- There has been significant disruption in the venture capital industry due to changes like the rise of internet users, faster internet speeds, increased mobility, and social connectivity.
- The venture capital model has changed from relying primarily on board interactions and "VC knows best" to providing more operational support, thought leadership, peer learning platforms, and industry insights for portfolio companies.
- Leading venture capital firms are differentiating themselves by investing in extensive operational support services, transparency through blogging, peer-to-peer learning opportunities, and leveraging their domain expertise and relationships within specific industries.
SparkLabs Global Ventures: Our First 16 MonthsBernard Moon
SparkLabs Global Ventures is a new seed-stage fund founded by entrepreneurs. We are a global fund that
believes exceptional entrepreneurs can be found anywhere. All six partners have created new businesses
across the globe, and are currently based in London, Tel Aviv, Seoul, Singapore and Silicon Valley.
China Internet Report 2017 by Edith YeungEdith Yeung
The China Internet Report covers topics including:
China vs. US internet by the numbers, China market size, top China startup cities, venture capital, smartphone landscape, major Chinese internet trends including messaging, mobile payment, Cryptocurrency, shopping, bike sharing, live streaming. gaming, eSport, artificial intelligence and education. This guide is intended to give you basic information about Chinese internet landscape.
With all the opportunities presented by technology, one can easily get lost in the world of technology as new things keep emerging every day while existing ones keep expanding. It is, therefore, important to carefully identify a niche in technology and focus on it.
SparkLabs Global Ventures: Our First 16 MonthsBernard Moon
SparkLabs Global Ventures is a new seed-stage fund founded by entrepreneurs. We are a global fund that
believes exceptional entrepreneurs can be found anywhere. All six partners have created new businesses
across the globe, and are currently based in London, Tel Aviv, Seoul, Singapore and Silicon Valley.
China Internet Report 2017 by Edith YeungEdith Yeung
The China Internet Report covers topics including:
China vs. US internet by the numbers, China market size, top China startup cities, venture capital, smartphone landscape, major Chinese internet trends including messaging, mobile payment, Cryptocurrency, shopping, bike sharing, live streaming. gaming, eSport, artificial intelligence and education. This guide is intended to give you basic information about Chinese internet landscape.
With all the opportunities presented by technology, one can easily get lost in the world of technology as new things keep emerging every day while existing ones keep expanding. It is, therefore, important to carefully identify a niche in technology and focus on it.
Global Technology Trends & Top Ten Startup Hubs 2016Bernard Moon
Update report that provides an overview of general technology trends, global venture capital trends, and startup trends around the world. Snapshots of the top 10 startup hubs in the world: Silicon Valley, NYC, London, Stockholm, Berlin, Tel Aviv, Beijing, Seoul, Boston, and Los Angeles.
by Benedict Evans. Please see this link for full description, slides, AND version with talk track: http://a16z.com/2016/12/09/mobile-is-eating-the-world-outlook-2017/
Global Technology Trends & Top Ten Startup Hubs 2017Bernard Moon
Update report that provides an overview of general technology trends, global venture capital trends, and startup trends around the world. Snapshots of the top 10 startup hubs in the world: Silicon Valley, NYC, London, Stockholm, Shanghai, Tel Aviv, Beijing, Seoul, Boston, and Los Angeles.
A round up of resources (websites, blogs and other sources) that I've found useful in 2015 and will continue to do so in 2016. This edition is centered around 3 key trends for 2016.
We suddenly live in a strange and wonderful nexus of digital and physical. Touchscreens let us hold information in our hands, and we touch, stretch, crumple, drag, and flick data itself. Our sensor-packed phones even reach beyond the screen to interact directly with the world around us. While these digital interfaces are becoming physical, the physical world is becoming digital, too. Objects, places, and even our bodies are lighting up with with sensors and connectivity. We’re not just clicking links anymore; we’re creating physical interfaces to digital systems. This requires new perspective and technique for web and product designers. The good news: it’s all within your reach. With a rich trove of examples, Designing for Touch author Josh Clark explores the practical, meaningful design opportunities for the web’s newly physical interfaces.
Guess which business model wins? Begin your evolution today and create the multiplier effect in your own startup organization. Activate your dormant networks.
A study by HBR, neatly summarized by Pranay Sanghavi
Irrational Exuberance: A Tech Crash is ComingJeffrey Funk
These slides apply Nobel Laureate Robert Schiller's concept of irrational exuberance (and a book) title to the current speculative bubble of 2019. Over investments in startups and a lack of profitability in them are finally starting to catch up with the venture capital industry and the tech sector that relies on it. Investments by US venture capitalists have risen about six times since 2001 causing the total invested in 2018 to exceed by 40% the peak of 2000, the last big year of the dotcom bubble. But the number of IPOs has never returned to the peak years of 1993 to 2000; only about 250 were carried out between 2015 and 2017 vs. about 1,200 between 1995 and 1997.
The reason is simple: startups are taking longer to go public because they are not profitable. Consider the data. The median time to IPO has risen from 2.8 years in 1998 to 7.7 years in 2016 and the ones going public are less profitable than they were in the past. Although only 22% of startups going public in 1980 were unprofitable, 82% were unprofitable in 2018. The same high percentages of unprofitability have only been achieved twice before, in 1998 and 1999 right before the dotcom bubble burst. Furthermore, startups that have recently done high profile IPOs such as Snap, Dropbox, Blue Apron, Fitbit, Trivago, Box, and Cloudera are still not profitable.
Where are the Next Googles and Amazons? They should be here by nowJeffrey Funk
Great startups aren’t being founded like they were in the 1970s (Microsoft, Apple, Oracle, Genentech, Home Depot, EMC), 1980s (Cisco, Dell, Adobe, Qualcomm, Amgen, Gilead Sciences), and 1990s (Amazon, Google, Netflix, Salesforce.com, PayPal). All of these startups reached the top 100 for market capitalization, but Facebook is the only startup founded since 2000 which has entered the top 100. Tesla and Uber are often discussed as highly successful but they have many times higher cumulative losses than did Amazon at its time of peak losses and neither has had a profitable year despite being older than Amazon was when it achieved profits. Furthermore, few of the recent Unicorn IPOs have experienced shareprice increases greater than those of the Nasdaq (14 of 45), only 3 of these 14 have profits, and only six of them have a
market capitalization over $30 (Zoom), $20 (Square), and $10 billion (Twilio, DocuSign, Okta). America’s venture capital system isn’t working as well as it once did, and the coronavirus will make things worse before the VC system gets better.
Digital Signals & Access to Finance in Kenya - slidesUN Global Pulse
In emerging markets, eight out of ten small businesses cannot access the loans they need to grow. USAID’s Development Credit Authority (DCA) uses risk-sharing agreements to mobilize local private capital to fill this financing gap. The goal of this collaboration between UN Global Pulse and USAID is to explore how big data could support the work of USAID’s Development Credit Authority.
Kenya has become an established tech leader in Africa in recent years – generating greater volumes of digital data as a result. The goal of this study is to explore what new sources of digital data, and methods for analysis, could be helpful in answering the question: “What barriers to accessing loans do small businesses in Kenya face?”
Accordingly, this presentation paints a picture of the big data landscape in Kenya, shows preliminary findings, and lays the groundwork for further investigation.
With this presentation, you'll undestand :
- Why what is happening in China should matter to you
- How the BATX are disrupting several industries, starting with finance, logistics and healthcare
- Which technologies and business models the BATX believe will be game changers
Global Technology Trends & Startup Hubs 2015Bernard Moon
Provides an overview of general technology trends, global venture capital trends, and startup trends around the world. Snapshots of the top 10 startup hubs in the world: Silicon Valley, NYC, London, Stockholm, Berlin, Tel Aviv, Beijing, Seoul, Boston, and Los Angeles.
Study: The Future of VR, AR and Self-Driving CarsLinkedIn
We asked LinkedIn members worldwide about their levels of interest in the latest wave of technology: whether they’re using wearables, and whether they intend to buy self-driving cars and VR headsets as they become available. We asked them too about their attitudes to technology and to the growing role of Artificial Intelligence (AI) in the devices that they use. The answers were fascinating – and in many cases, surprising.
This SlideShare explores the full results of this study, including detailed market-by-market breakdowns of intention levels for each technology – and how attitudes change with age, location and seniority level. If you’re marketing a tech brand – or planning to use VR and wearables to reach a professional audience – then these are insights you won’t want to miss.
A somewhat longer version of my Frontiers talk about technology and the future of the economy, with additional material pitched to an audience of Internet operators at Apricot 2017, in Ho Chi Minh City, Vietnam on February 27, 2017
Artificial intelligence (AI) has become an important aspect of our everyday life. From a common topic in science fiction and future studies it is now being used in a wide spectrum of day to day services, both for advanced technologies and personal applications. AI seems associated with startups and several companies do develop and promote AI as their unique selling product. However, with almost 7 years of continuous ‘AI’ developments how promising could an AI startup still be? This talk aims to describe the AI challenges as experienced from the eyes of a startup, its challenges and opportunities as well as how connections with lead Universities in the area could help in future synergies.
[Updated 2/27/17] Brian Solis, principal analyst of Altimeter, a Prophet Company, has tracked the autonomous industry for two years and has assembled the most comprehensive report on “The State of The Autonomous Driving.” The updated report features the latest developments among companies driving the future, including 76 automakers, startups and universities. The report also includes an infographic that organizes all of the companies by technology focus and its open to third party creative commons use. This report will be updated regularly, if you would like to contribute updates please contact Brian via email at brian@altimetergroup.com
The Changing Structure of the Venture Capital IndustryMark Suster
I presented this deck at the 2014 PreMoney Conference. I wrote a blog post here that goes into more detail: http://bit.ly/ChangingVC
The video of the presentation I gave is here: http://youtu.be/5MClCBUjbbE
The VC industry is changing. The press has focused on the wrong story - crowd funding. The bigger story is the shift from public financing to private financing and the bifurcation of the venture industry. This presentation examines the case.
Global Technology Trends & Top Ten Startup Hubs 2016Bernard Moon
Update report that provides an overview of general technology trends, global venture capital trends, and startup trends around the world. Snapshots of the top 10 startup hubs in the world: Silicon Valley, NYC, London, Stockholm, Berlin, Tel Aviv, Beijing, Seoul, Boston, and Los Angeles.
by Benedict Evans. Please see this link for full description, slides, AND version with talk track: http://a16z.com/2016/12/09/mobile-is-eating-the-world-outlook-2017/
Global Technology Trends & Top Ten Startup Hubs 2017Bernard Moon
Update report that provides an overview of general technology trends, global venture capital trends, and startup trends around the world. Snapshots of the top 10 startup hubs in the world: Silicon Valley, NYC, London, Stockholm, Shanghai, Tel Aviv, Beijing, Seoul, Boston, and Los Angeles.
A round up of resources (websites, blogs and other sources) that I've found useful in 2015 and will continue to do so in 2016. This edition is centered around 3 key trends for 2016.
We suddenly live in a strange and wonderful nexus of digital and physical. Touchscreens let us hold information in our hands, and we touch, stretch, crumple, drag, and flick data itself. Our sensor-packed phones even reach beyond the screen to interact directly with the world around us. While these digital interfaces are becoming physical, the physical world is becoming digital, too. Objects, places, and even our bodies are lighting up with with sensors and connectivity. We’re not just clicking links anymore; we’re creating physical interfaces to digital systems. This requires new perspective and technique for web and product designers. The good news: it’s all within your reach. With a rich trove of examples, Designing for Touch author Josh Clark explores the practical, meaningful design opportunities for the web’s newly physical interfaces.
Guess which business model wins? Begin your evolution today and create the multiplier effect in your own startup organization. Activate your dormant networks.
A study by HBR, neatly summarized by Pranay Sanghavi
Irrational Exuberance: A Tech Crash is ComingJeffrey Funk
These slides apply Nobel Laureate Robert Schiller's concept of irrational exuberance (and a book) title to the current speculative bubble of 2019. Over investments in startups and a lack of profitability in them are finally starting to catch up with the venture capital industry and the tech sector that relies on it. Investments by US venture capitalists have risen about six times since 2001 causing the total invested in 2018 to exceed by 40% the peak of 2000, the last big year of the dotcom bubble. But the number of IPOs has never returned to the peak years of 1993 to 2000; only about 250 were carried out between 2015 and 2017 vs. about 1,200 between 1995 and 1997.
The reason is simple: startups are taking longer to go public because they are not profitable. Consider the data. The median time to IPO has risen from 2.8 years in 1998 to 7.7 years in 2016 and the ones going public are less profitable than they were in the past. Although only 22% of startups going public in 1980 were unprofitable, 82% were unprofitable in 2018. The same high percentages of unprofitability have only been achieved twice before, in 1998 and 1999 right before the dotcom bubble burst. Furthermore, startups that have recently done high profile IPOs such as Snap, Dropbox, Blue Apron, Fitbit, Trivago, Box, and Cloudera are still not profitable.
Where are the Next Googles and Amazons? They should be here by nowJeffrey Funk
Great startups aren’t being founded like they were in the 1970s (Microsoft, Apple, Oracle, Genentech, Home Depot, EMC), 1980s (Cisco, Dell, Adobe, Qualcomm, Amgen, Gilead Sciences), and 1990s (Amazon, Google, Netflix, Salesforce.com, PayPal). All of these startups reached the top 100 for market capitalization, but Facebook is the only startup founded since 2000 which has entered the top 100. Tesla and Uber are often discussed as highly successful but they have many times higher cumulative losses than did Amazon at its time of peak losses and neither has had a profitable year despite being older than Amazon was when it achieved profits. Furthermore, few of the recent Unicorn IPOs have experienced shareprice increases greater than those of the Nasdaq (14 of 45), only 3 of these 14 have profits, and only six of them have a
market capitalization over $30 (Zoom), $20 (Square), and $10 billion (Twilio, DocuSign, Okta). America’s venture capital system isn’t working as well as it once did, and the coronavirus will make things worse before the VC system gets better.
Digital Signals & Access to Finance in Kenya - slidesUN Global Pulse
In emerging markets, eight out of ten small businesses cannot access the loans they need to grow. USAID’s Development Credit Authority (DCA) uses risk-sharing agreements to mobilize local private capital to fill this financing gap. The goal of this collaboration between UN Global Pulse and USAID is to explore how big data could support the work of USAID’s Development Credit Authority.
Kenya has become an established tech leader in Africa in recent years – generating greater volumes of digital data as a result. The goal of this study is to explore what new sources of digital data, and methods for analysis, could be helpful in answering the question: “What barriers to accessing loans do small businesses in Kenya face?”
Accordingly, this presentation paints a picture of the big data landscape in Kenya, shows preliminary findings, and lays the groundwork for further investigation.
With this presentation, you'll undestand :
- Why what is happening in China should matter to you
- How the BATX are disrupting several industries, starting with finance, logistics and healthcare
- Which technologies and business models the BATX believe will be game changers
Global Technology Trends & Startup Hubs 2015Bernard Moon
Provides an overview of general technology trends, global venture capital trends, and startup trends around the world. Snapshots of the top 10 startup hubs in the world: Silicon Valley, NYC, London, Stockholm, Berlin, Tel Aviv, Beijing, Seoul, Boston, and Los Angeles.
Study: The Future of VR, AR and Self-Driving CarsLinkedIn
We asked LinkedIn members worldwide about their levels of interest in the latest wave of technology: whether they’re using wearables, and whether they intend to buy self-driving cars and VR headsets as they become available. We asked them too about their attitudes to technology and to the growing role of Artificial Intelligence (AI) in the devices that they use. The answers were fascinating – and in many cases, surprising.
This SlideShare explores the full results of this study, including detailed market-by-market breakdowns of intention levels for each technology – and how attitudes change with age, location and seniority level. If you’re marketing a tech brand – or planning to use VR and wearables to reach a professional audience – then these are insights you won’t want to miss.
A somewhat longer version of my Frontiers talk about technology and the future of the economy, with additional material pitched to an audience of Internet operators at Apricot 2017, in Ho Chi Minh City, Vietnam on February 27, 2017
Artificial intelligence (AI) has become an important aspect of our everyday life. From a common topic in science fiction and future studies it is now being used in a wide spectrum of day to day services, both for advanced technologies and personal applications. AI seems associated with startups and several companies do develop and promote AI as their unique selling product. However, with almost 7 years of continuous ‘AI’ developments how promising could an AI startup still be? This talk aims to describe the AI challenges as experienced from the eyes of a startup, its challenges and opportunities as well as how connections with lead Universities in the area could help in future synergies.
[Updated 2/27/17] Brian Solis, principal analyst of Altimeter, a Prophet Company, has tracked the autonomous industry for two years and has assembled the most comprehensive report on “The State of The Autonomous Driving.” The updated report features the latest developments among companies driving the future, including 76 automakers, startups and universities. The report also includes an infographic that organizes all of the companies by technology focus and its open to third party creative commons use. This report will be updated regularly, if you would like to contribute updates please contact Brian via email at brian@altimetergroup.com
The Changing Structure of the Venture Capital IndustryMark Suster
I presented this deck at the 2014 PreMoney Conference. I wrote a blog post here that goes into more detail: http://bit.ly/ChangingVC
The video of the presentation I gave is here: http://youtu.be/5MClCBUjbbE
The VC industry is changing. The press has focused on the wrong story - crowd funding. The bigger story is the shift from public financing to private financing and the bifurcation of the venture industry. This presentation examines the case.
Every year Upfront Ventures surveys our peer group for their sentiment on the fund raising environment, burn rates, areas of technology interest and the year ahead. This report summarizes the views as of January 2017.
Presentation from Blue Glass conference on marketing in the era of search, social and video and how many people are wasting money by advertising where there is banner blindness or measuring vanity metrics.
Want to build an online video company? Interested in the YouTube MCN space? Learn some lessons from one of the first and largest investors in this space- Mark Suster of Upfront Ventures. The doc will give you guidance on how to build more profitably.
Upfront LP Survey of the Venture Capital & Startup IndustryMark Suster
Upfront Ventures surveyed Limited Partners (LPs) on their outlook on the venture capital markets and the underlying technology startups we back. This presentation created in Q1 2017 shares this outlook.
A 2016 overview of the technology & venture capital industries in Los Angeles presented by Mark Suster, Managing Partner of Upfront Ventures for the Mayor's LP / VC Summit.
Venture Capital Unlocked (Stanford) / Venture Capital 2.0Dave McClure
slides for my "Venture Capital 2.0" opening talk at Stanford School Continuing Studies, VC101 class "Venture Capital Unlocked" #VCunlocked #500startups
Perspective on Innovation in Asset ManagementThierry Zois
These slides will give you a good overview on the current asset management market in Europe, South East Asia and US.
Finch believes that it is currently in the right position to be disrupted - come figure out why.
The Changing Relationship Between Investors and Investments OurCrowd
Take this opportunity to meet OurCrowd’s new president, Anthony DeChellis, who brings to the discussion his extensive experience in the private banking and institutional finance world. Anthony previously served as CEO of Private Banking Americas at Credit Suisse, headed Private Wealth Management at UBS, and held a range of leadership positions at Merrill Lynch, including Manager of the European Private Banking Business.
Demystifying FinTech - Webinar in cooperation with EmeritusRudolfFalat
From this recording of the live event, in cooperation with Emeritus, hosted by Rudolf Falat, founder of the Voice of FinTech podcast, you will learn:
DEMYSTIFY key terms and frameworks in Financial Technology (FinTech)
LEARN how to formulate and communicate key questions that can be addressed through the use of FinTech
HEAR real-world applications of FinTech through case studies
DISCOVER opportunities to advance FinTech skills
TOOLKIT: Templates for Powerpoint, Excel Tools & Spreadsheet TemplatesAurelien Domont, MBA
Go to www.slidebooks.com to Download and Reuse Now a Toolkit including 100+ Templates for Powerpoint, Excel Tools & Spreadsheet Templates| Created By ex-McKinsey & Deloitte Consultants.
How Digital Economic Development Enables Communities to Expand Their Impact, ...Ben Wright
Digital Economic Development is any interaction you have with an employee, colleague, prospect, partner, or otherwise that is made more efficient, enhances, or is made possible by digital communications tools.
We're in the midst of the best market to sell a software, Internet or related technology company in more than a decade. If you're considering taking advantage, you won't want to miss this in-depth conversation with a tech CEO who just sold the company he founded nearly 10 years ago. Kevin Linden just sold his firm Email Direct to j2 Global, one of the top buyers of software companies right now. Learn how he did it, what he learned, what surprised him and much more. Plus, a special report on the hot gaming M&A market.
Open U Talk from the Institute of Financial Technologists of AsiaNicole Kuo
Founder of Institute of Financial Technologists, Mr. Paul Pong's, talk for MBA students at the Open University of Hong Kong. Outlining opportunities and effect from Chinese depositary receipt and weighted voting rights. Also urging the needs of lack of fintech talents in the industry!
On Oct 27, 2017, Digital Currency Group hosted its third annual Tech Summit - three days of private events focused on bringing together our network of digital currency and blockchain tech focused founders, investors, and corporate strategics. These are the opening remarks presented by DCG's founder and CEO, Barry Silbert, regarding the progress the bitcoin and blockchain ecosystem over the last year, and what DCG is excited about looking forward. DCG's Investment Associate, Travis Scher, shares his outlook on ICOs and token sales. DCG's Director of Development, Meltem Demirors, highlights growth metrics across the digital currency and blockchain startup ecosystem and shares insights on the evolution of business models and ongoing challenges to startups in the space.
Crowdsourcing Week 2015 - Equity crowdfunding: How to design and execute you...Crowdonomic
During Crowdsourcing Week 2015 in Singapore, Nicola Castelnuovo, CCO of Crowdonomic (www.crowdonomic.vc) enlightens startups on how to design and execute an equity crowdfunding campaign.
The seed stage of the venture capital industry went through a boom cycle from 2006-2014 but has lately seen a sharp decline. What's happening? Is it temporary or are their structural problems? This deck answers that question.
A look at the Venture Capital industry heading into 2020. Some have questioned whether the industry has a future. This deck does a detailed look at where the industry is and why the future of VC still looks bright.
If you want to understand how decisions are made at a VC firm it is important to understand the staff who work there. Here is a guide but you can also read more at this blog post: https://bothsidesofthetable.com/how-to-improve-your-odds-of-getting-to-yes-with-a-vc-land-and-expand-b46a0a102a07
Upfront Ventures surveys VC firms every year to gauge their views on technology markets. This year we asked people their views about cryptocurrencies & blockchain.
Upfront Ventures blockchain and crypto deckMark Suster
Mark Suster of Upfront Ventures gives a presentation primer on Cryptocurrencies & Blockchain. This is best consumed with a video that will be released and available on Upfront's YouTube page: https://www.youtube.com/user/upfrontventures/videos
Fundstrat Bitcoin & Blockchain presentation for Upfront SummitMark Suster
An equity analyst case for the value in cryptocurrencies. Thomas Lee of Fundstrat was lead equity researcher for JP Morgan before founding Fundstrat. He takes a market approach to valuing Bitcoin and other cryptocurrencies. Here is his presentation for the #UpfrontSummit 2018.
4. 1
The dot-com boom caused too much
LP money to come into VC
Source: Prequin. Includes all LP investment into US VC funds with IT & Digital Media focus. Excludes funds
with hardware & nanotech focus, non-$USD funds, funds with undisclosed amounts, & funds without first close
4
$3
$5
$7
$12
$31
$50
$26
$8
$6
$13
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Commitments from LPs to U.S. Tech VC funds ($B)
5. This in turn caused too many VCs to
enter the market
Source: Prequin. Includes all LP investment into US VC funds with IT & Digital Media focus. Excludes funds
with hardware & nanotech focus, non-$USD funds, funds with undisclosed amounts, & funds without first close
5
33
38
66
77
109
163
90
67
49
68
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
No. of funds raised by U.S. Tech VC firms
2
6. As a result, the startup ecosystem
became over-capitalized
Source: PWC/NVCA MoneyTree Report6
$250 $550 $628
$1,435
$7,465
$11,232
$1,150
$328 $400 $482
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
First institutional money raised by Internet Co's ($M)
3
7. 1997 1998 1999 2000 2001 2002 2003 2004
Exit values of VC backed
co's ($Bn)
M&A trade sales IPOs
1997 1998 1999 2000 2001 2002 2003 2004
No. of VC backed
co. exits
M&A trade sales IPOs
The over-investment was followed by a
period of greatly reduced exits
Source: Thomson Reuters7
$42
$27
$178
$142
$40
$32
$38
$92
273 268
611
537
404 392 369
503
4
8. The math is simple …
8
LP money
# of VCs
Exits (#, value)
VC fundings (deals, size, value)
Poor performing asset class 1999-2007
DUH.=
9. And as we know, the hangover
from this over-investment lasted a
decade
9
10. Will the road ahead be the same?
Let’s look at the facts …
10
11. There are 50x more Internet users
today (33% of world population)
Sources: U.S. Bureau of the Census, World Bank. As of Q2 June 2012.11
44
411
1,019
2,019
2,406
1995 2000 2005 2010 2012
World Internet users (M)
1
12. NOW1995
Online speeds are over 180x faster
Source: Akamai ‘s State of the Internet Q1 201412
56 Kbps
modems
10.5 Mbps
average U.S.
Internet
connection
speed!
2
13. People are mobile: connected
everywhere, all the time
Source: 2014 Statista forecasts13
• Personal
• Location
aware
• At point of
purchase
US smartphone users
164m
Up 13.4% from 2013
US tablet users
119m
Up 20.5% from 2013
3
14. Everybody is socially connected
driving viral growth at faster rates
14
Monthly active
users255M
Monthly active
users1.3B+
Global registered
members300M+
Hours of video watched
each month by 1B+ users6B+
4
15. We all have credit cards on file with a
single click to purchase
Sources: eMarketer, WSJ15
Global ecommerce spend
$1.5 trillion1 billion
Digital shoppers worldwide
The Apple app ecosystem alone estimated
to be $35 billion in 2014 (from $0 in 2008)
5
16. • Education (remote learning)
• Healthcare (doc on demand)
• Defense (drones)
Economic pressures + improved
telepresence will transform industries
such as …
16
6
17. Industry right sized to pre dot-com
levels
Source: Prequin. Includes all LP investment into US VC funds with IT & Digital Media focus. Excludes funds
with hardware & nanotech focus, non-$USD funds, funds with undisclosed amounts, & funds without first close
17
$3
$50
$16
$9
$16
1995 2000 2005 2010 2012
Commitments from LPs to U.S.
Tech VC funds ($B)
33
163
74
50
65
1995 2000 2005 2010 2012
No. of funds raised by U.S.
Tech VC firms
7
18. In fact, FLAG Capital estimates the number
of active tech VCs is less than 100
Source: Thomson Venture Economics, NVCA Yearbook 2013, FLAG internal analysis18
441
119
75 86
2000 2005 2010 2012
Number of active U.S. VC firms
Via FLAG Capital - “active” defined as making at least $1 million in venture investments per quarter for 4 quarters in a given year
20. Think about it …
20
50x users, 180x bandwidth, 6x time
spent online
Mobile, social, credit-card ready
LP money, active VCs
Global economic pressure
Amazing opportunity set for VC for 2010-2020
DUH.=
21. But our industry has
clearly changed.
VCs (and LPs) can’t
be complacent.
21
22. Entrepreneurs need less capital to start
a company
22
$5m
$500k
$50k
$5k
1995 2005 2010 2014
Technology
Drivers
Open
Source
Cloud +
AWS
Developers Start
Companies
99% reduction
1
23. • Angels
• Incubators / Accelerators
• Seed funds
• VCs
• Crowdsourcing
With less $$ required there are many
more sources from which to raise
money
23
2
24. Entrepreneurs expect much more
transparency
24
Fred Wilson
AVC
Chris Dixon
Chris Dixon
Brad Feld
Feld Thoughts
Mark Suster
Both Sides
of the Table
Ben Horowitz
ben‘s blog
Josh Kopelman
Redeye VC
Bryce Roberts
Bryce Dot VC
Jeff Bussgang
Seeing Both
Sides
Bill Gurley
Above the
Crowd
Manu Kumar
K9 Ventures
3
25. How important is blogging / transparency?
52% say critical to VC decision. 96% prefer it
Source: Upfront Ventures Survey data25
96%
52%
44%
4%
Essential or important Nice to have Negative, not wanted
26. • Servers
• Routers
The plumbing & infrastructure phase
was & is dominated by Silicon Valley
26
• Switches
• Databases
• Browsers
• Search
4
27. But increasingly there have been regional
successes in monetizing the web at a
higher layer (the three C’s)
27
• Content
• Commerce
• Communications
4
28. Not surprisingly some of the best performing new
funds are not from traditional strongholds
28
29. Seed
Stage
Early
Stage
Later
Stage
The LP market (led by Cendana
Capital) has started to recognize the
value of the seed stage VC market
29
$50M $150-300M $500M+
Many Great
Emerging VC Funds
5
30. But LP money has largely becoming
concentrated in Growth VC funds
(> $500m)
*Q1 2014. Source; Q2 2014 PitchBook US Venture Industry Data Sheet30
5
39% 35%
43%
67%
59%
26%
66%
2008 2009 2010 2011 2012 2013 2014*
Share of VC $ funds raised > $500M
Represents only 8% of total funds raised
31. This bifurcation has led to a gap in the
traditional VC A/B round market
31
Seed
Stage
Early
Stage
Later
Stage
$50M $150-300M $500M+
Market Gap
5
32. Yet in the past 30 years, Traditional Early-
Stage VC has out-performed other stages
2/3 of the time
Source: Cambridge Associates
Includes: data from 1,470 funds from 1981-201232
9%
25%
66%
Multi-stage
Late-stage
Early-stage
VC Annual Fund Performance
33. Big market shifts: the VC industry is changing
33
Funding sources
Transparency / operation experience
New competitive dynamics in VC
=
Capital to start, age of founders
Regional successes (tech & VC)
Concentration of LPs in “mega-funds”
35. Entrepreneurs want thought leadership
as well as operational experience
Source: Upfront Ventures Survey data35
Important or very important when choosing a VC
34%
47%
49%
52%
60%
67%
68%
70%
70%
87%
87%
Location
Name / firm achievement
Access to portfolio network
Transparency (blog or public voice / opinion)
Recruiting support
Ability to help with access to customers
M&A support
Ability to attract other VCs
Ability to help with marketing your company
Industry experience / thought leadership
Operational experience
Less
Important
1
36. 36
Seller Buyer
• Distributors
• Physical
locations
• Brokers
Cutting Out
VCs encourage all of their portfolio
companies to “go direct” to consumers
37. • Blogging
• Social media
• Video
• Teaching
Modern VCs have used the same “direct
to customer” tools for competitive
advantage
37
Direct to our customer (entrepreneurs)
Thought leadership > old boys club
More effective for volume
2
38. • Boards meet 6-8 times per year
• Mentor, decide key issues & replace CEO if necessary
• While boards play a vital role, it’s clear they can’t
solve all problems
The old VC model relied mostly on “VC
knows best” & board interaction
38
39. • More time
• Closer in skills
• Recent methods
We know that kids learn
much better from peers
than parents
39
40. • CEO summits
• Expert universities
• Business support
• Tools
• Incentives
New VC “platforms” recognize the
importance of peer learning,
participation
40
Some Best in
Class Platforms
3
41. • CEO & CTO summits
• Market research / internship projects
• Stock swaps
• Content library
• Easy access to “Second Round Capital”41
42. 42
• CEO workshops
• University style hands-on
learning from key
industry figures
• Video sessions for further
use
43. 43
Leading funds putting big investments
into operational support staff
Some Best in Class Services
4
44. In-house tools & resources
• Recruiting
• PR
• Designers, engineers & execs
• Business development
44
45. • Hands-on support teams for design,
recruiting, marketing & engineering
• Startup Lab workshops
• Events / networking conferences
45
47. 47
One of most important differentiators is
domain knowledge & providing industry
access for deals
Some Best in Class Industry Networks
5
48. • Best domain knowledge & relationships in ad sector
• CEO summits with key industry players
• Ad Agency Days where portfolio presents to buyers of
Ad Tech48
49. • Holds “Future of TV” summits with key industry leaders
• Blog & provide thought leadership on: Online Video,
Ad Tech, Mobile & SaaS
• Strategic LPs / Portfolio meetings49
50. • Took an early market position on “big data” (IA =
information arbitrage)
• Deep financial services relationships / knowledge
• Executive relations at financial data companies like
Reuters, Bloomberg50
51. In summary: The market expects more than
money. VCs can’t be stock pickers. They must
invest in platforms not their pocketbooks.
51
Operational experience
Thought leadership & transparency
Peer-to-Peer platforms
Operational support on recruiting,
accounting, biz dev, design
Industry insights / relationships
52. We’re inspired by what we see our colleagues in
the industry doing. We believe …
Thank You
It’s Morning in Venture Capital