I presented these slides at Duke Law Professor Bill Brown's Structuring Venture Capital and Private Equity Transactions Class on January 26, 2012.

1. CONFIDENTIAL
Startup & Venture Lessons
Duke Law School
Jay Jamison
Partner, BlueRun Ventures
jjamison@brv.com | @jay_jamison | jayjamison.com

2. CONFIDENTIAL
Agenda
Introduction
Early Stage Valuation Methods
Exiting
VC: Venture or Vulture Capital?

3. CONFIDENTIAL
Introduction
• Duke, BA, English, 1992
• Emory Law School, 1995-96
• MBA, Wharton,1998
• Microsoft, 1998-2007
• Founder, Moonshoot, 2007-10
• Partner, BlueRun Ventures, 2010-Present
3

4. CONFIDENTIAL
About BlueRun Ventures
• Over $1.0B under management
• Investing out of Fund IV ($240M)
• Focus: Mobile & consumer internet
• Seed & Series A
4

5. CONFIDENTIAL
What is my job?
5
• Unearth great dealsFind
• Convince NewCo to take our $Close
• Help NewCo reach full potentialAssist

6. CONFIDENTIAL
Early Stage Valuations
6

7. CONFIDENTIAL
It’s a Golden Age for Entrepreneurs….
Cheaper than ever to start a company.
Better resources
• Incubators: Y-Combinator, 500Startups, …
• Resources: Startup Digest, Lean Startup, TC, VB
Technology is easier to learn, access, &c.
• Codecademy
• RoR
• AWS
Driving valuations up

8. CONFIDENTIAL
… And Investors Understand This.
I see lots of great companies that are:
• Capital efficient
• High velocity in coding and releasing
• Product in market with traction
• Clear customer insight on what works
• Battle-tested founding teams
• Clear, concrete ask on what $$$ they need

9. CONFIDENTIAL
Implication
While we’re in a Golden Age for
Entrepreneurs, it is raising the bar
for most very early stage
companies…
You need to prove more on very
little money, because so many other
start-ups are already doing so.

10. CONFIDENTIAL
Early Stage Valuations
Plain vanilla Series A
• VC: 20-30%
• Option pool: 10-20%
• Founders & Angels keep rest
Items we watch
• Founder incentive must be very high
• Maintaining a clean cap table is important
10
Founders
& Angels
60%
ESOP
15%
VC
25%

11. CONFIDENTIAL
Exiting
11

12. CONFIDENTIAL
Exits
Stuff beyond your control
• The market
• The corporate politics on the other side
Stuff in your control
• Which founding teams you back
• Staying focused on execution until deal is signed
• Attracting alternative bidders
12

13. CONFIDENTIAL
VC: Venture or Vulture?
13

14. CONFIDENTIAL
Venture
• Unique and amazing form of capital
• Helped scale companies that have had massive impact
• And will continue to have an important role
14

15. CONFIDENTIAL
But, VC is not…
15
Summer Camp

16. CONFIDENTIAL
Our Aspiration
Adapted from Glenn Kelman, CEO Redfin, describing
working w/ Pierre Lamond at his Plumtree.
Then Pierre Lamond, the Sequoia partner on the
deal, began working out of our office, acting as
the virtual CEO. Pierre made a point of being
there the day one of his other companies went
public. We looked at a news photo of all the
smiling people, who seemed to be living in a
gated community, on a planet I would never visit.
Then Pierre said “that company was once even
more screwed up than you are.”
16

17. CONFIDENTIAL
Recommended actions
Investigate and reference check any investor
• Past successes
• Past failures
Assess the friendliness of terms
• This tells you a lot about alignment w/ founders
17

18. CONFIDENTIAL
Thanks & Q&A
18