Presentation to SEED http://seed.mg.gov.br/en/, Demo Day. March 19, 2014

1. Global Trends in
Startup Ecosystem
March 2014

2. Agenda
• What is a Thriving Community?
• Baseline Market Factors
• Trends
• In Early Stage Investing
• In Markets
• Q&A

3. About Dave
• Serial Entrepreneur - Five Startups, 2 sold, 1 closed, 2 Active.
• Board Member - Mid Market Companies, six exits
• FormerVC - $250M Intl Fund
• VP Programs & People at UP Global
• Husband & Dad @DaveParkerSEA
www.UP.co

4. About UP Global
• Founded Merger of Startup Weekend and Startup America
• Non Profit team of 50 people in Sao Paulo, Mexico City,
Delhi, London and HQ in Seattle
• Committed to the right programming at the right time to
increase your odds of success and speed your process

5. 2013 Facts
815
102
467
74k
3,50
EVENTS
COUNTRIES
CITIES
ATTENDEES
ORGANIZERS
815
102
467
47k
3.5k
2016 CITY GOAL1000

7. What is a Thriving Community?
• Startup Density & Community Driven
• <1Year Old Companies
• 1-5Year Old
• Tech and Information and Communications Technology (ICT)
• Community Metrics will predict Macro Economic Metrics -
but over time

8. Thriving = Startup Density
• For cities over 1MM population (greater metropolitan area),
good “thriving” startup density is ~225 startups (1-49
employees) per 100,000 people.
• For cities btw 500k - 1MM, ~175 startups (1-49 employees)
per 100,000
• For cities btw 250k - 500k, ~150 startups per 100,000
Prior to 2013 there was no widespread data on startups, all publications are within the last year. US City
data only as provided by Kauffman & Konscal

9. LinkingYoung Firms & Job Creation
• Young High Tech and ICT businesses, as opposed to small
business play an outsized roll in job creation
• Differentiating growth oriented startups from other young
and/or small business is critical
• High tech start lean - but grow so rapidly that it offsets job
losses from early stage business failures
• Majority of growth is <1 year and 1-5 year old companies

10. WatchingYour Numbers
• Census Data for Self Employment ≠ Entrepreneurship
• # of Incorporations vs. High Growth
• Employment #s
• Investment/Exits
• Tax Rev

11. • Startups are mobile - they will find a way, even if it means
moving, once they move, they aren’t likely to return
• Policies may be Causation or Correlation
• Factors in our control
• Factors out of our control
Challenges to Thriving Communities

12. How Corporations Help
• Engage with new companies - yes there is a risk, but they
could provide innovation
• Pay <15 days
• Be a subject matter expert
• Be a connector

13. You don’t get to start as
Silicon Valley today

14. unless you started
in 1971

15. Timeframe to Thriving Community?
• Average time fromVenture Investment to Exit is 4.7-7Years
(Venture Source)
• Angel Investment to Exit is 7Years (Angel Capital
Association)
• All MajorVenture funds have a 10Year LLP agreement
Regardless of the data - it’s going to take a while

16. Is the Investment Worth It?
• Top 10 Metro (MSA) US Areas in 1990 were still in the top
20 in 2010
• Once you built it, you should be able to keep it
• Successful entrepreneurs re-invest in the market
• “Paypal Mafia”

17. Factors in Our Control
• Creating Startup Density
• Encouraging programming lead by the community, e.g.
Meetup, Startup Weekend, Startup Weekend NEXT,
• Accelerators - 165 worldwide, massive growth
• Angel investments
• Standard term sheets, open source legal documents

18. Factors Out of Our Control
• Culture - need to embrace failure as part of success
• Ex: not viewing failure as an outcast - UK
• Legal - Incorporation laws that don’t punish risk takers
• Ex:“piercing the corporate veil” - Singapore
• Tax - that encourage investor to get of the sidelines
• Ex: Convertible Debt - Hungary

19. Event Density
Low
High
Boulder
SJC
NYC

20. CommonY Axis Factors
1. Leadership
2. Engagement & Diversity
3. Talent
4. Network Density
5. Entrepreneur Culture
6. Mentors & Coaches
7. Capital
8. Corporate Engagement
9. Support Services
10. Government Support

21. Trends in Early Stage Investment
• Growth of Accelerators - vs. Incubators
• 165+ WW that provide investment
• Women Entrepreneurs
• Early Investment
• Crowd Funding
• Simple Term Sheets/docs

22. Trends in Markets
• Knock offs - with large markets - Easy Taxi
• Consumerization of IT - DropBox
• Break up of Marketplaces - Craigslist to Gazelle
• Open Source - Github
• Wearables - Fitbit
• Over the Horizon - Big data (for Startups), Internet of things

23. Note to Startups!
• Office Hours tomorrow!
• Please read, http://dkparker.com/2013/02/19/buy-you-coffee/
• Come prepared
• Know what your next biggest challenge is before tomorrow

25. What if?

26. Every miss cost
$1M?

27. What if we changed
the game?

28. Join us at StartupWeekend Favela -
http://riofavela.startupweekend.org/

29. Thanks!

30. Sources
• Brad Feld, Startup Communities
• THE MOST ENTREPRENEURIAL METROPOLITAN AREA? Jared Konczal,Senior Analyst, Kauffman Foundation
• PATH-DEPENDENT STARTUP HUBS - Dane Stangler, Ewing Marion Kauffman Foundation
• Tech Starts: High-Technology Business Formation and Job Creation in the United States - Ian Hathaway, Kauffman
Foundation
• What makes city entrepreneurial - HBS
!

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