The document discusses the evolution of the private market and rise of angel investors. It notes that startups have lower costs than ever before due to technologies like cloud computing. It also discusses how traction, rather than intellectual property, is now the most important factor for startups. Additionally, it summarizes how the private market is becoming more accessible, transparent, and efficient for both investors and entrepreneurs.

1. @paulsingh #avf2013
PAUL SINGH
@paulsingh・paul@dashboard.io・resultsjunkies.com
THE EVOLUTION OF THE
PRIVATE MARKET
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)

2. @paulsingh #avf2013
500 STARTUPS
PAUL SINGH
@paulsingh・paul@dashboard.io・resultsjunkies.com

3. @paulsingh #avf2013

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EARLY STAGE
STARTUPS
HAVE CHANGED

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STARTUP COSTS
LOWER THAN EVERBUT SCALING STILL COSTS MONEY
CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING

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WEB GETS BIGGER.
WORLD GETS SMALLER.

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TRACTION IS THE NEW
INTELLECTUAL PROPERTYPLATFORMS (SEARCH, SOCIAL & MOBILE) PRIMARILY DRIVING THE CHANGE.
NO LONGER “GOOD ENOUGH” TO DEPEND ON TECH DIFFERENTIATION.

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CAPITAL
INCREASINGLY
COMMODITIZEDRISE OF THE ANGELS, YO!

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NEW REALITY:
MONEY FOLLOWS
FOUNDERS
RISE OF THE ENTREPRENEURS, YO!

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SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

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SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

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TRANSPARENCY IS
SIGNALS ARE
EVERYWHEREBIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

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WALL STREET
BEAT US TO IT

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

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TWICE A WEEK A SMALL
HELICOPTER CIRCLES
OVER CUSHING’S TANK
FARMS ON AN OIL
INDUSTRY SPYING
MISSION.
“

18. @paulsingh #avf2013
WALL STREET
ISN’T ALONETHESE TECHNIQUES ALREADY USED TO UNDERWRITE IN-VITRO
FERTILIZATION LENDING, PAYDAY LOANS, SUBPRIME AUTO
LENDING, HOME/PERSONAL/AUTO INSURANCE AND MORE.

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WE CAN DO IT, TOOSURPRISE!
IT TURNS OUT,

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+ “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.

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WE CAN DO IT, TOO.

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WE CAN DO IT, TOO.

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WE’RE DOING IT, TOO.

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

26. @paulsingh #avf2013
EARLY STAGE VC
IS CHANGING
HAS CHANGED

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STATE OF THE ART IN EARLY
STAGE INVESTING IS NOT
VERY SOPHISTICATED

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UNBUNDLING OF
ADVICE, CONTROL
AND MONEY

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USED TO BE ABOUT
CAPITAL, DEALFLOW
AND JUDGEMENTTODAY, IT’S ABOUT ACCESS.

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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

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(NEW) FINANCINGS

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(NEW) FINANCINGS
Standardized terms

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(NEW) FINANCINGS
Standardized terms
No fixed amounts, no closings, no leads

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(NEW) FINANCINGS
Standardized terms
No fixed amounts, no closings, no leads
Continuous, not discrete rounds

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(NEW) FINANCINGS
Standardized terms
No fixed amounts, no closings, no leads
Continuous, not discrete rounds
Prices beginning to float

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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

38. @paulsingh #avf2013
(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

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

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THE PRIVATE MARKET IS
BECOMING MORE
ACCESSIBLE.

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THE PRIVATE MARKET IS
BECOMING MORE
TRANSPARENT.

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Demo DayVideos ⟹ 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

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THE PRIVATE MARKET IS
BECOMING MORE EFFICIENT.

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THE PRIVATE MARKET IS
BECOMING MORE EFFICIENT.
AND, SOON, MORE LIQUID.

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YOUR KEY TAKEAWAYS

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YOUR KEY TAKEAWAYS
Focus on Traction.

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

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ALSO...

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ALSO...
Distribution > Product

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ALSO...
Distribution > Product
Tactics > Strategy

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ALSO...
Distribution > Product
Tactics > Strategy
Notability > Credibility

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ALSO...
Distribution > Product
Tactics > Strategy
Notability > Credibility
Get on AngelList

53. @paulsingh #avf2013
ALSO...
Distribution > Product
Tactics > Strategy
Notability > Credibility
Get on AngelList
Raise 12-18+ months of funding

54. @paulsingh #avf2013
ALSO...
Distribution > Product
Tactics > Strategy
Notability > Credibility
Get on AngelList
Raise 12-18+ months of funding
Learn the basics of VC economics

55. @paulsingh #avf2013
ALSO...
Distribution > Product
Tactics > Strategy
Notability > Credibility
Get on AngelList
Raise 12-18+ months of funding
Learn the basics of VC economics
No. More. Grinfucking.

56. @paulsingh #avf2013
ALSO...
Distribution > Product
Tactics > Strategy
Notability > Credibility
Get on AngelList
Raise 12-18+ months of funding
Learn the basics of VC economics
No. More. Grinfucking.
Shameless plug: dashboard.io

57. @paulsingh #avf2013
@paulsingh・paul@dashboard.io・resultsjunkies.com
THE EVOLUTION OF THE
PRIVATE MARKET
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)
LEARN MORE:
events.dashboard.io/avf2013