions & lead generation) • Alpha or Beta out (or previous product success) • Technical Founder on Team • Usage Validation (more than friends & family) • Product Solves a Problem PRIVATE: NOT FOR DISTRIBUTION
    6. 6. Startup 2.0 “Lean Investor” ModelMethod: Start with lots of small experiments, provide resources toaccelerate time to market, filter out failures, increase investment inwinners through Seed and Venture rounds. How We Invest: • Accelerator/Incubator: $0-$100k Build and Validate Product • Seed: $100K-$1mn Co-invest to Test & Grow Mktg Channels • Venture: $1mn-$5mn Maximize and Grow Revenue Investment Objective: 5% stake on exit PRIVATE: NOT FOR DISTRIBUTION
    7. 7. “This morning, Dave McClures 500 Startups unveiled details of its accelerator program, which has been quietly underway for the last few months...” Dave has built the500 Startups brandon the shoulders of “500 Startups trades office space, mentoring and up to $100,000 in capital for journalists too 5% of each new venture it backs.”numerous to name.But the true worth of Dave McClure’s personal brand canonly be measured in the context of his comparison set...
    8. 8. “This morning, Dave McClures 500“Angel Trivia Tests Startups unveiled details of its acceleratorYour Knowledge of program, which has been quietlyStartup Investing” underway for the last few months...” “500 Startups trades office space, mentoring and up to $100,000 in capital for 5% of each new venture it backs.”
    9. 9. Early Stage Investing “Micro VC” Baseline Venture Firms Felicis Floodgate AccelSuper Angels Benchmark Freestyle Ron Conway SoftTech CRV Keith Rabois SV Angel General CatalystReid Hoffman GreylockNaval Ravikant Sequoia Paige Craig Spark Accelerators AngelPad DreamIt NYC Seed TechStars Y Combinator PRIVATE: NOT FOR DISTRIBUTION
    10. 10. Evolution of Angel m Capital d igDemands ra Pa ld O Traditional Venture Angel 0 Opportunity Area 2. p money Venture tu ar 2.0 St Proof of Market Customer Company Sales Ramp Acquisitions/ Concept Validation Acquisition/ Market Grab Progress Distribution
    11. 11. SuperAngel Investment Model Makes Sense Capital efficient business models favor first investors
    12. 12. Sequoia CapitalQuickStart Discovery Fund
    13. 13. Our Advantage 500 Mentor 35% Network Angel List 10% Superior20% Blogs,Webcasts Social Deal Media Sourcing Conferences: Other VCs 5% - Startup Metrics - Lean Startups 30% - AARRR Methodology -  Warm Gun -  SMASH Summit -  Inbox Love -  Geeks on a Plane PRIVATE: NOT FOR DISTRIBUTION
    14. 14. Quantitative, High- volume Investing 40 30% • 200 companies (avg $75K/deal) • Anticipate 80% failure rate (160 co’s) high quality ‘survivors’$40mn • Use insider advantages 70% • 5+% ownership target to increase ownership in most promising deals • Lower failure rate Double down after traction PRIVATE: NOT FOR DISTRIBUTION
    15. 15. How 500 Startups Can Deliver 3X :77,2;<"!=501$" •No heroic exit assumptions&()**)+,-! 40"62178$+&" •Feed winners via follow-on investment #%"! •Protected by, “Law of large numbers” .)/01234+3523- "6+41+37+*)+ #$$! !/01$"23" !  $200mn average exit !  $4mn payback/co. ,&(.,$" !  Approx. 10 companies (5%) !  3-5% Ownership !"! !401$" 500"62178$+&" 8+*)91234+3523- !  $25mn average exit #"6+41+37+*)+ !  $1.25mn payback/co. High Performers !  Approx. 30 companies (15%) !9/1$"23" !  5% Ownership Solid Performers ,&(.,$" Poor Performers Poor Performers !  Assumes $2-5mn return !"#$%&(&)" !"*+(,+-.(&)"
    16. 16. Accelerator: Mentors, Marketing andMoneyFunding - $25 - $100K checks on standardized termsDistribution - inside track to distribution platforms like Facebook, Google, Twitter etcLocation - innovative & creative environment in downtown Mountain View 10k sq ft top floor with 360view of entire Bay Area + walking distance to Caltrain/public transport & delicious-affordable foodProximity - 15 min away from Facebook, Google, Microsoft, Apple, major VCs, Stanford University &moreDesigners in Residence - experts on site conduct 1:1 reviews and bootcampsMentors - 1:1 support + access to resident mentors & domain experts (eng/prod/mkt)Education & Events - weekly talks, “office hours” for design, data & distributionstrategies, public& private events, conferences, social gatherings and quarterly “Demo Day” PRIVATE: NOT FOR DISTRIBUTION
    17. 17. Case Studies•Twilio makes web-service APIs •Based out of Tokyo, offers web- so developers can build their •Develops tools that enable powered human translation organizations to engage services between English, own scalable, reliable millions of social network Japanese, Chinese, Spanish, communications applications users. Italian, French, German, for voice and SMS.•Thousands of businesses use •Technology allows Korean and Russian. organizations to create •myGengo launched an API in Twilio in diverse industries attractive, branded interactive April 2010 which allows such a healthcare, education, campaigns and publish them websites to connect to the customer service, retail, and on multiple social networks myGengo service and order manufacturing.•Company recently closed on •Closed $4mn in a $16mn and receive human translations Series A last spring. dynamically. $12mn in a $40mn Series B last fall. •In addition to 500, investors include Summit Partners, Jeff •Company recently closed on•Investors include Union Square Clavier, Aydin Senkut, Gary Ventures and Bessemer $750k of angel seed funding Venture Partners. Vaynerchuk. last fall.• PRIVATE: NOT FOR DISTRIBUTION
    18. 18. Investment History Facebook fbFund FF Angel LLC 500 Hats LLC 22 incubator deals 21 seed deals 15 deals 2004-2008 ($850K) Personal Investment & ($2M) Advisory roles Results: 1 exit @ $170M (9x), +3-6 future wins (~$300K) 2 addtl exits @ $50M, $70M (advisory roles) Bix (acq YHOO) Jambool (acq GOOG) Results: Results:Results: rd $500K+ Results: Results: 6 raised Series A $2M+ 3 exits to date 8 raised seed 8 raised Series A B $5-10M+ 3 raised Series $2M+ -Mint; $170M (9X)8 raised seed rounds $500K+ 3 raised Series B $5-10M+ 3 small exits 1 early exit @ 4X -Bix; Acquired by Yahoo, $50M3 exits to date 1 exit to date (4X) -Jambool; Acquired by Google PRIVATE: NOT FOR DISTRIBUTION
    19. 19. Target Investment ProfileConsumer & SMB Internet Svcs + Internet Infrastructure E-Com, Financial, SMB, Search/Social/Mobile, Email, Analytics, Parent/EducationDistribution Platforms (for customer acquisition): Search: Google (SEO/SEM) Social: Facebook, Twitter Mobile: Apple (iPhone, iPad), Android Media: YouTube (video), Blogs (text), Photos, Music, Games Inbox/SMB: Gmail/Docs, SalesForce, LinkedIn PRIVATE: NOT FOR DISTRIBUTION
    20. 20. 500 Portfolio At A Glance Series B funded Upcoming Series A Series B fundedUpcomingSeries A AcceleratorSeed elacarteonline.com
    21. 21. Investors Individuals Venture FirmsMarc Andreesen (Netscape/ Accel Partners Opsware) Blue Run VenturesMichael Birch (Bebo) The Founders FundBrad Feld (Foundry Group)Mark Goines (ex-Intuit) Redpoint VenturesMitch Kapor (Lotus)Josh Kopelman (First Round)Gus Tai (Trinity Ventures)Fred Wilson (Union Square) PRIVATE: NOT FOR DISTRIBUTION
    22. 22. Fundraising2010: $13M+ from Silicon Valley VCs & Individuals • $1-2M from 5 VC funds • $100K-$500K from ~30 VCs, execs, entrepreneurs2011: $27M+ from Family Office, Institutional, Venture Firms and Corporate Strategic Investors PRIVATE: NOT FOR DISTRIBUTION
    23. 23. Why 500 Startups? Why Now?• Unparalleled ability to source the best seed deals.• One of the few seed funds that also operates an accelerator.• Two pronged strategy offers diversification, using quantitative, high volume investment approach, and reduces risk on “big bets” from insider methodology for doubling down on the most promising deals.• Professional infrastructure and team skill set for PRIVATE: NOT FOR DISTRIBUTION
    24. 24. Fund Terms• Fund size target of $40mn• Mgmt Fee: 2% over term (3% drops .5% every 2 yrs)• Profits: Initially, 80/20, adjusting to 75/25 or 70/30 if performance milestones are met• Investment Period: 2 years• Term : 10 years PRIVATE: NOT FOR DISTRIBUTION
    25. 25. Backup
    26. 26. Enterprise/ The PortfolioProductivity Communications Mobile/LBS Education To Be Announced PRIVATE: NOT FOR DISTRIBUTION
    27. 27. The PortfolioAnalytics Consumer/ Financial Marketing Retail/Ecom Entertainment Services PRIVATE: NOT FOR DISTRIBUTION
    28. 28. Dave McClure 2000-2010Investor: 100+ Startups (Mint, SlideShare, Twilio, WildFire)Blogger: Ranked #7, Top VC blogs (TechCrunch, Jan 2010)Marketing: PayPal, Mint, Founders FundCommunity: Startup2Startup, GeeksOnaPlane, StartupVisaTeacher: Startup Metrics, Stanford Facebook class1980‘s & 90‘sEntrepreneur: Founder/CEO Aslan Computing (acq.)Developer: Windows App Dev / SQL DB AdminEngineer: Johns Hopkins ‘88, BS Eng / Applied Math PRIVATE: NOT FOR DISTRIBUTION
    29. 29. Startup Investor Ecosystem Tech Stars Y-Combinator $0-$10M Angels & Incubators $10-$100M Felicis (Senkut) SoftTech (Clavier) Seed Funds First Round Capital $100-$250M Union Square Ventures Venture Funds Menlo Ventures >$250 Accel Partners Large Venture Funds KPCB PRIVATE: NOT FOR DISTRIBUTION

    ×