EIA2017Italy - Duncan Davidson - The Future of VC
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The document discusses trends in venture capital and emerging technologies. It notes that venture capital has shifted towards earlier stage "seed" investing due to declines in costs for starting companies. While there has been an increase in highly valued "unicorn" startups, IPOs have decreased. The document predicts several emerging technologies will be disruptive, such as IoT, AI, blockchain, and autonomous vehicles. However, it notes that frontier technologies are still 5 years away from widespread adoption and will cause massive disruption similar to previous industrial revolutions when they emerge.
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EIA2017Italy - Duncan Davidson - The Future of VC
- 1. The Future of VC Duncan Davidson Aug 2017
- 2. What is Venture Capital Financial Institutions Startups Venture Funds Exit! Invest Invest 1
- 3. The Founder’s Journey is Daunting 2
- 4. My Journey Down the Rabbit Hole LBO Analysis 2 Dot-Com IPOs Join the Dark Side IPO: $9B mkt cap IPO: $8B mkt cap M&A: Trilliant (smart grid) M&A: Myriad (mobile) 2 mobile startups $4.5B Incubator $150M 3
- 5. How is it Working Out? My fund pioneered “Post Seed” investing $150M under management with high returns Expected to exceed ‘top quartile’ 3x Fund Return multiple So far, out of first 70 deals since 2007: 4 IPOs 6 Unicorns (>$1b) 15 Centaurs (>$100m) 4
- 6. To 5 First, where you've been you must know Know where you’re going, hmmm?
- 7. The “Era of Cheap” Disrupted VC $5M $500K $50K $5K 1995 2005 2010 2015 Source: GRP Partners Technology Drivers Open Source Cloud + AWS Developers Start Companies Cost of a Startup 6
- 10. Venture Capital Went to Seed 2000 20162008 1000 30 300 100 # Funds 9
- 11. Seed is the New A Inception Product Market Fit Scalable Growth Series A Series B Series C 2002-2007 2008-2013 Seed Series A Series B Seed Series A 2014-Present Source: Nextview Ventures 10
- 12. But, Where are the IPOs?? PC Bubble Dot-Com Bubble VCs make most of their return in tech booms We are in the third big one, driven by Unicorns not IPOs ?? 11
- 14. A Blessing of Unicorns 13
- 15. Now, A Unicorn Crunch 14
- 16. 15 Where We Are Now Mobile Social Frontier Tech 2015 2016 2017 2018 2019 2020 We are in Transition
- 18. A Walk Through Frontier Tech 17 IoT AI/AV’s 3D Printing AI/Robotics Blockchain AR VR
- 19. Industrial 3D Printing is Emerging 18
- 20. VR is Over Hyped 19 Facebook buys Oculus for $2B
- 21. “Silicon Valley” Now Mocks Oculus Facebook has sunk $3B in … nada out Keenan FeldsparPalmer Luckey, showing off Oculus 20
- 22. IoT is the Next Big Thing 21 IoT will put a computer in every machine
- 23. Blockchains will Automate Industry • HTML provided the rails for the Internet for People – the World Wide Web • Blockchains will be the rails for the Internet for Machines – automating via Smart Contracts, paying via Smart Tokens 22
- 24. Blockchain = Digital Rails 23
- 25. Blockchain ICOs Replacing VCs? ICO = Initial Coin Offering 24
- 26. Did AI Kill Chess? No! 25
- 27. AI + Human = Symbiosis 26
- 28. NLP + ML = Chatbots! • chatbots NLP = Natural Language Processing (getting great!) ML = Machine Learning (the new database) 27
- 29. Trillion Dollar Passenger Economy 28 Mobile Office Mobile Theater Travel AR/VR
- 30. Smart Cities, Dumb Politics 29
- 31. My Favorite Future Forcing 30
- 32. The Frontier is Still 5 Years Away 31
- 33. But When it Comes: Massive Disruption 32 Fourth Industrial Revolution IoT AI/AV’s 3D Printing AI/Robotics Blockchain AR VR
- 34. This Will Be Yuuuuge 33
- 35. Maybe Ray Kurzweil Will Be Right 34 We won’t experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress (at today’s rate) ... Leading to The Singularity — technological change so rapid and profound it represents a rupture in the fabric of human history.
Editor's Notes
- The Call to adventure: Start ups are a trial. – the idea is the easy part, it is the execution, the selling of the idea to others that is hard. Even those companies that make it look easy, had a trial. Twitter, Instagram. Twitter’s first business model, couldn’t get funded in SV. Meeting the Mentor: we all need an obi wan kenobi The Ordeal: Die to be reborn: a start up is constantly in the state of fighting great battles to stay alive, at the edge of disaster, facing your greatest fear and you do it over and over again. The Resurrection: Another ordeal. Over coming fear Return with the Elixr: if you are the lucky 1 in 1000. This is what it is really like.
- We have all heard of the Series A Crunch. Bullpen first prepared this analysis two years ago, and then tracked how well the prediction worked. The key to the chart is to shift the seed round one year out – when they seek VC funding. Then the gap is dramatic, as shown. Half the seedlings at risk … Not all should get funding, and many get acqui-hired, but this is a larger drop-off (50% then, 25% today) than A to B or B to C. The post seed round emerged by Bullpen and a few other pioneers to fill the need.