Silicon Valley 2.0: The Lean Investor

The Lean VC: a Silicon Valley 2.0 Story Dave McClure Founding Partner, 500 Startups ( @DaveMcClure ) http://500startups.com Nokia Growth Partners – Nov 2010, SF Re-Inventing Venture Capital & Angel Investing through Innovation, Incubation, & Iteration

Changes, Oh. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Dave McClure: Bio ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

500 Startups LP Mountain View, CA – Founded 2010 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

500 Hats LLC (Personal Investments: 13 deals, 2004-2008, ~$300K) Results: 1 exit @ $170M (9x), +3-6 future wins 2 addtl exits @ $50M, $70M (advisory roles) Bix (acq YHOO) Jambool (acq GOOG)

Founders Fund (Incubator/Seed Program: 43 deals, 2008-2010, ~$3M) Results : 8 raised seed rd $500K+ 3 small exits Results : 6 raised Series A $2M+ 2 raised Series B $5-10M+ 1 early exit @ 4x FanBridge Facebook fbFund 22 incubator deals ($850K) FF Angel LLC 21 seed deals ($2M)

500 Startups LP Fund I (50+ investments @ ~$100K avg) Wildfire Crave Tello AwayFind Indinero MyGengo Revnetics Mogotix EcoMom Zencoder GazeHawk Crocodoc SayHired Recurly AppBistro Foodspotting Gantto Medialets Rapportive TransFS SiteJabber GinzaMetrics Estately FlowTown OneForty Twilio Postling Plancast ElaCarte WePay Zappli Format Baydin GroupSpaces Rapportive Apsalar Bunndle Udemy Brainient ReadyForZero Graphicly StoryJumper OtherInbox Viikii Zozi One True Fan Formative Labs Networked Blogs

Venture Capital 1.0 = Too Big To FAIL WIN ? (at least for *Internet* Startups) Venture Capitalist? Super Angel.

Silicon Valley Investor Ecosystem True Ventures First Round Capital Union Square Blue Run Angels & Incubators ($0-10M) “ Seed” Funds ($10-50M) VC Funds ($50-250M) VC Funds (>$250M) Y-Combinator TechStars SoftTech (Clavier) FloodGate (Maples) Felicis (Senkut) SV Angel (Conway)

Venture Capital: Still Relevant? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

More & Smaller Acquisitions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Platforms 2.0 Search, Social, Mobile

Web 2.0 : Good Times . ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],R.I.P. *BAD* TIMES

Platform Viability Successful Platforms have 3 Things: 1) Features 2) Users 3) Money Users . . Money Features Growth Profit Profitable Growth Nirvana

Distribution Platforms ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Web 2.0 Business Model: KISS  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Startup Incubators Lots of Hot, Cool, Web 2.0! (+ lots of FAIL .)

Incubator 2.0: Fast, Cheap, FAIL ,[object Object],[object Object],[object Object],[object Object]

Incubator 2.0: Education, Collaboration, Iteration ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

fbFund REV ,[object Object],[object Object],[object Object],[object Object]

Startup Metrics: Lean Startup -> Lean VC Measure Stuff, Iterate. (Rinse & Repeat.)

“ Just Gimme the GOOD Leads” Users, Pages, Clicks, Emails, $$$...? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],the good stuff.

Lean Startup Challenges ,[object Object],[object Object],[object Object],[object Object]

Role: Founder/CEO ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Role: Product / Engineering ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Role: Marketing / Sales ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

“ Lean Investor” Model ,[object Object],[object Object],[object Object],[object Object]

Investment #1: Incubate (“Product”) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Investment #2: Seed (“Market”) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Investment #3: Venture (“Revenue”) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Summary ,[object Object],[object Object],[object Object],[object Object],[object Object]

Silicon Valley 2.0: The Lean Investor

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Silicon Valley 2.0: The Lean Investor

Editor's Notes