Private company up & comers march 2012 - soho loft

Private Company Up & Comers

March 2012

Private Markets are Getting an Overhaul

Super Angels
VC Crowdsourcing

Accelerators Private market funds
Copyright 2011 HighStep Capital. All rights reserved.

Changes in the Funding Cycle

Seed Early Stage Late Stage

Traditional F&F Series A Series B Series C Series D Series E

Recent Angels Series A/B Series C/D

Very Recent AngelList SecondMarket
Path 1 VCs VCs VCs

Path 2 Angels Angels Angels
Secondaries Secondaries


Time to Exit has Increased

Median Age at IPO
12

10

8

6

4

2

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

NVCA, Jan 2011


Why Companies Mature Before an IPO

IPO performance from 1980-2010

Sales # of IPOs Avg 1st Day Return Avg 3yr Return
<$50m 3,897 23.60% 5.00%
$50m+ 3,457 12.00% 39.10%
IPO research from Prof. Jay Ritter, University of Florida – as of 6/1/11
http://bear.cba.ufl.edu/ritter


The IPO Gap Creates the Opportunity

Public
VC IPO Gap Markets

1 2 3 4 5 6 7 8 9 10

• Buyers & Sellers Maturing
• Ecosystem Emerging
• Laws Developing


Private Company Emerging Stars


Network Based Business Models


ZocDoc – The OpenTable of Doctor’s Offices


ZocDoc Stats


Klout – branding people


Klout - People become Brands


Polyvore – Pinterest for shopping


Polyvore Stats


CouchSurfing – Craigslist for travelers


CouchSurfing Stats

Couchsurfers: 3,867,883
Successful Surfers: 4,221,367
Friendships Created: 4,165,046
Positive Experiences: 6,752,847
Unique Countries/Territories Represented: 251
Unique Cities Represented: 85,760


WhaleShark Media – coupon network


WhaleShark Media Stats


Shopkick – Local & Mobile Couponing


Shopkick Stats

•1 billion in-app deals and offers viewed
•3 million active users just over a year since launch
•5 million walk-ins to partner stores in December 2011,
doubling in just four months
•10 million product scans, up from 7 million in August
2011 and 3 million in February 2011
•Sixty-four percent of all shopkick users are now
women. More than half of female users have kids
•The average shopkick user is 30 years old. Less than
8% of all users are younger than 18


Lytro – focus later


Lytro Description

Lytro is developing a new type of camera that
dramatically changes photography for the first time
since the 1800s. Rather than just capturing one plane of
light, it captures the entire light field around a picture,
all in one shot taken on a single device. A light field
includes every beam of light in every direction at every
point in time. Experimentation in this field started in the
mid-1990s at Stanford with 100 cameras in one room.
Lytro’s innovation is making it small enough to fit in
your pocket. Really.


Kiva Systems – Robotic Fulfillment


Kiva Systems Adoption


Palantir Technologies – Big Brother is watching


Palantir Stats
2010 Revenue: “significantly north of $80m” http://goo.gl/aABcz
2011 Revenue: “on track to hit $250m” http://goo.gl/egv7x
“there is a clear path to hit $1b in revenue within 5 years”
http://goo.gl/cqE9N
Capital Raises:

Seed: 2004 Peter Thiel
Series A: $10.52m - November 2006 In-Q-Tel & Individuals
Series B: $36.75m – March 2008 In-Q-Tel, Reed Elsevier Ventures
Series B2: $8.29m – April 2009 Individuals
Series C: $34.9m – November 2009 Undisclosed Venture Firms & Individuals
Series D: $90m – June 2010 Founders Fund, Glynn Capital, Ulu Ventures, Individuals
Series E: $50m – May 2011 Founders Fund, Undisclosed VC
Series F: $68m – September 2011 Founders Fund
Total: $300m


better place – battery switching stations


BranchOut – the LinkedIn of Facebook


Branchout Stats


Stella & Dot – the next-gen Mary Kay


Stella & Dot stats

2009 Revenues: $33m
2010 Revenues: $104m
2011 Revenues (expected): $300m
5 Years Revenues: $1b

“It’s a nice business with very little paid-in capital. It’s gotten to $100
million and is a very profitable business in a short period of time. I
look forward to making it a standalone company for many years. I’m
very excited to work with her and the team.”
Sequoia Capital Partner Alfred Lin, who was most recently
chairman, COO and CFO of Zappos.com.

Foodspotting – social discovery through food


What’s up With Food Photography?


Cheezburger – stupid stuff that people share


Cheezburger Overview

Cheezburger, the company behind popular sites such as
I Can Has Cheezburger?, FAIL Blog, Memebase, and
The Daily What. The Internet media publisher counts a
passionate fan base of 16.5 million people who upload
more than 500,000 pictures and videos as well as view
375 million pages and 110 million videos each month.
Cheezburger has been profitable since its inception with
revenue from three sources of advertising, traditional
media publishing including books, and merchandising.


Market Observations

• The Internet is huge & growing, which makes
your odds of success very high
• The Internet is filled with great niche content
• The Internet is very international
• Winning strategies are all about network effects so
get big as fast as possible – (ie, photo sites)
• Most of the great online products are derivatives
of great offline products
• The depth and quality of companies is amazing


Jason Jones
jjones@highstepcap.com
914.315.9751
@cardinalrose

http://www.slideshare.net/jjones23
New York | San Francisco

Private company up & comers march 2012 - soho loft

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