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Rise of the Micro VC
- 1. “Strange Case of Dr. VC and Mr. Entrepreneur”
- 4. Investors are successful entrepreneurs who give their time and money
- 5. Based in London, with European-wide focus
- 6. Focus on the equity gap; investing between £0.5m and £2m per deal
- 8. Some Perspective Non Equity Finance Equity Financing Angel Financing Self Finance / Bootstrapping Venture Capital Debt / Bank Finance Private Equity Customers!!! Public Stock Markets
- 9. VC is a Marriage of Convenience…
- 11. Large market
- 13. Fast growing
- 15. A chance to make “outsized returns”
- 16. Cash
- 17. Strategic Advice
- 18. Mentoring
- 19. Recruiting
- 20. Introductions / biz dev
- 22. Old-School Fundraising $ Invested Success
- 23. Old-School Fundraising $ Invested Success
- 24. Old-School Fundraising $ Invested Success
- 25. Old-School Fundraising $ Invested Success
- 26. Old-School Fundraising Private Equity / Public Markets VCs FF&F Angels $ Invested Success
- 29. Marketing
- 30. Platforms
- 31. Revenue
- 34. Capital Needs of Lean Startups $ Invested Success
- 35. Fit? Private Equity / Public Markets VCs FF&F Angels $ Invested Success
- 36. Dilemma VCs FF&F Angels $ Invested Success
- 37. Is the Traditional VC Model Broken?
- 39. Earlier, smaller acquisitions of VC-backed companies = hard to generate required returns
- 40. Active v passive investment = need fast read on company progression
- 43. Too much cash in = wrong pre-money valuation
- 44. Push for larger exits above natural range = divergent view of success....
- 48. In Europe, we now have critical mass to make this happen:
- 49. Index Seed, PROfounders Capital (Lastminute.com, Bebo), Atomico (Skype)
- 50. Notion Capital (MessageLabs), WhiteBearYear (Last.fm, QXL)
- 51. Kima Ventures (Iliad), ISAI, Jaina Capital (Meetic.com)
- 52. European Founders Fund (Jamba, Alando), TeamEurope Ventures (Spreadshirt)
- 53. HackFWD (Xing)
- 55. Aspiration? “An entire generation of entrepreneurs are building dipshit companies and hoping that they sell to Google for $25 million.” Unnamed venture capitalist
- 56. Europe
- 60. Good areas of expertise - (ecommerce in France, mobile in Scandinavia, digital media in London)
- 61. Know how to build for multi-countries at first launch
- 62. Not Silicon Valley, so what?
Editor's Notes
- PRODUCT now typically means a website or service, run on low-/no-cost open source software, hosted in the cloud on low-cost servers, developed in a few months (or a WEEKEND!) by a small team of 1-5 developers, who continuously test & iterate in real-time with online customersMARKETING now typically means using a variety of online distribution channels via paid & organic search (SEM/SEO) on Google, PLATFORMS viral/social amplification on new media platforms & social networks like Facebook, Twitter & YouTube, and the quickly-growing mobile platforms of Apple iPhone & Google Android. With the exception of search, most of these distribution channels didn't exist 5 years ago, yet they now easily reach over 100M-500M+ users, with very low cost and measurable marketing campaigns such that even a small team can reach billions of people globally.REVENUE can now be collected easily via a variety of online payment, transactional e-commerce, digital goods, subscription billing, lead generation,CPM/CPC/CPA advertising. Many people buy things online now, and many companies are even bought for usage & users ahead of revenue.
- It was designed for the stair-step world, and we are now in the curve-y world.Our entire industry was designed for raise capital, spend capital, raise more capital, spend more capital.What does it mean for us?
- In fact, over the last year, we have seen the industry change – change from below (with the formation of new funds) and change from within (self correction).We have seen a new class of investor come out – you can call it the super-angel or the micro-vc…it means the same thing.What are the characteristics? Less than $50m, average investment around $500k to $1m, very frugal, test and learn, Also – will have to cut companies off sooner than before…horrible, but the right thing to do.