This document provides an overview of early stage investing. It discusses the history and growth of funding rounds for startups from the 1990s to 2010s. It also notes that early stage investing remains one of the last inefficient asset classes. The document highlights that early stage investments offer excellent long-term returns and diversification benefits when added to investment portfolios. It presents data showing early stage assets have outperformed other asset classes over various periods. The document concludes by outlining SeedChange's analysis process for early stage companies, which takes both quantifiable and non-quantifiable factors into account.

1. FINDING UBER:
AN INSIDE LOOK AT
EARLY STAGE INVESTING

2. AGENDA
• History
• Early Stage Asset Class
• 3 Early Stage Companies
• Wine

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THE FUNDING CYCLE

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Average
Size of
Funding
Round
(millions)
0"
1"
2"
3"
4"
5"
6"
7"
8"
9"
1990s" 2000s" 2010s"
FFF"
Angel"
VC"
FUNDING TRENDS

5. “Investing in stocks, bonds, commodities — even
alternatives — is efficient, transparent and cheap.
Early stage investing is the last closed,
inefficient asset category left.”
—Tony Kelly, Head of US Capital Markets, Goldman Sachs
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7. Early Stage
Assets
Performance
Early stage investments
demonstrate excellent
long term return
characteristics
Diversification
Early stage investments
are diversifying and
additive to most portfolios:
assets have low levels of
correlation to
each other and
to other
asset classes
7
EARLY STAGE INVESTING OFFERS
UNIQUE INVESTMENT OPPORTUNITIES
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8. THE UBER EFFECT

9. 9
RETURNS OUTSTRIP OTHER ASSET CLASSES
OVER NEARLY EVERY PERIOD
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Sources: Cambridge Associates, Bloomberg

10. 10
ALLOCATION TO EARLY STAGE ASSETS
LOWERS THE RISK PROFILE OF MOST PORTFOLIO
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“Over any significant time period, research shows that a
portfolio including early stage companies outperforms a
traditional portfolio in terms of both risk and return.
An allocation towards startups decreases the
standard deviation of returns and more
specifically, downside deviation.”
Over the past 10 years, a qualitatively similar
allocation of 49% stocks, 51% startups
multiplied returns by almost 5x
with no change in underlying risk.”
—Report of Illinois Business Consulting, University of Illinois (2015)

11. TEAM STRATEGYPRODUCT MARKET STRUCTURE
‣ Skill set, passion,
competence
‣ Experience:
domain, startup,
management
‣ Long term vision
‣ Backgrounds
and education
‣ Advisor strength
and involvement
‣ Customer value
proposition
‣ Development
stage
‣ User experience
‣ Investor value
proposition
‣ Product
roadmap
‣ Market depth
and scale
‣ Competition and
differentiation
‣ Barriers to entry
‣ Customer
growth,
retention,
momentum
‣ Revenue model
and cash flow
evaluation
‣ Revenue
momentum
metrics
‣ Legal and IP
evaluation
‣ Supplier / client
agreements
‣ Marketing / goal
alignment
‣ Human,
technical and
capital resources
‣ Funding
deployment
efficiency
11
SEEDCHANGE ANALYSIS PROCESS:
QUANTIFIABLE, NOT QUANTITATIVE
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