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Slides for my talk at TiEConCanada in Ottawa -- Oct 2013.
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@paulsingh #
PAUL SINGH
@paulsingh
THE EVOLUTION OF THE PRIVATE MARKET
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)
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@paulsingh #
A (R)EVOLUTION IN THINKING
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EARLY STAGE STARTUPS
HAVE CHANGED
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STARTUP COSTS LOWER THAN EVER
BUT SCALING STILL COSTS MONEY
CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING
@paulsingh #@paulsingh
WEB GETS BIGGER. WORLD GETS SMALLER.
@paulsingh #@paulsingh
TRACTION IS THE NEW INTELLECTUAL PROPERTYPLATFORMS (SEARCH, SOCIAL & MOBILE) PRIMARILY DRIVING THE CHANGE.
NO LONGER “GOOD ENOUGH” TO DEPEND ON TECH DIFFERENTIATION.
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CAPITAL INCREASINGLY COMMODITIZED
RISE OF THE ANGELS, YO!
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NEW REALITY: MONEY FOLLOWS
FOUNDERSRISE OF THE ENTREPRENEURS, YO!
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SIGNALS ARE EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
@paulsingh #
SIGNALS ARE EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
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TRANSPARENCY IS SIGNALS ARE EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
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WALL STREET BEAT US TO IT
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UBS PROPRIETARY SATELLITE PARKING LOTFILL RATE POINTS TO AN INTERESTING CADENCE INTRA-QUARTER AND POTENTIAL UPSIDE TO OUR VIEW.
“
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TWICE A WEEK A SMALL HELICOPTER CIRCLES OVER CUSHING’S TANK FARMS ON AN INDUSTRY SPYING MISSION
“
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WALL STREET ISN’T ALONE
THESE TECHNIQUES ALREADY USED TO UNDERWRITE IN-VITRO FERTILIZATION LENDING, PAYDAY LOANS, SUBPRIME AUTO LENDING, HOME/PERSONAL/AUTO INSURANCE AND MORE.
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WE CAN DO IT, TOOSURPRISE!
IT TURNS OUT,
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+ “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.
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WE CAN DO IT, TOO.
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WE CAN DO IT, TOO.
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WE’RE DOING IT, TOO.
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@paulsingh #
VENTURE CAPITAL IS OPEN TO ATTACK BY DISRUPTIVE NEW BUSINESS MODELS AND TECHNOLOGY.
“
-- NAVAL RAVIKANT (@naval)
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dashboard.io
@paulsingh #
dashboard.io
@paulsingh #
EARLY STAGE VC IS CHANGING HAS CHANGED
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STATE OF THE ART IN EARLY STAGE INVESTING IS NOT
VERY SOPHISTICATED
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UNBUNDLING OF ADVICE, CONTROL
AND MONEY
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USED TO BE ABOUT CAPITAL, DEALFLOW
AND JUDGEMENTTODAY, IT’S ABOUT ACCESS.
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INCREASINGLY ABOUT DEAL SELECTION,
NOT DEAL SOURCING.IT’S 2013, YO.
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dashboard.io
@paulsingh #
(500) CHECKLISTProduct solves a problem for a specific target customer
Capital-efficient businesses - operational @ <$1M funding
Primarily internet-based distribution - search, social, mobile, local
Simple revenue models - transactions, subscriptions or affiliate
Functional prototype before investment (or previous success)
Small but measurable usage - some customers, early revenue
Small but cross-functional team - engineer, design/UX, marketing
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(NEW) FINANCINGS Standardized terms
No fixed amounts, no closings, no leads
Continuous, not discrete rounds
Prices beginning to float
No Board seats at the earliest stage
Herd mentality and oversubscriptions
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THE FIRST CHECK SHOULD BE SMALL AND FAST
DOUBLE DOWN HEAVY IF THE COMPANY SURVIVES INTO THE NEXT ROUND
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RISK AND UNCERTAINTY ARE
NOT THE SAME
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THE BUSINESS OF INVESTING IS ABOUT CHOOSING THE
LEAST-WORST OPPORTUNITYNOT TRYING TO PREDICT THE NEXT GOOGLE, FACEBOOK OR LINKEDIN.
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BY ITS NATURE, THE INTERNET UNDERMINES ANYONE WHOSE STATUS DEPENDS ON PRIVILEGED ACCESS TO INFORMATION.
“
-- MICHAEL LEWIS
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THE PRIVATE MARKET IS BECOMING MORE
ACCESSIBLE.
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THE PRIVATE MARKET IS BECOMING MORE TRANSPARENT.
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Demo Day Videos ⟹ livestream.com/500startups
Sample Pitch Decks ⟹ slideshare.net/500startups
Venture Capital 101 ⟹ venturehacks.com/archives
Investor Thoughts:
Brad Feld ⟹ feld.com
Fred Wilson ⟹ avc.com
Chris Dixon ⟹ cdixon.org
Mark Suster ⟹ bothsidesofthetable.com
angel.co/valuations and angel.co/salaries
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YOUR KEY TAKEAWAYS
Focus on Traction.
Learn to Communicate and Inspire.
@paulsingh #
ALSO... Distribution > Product
Tactics > Strategy
Notability > Credibility
Get on AngelList
Raise 12-18+ months of funding
Learn the basics of VC economics
Don’t confuse due diligence with progress & probability...
Shameless plug: dashboard.io
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@paulsingh
LEARN MORE:
bit.ly/dashboard-weekly
THE EVOLUTION OF THE PRIVATE MARKET
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)
