HOW TO INVEST IN TECHNOLOGY BASED STARTUPS

@ashirben@SYDVentures

Andrey Shirben

www.SYD.vc

Andrey Shirben - SYD Ventures

WHAT DO WE INVEST IN?

Mining Real Estate Finance Tech

Traditional Not Really

“Safe” Hell No

ROI Binary

Term 7-10 years

Avg. Investment

10K-10M

Portfolio Share

???

2

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WHY TECH?

• Investing in Tech is usually more about investing in people rather than in ideas

• While it’s a high-risk investment – it can generate a higher upside (when it’s successful of course)

• Making a real contribution to the world of science/technology

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A GROWING SECTOR

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SAY GOODBYE TO YOUR MONEY

The healthiest approach for tech investments

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THE TEAM

• Most valuable part of a start-up company• Can make/brake the idea• Need to be highly motivated,

hungry for success & readyfor some shifting

• Experience is overrated

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THE PRODUCT (RISK ANALYSIS)• Why? What’s the pain?• What’s the business model?• Is the market big enough?• Is there enough marketing budget?

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BE CAREFUL OF:

• Hockey Stick Graphs• Solutions to non-existing problems• Viral promises - it’s not that easy…• Do your own market research – ask around,

consult with people that understand the specific industry

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DON’T BE SCARED OF:

• Young, inexperienced team – most likely they will do anything to prove themselves

• Technology – technical risk can typically be handled, while market mismatch can not…

• Lack of short term revenue• In short - follow your instinct

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WHEN TO INVEST?

• Pre seed• Seed• Round A• Round B

Pro’s & Con’s of investing early vs. later

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VALUATION

• No one actually knows• Traditional methods surely don’t work• Whatever you’re willing to pay

1,000,000

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INVESTOR’S APPROACH

• Think about the best interest of the company• Respect the entrepreneurs• Aim for the long term• Don’t spend much time minimizing the downside

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THE PORTFOLIO APPROACH

• The roulette rule• Let statistics work for you, not against you• Vertical diversification• Geographical diversification• Stage diversification

“NEVER IGNORE A GUT FEELING, BUT NEVER BELIEVE IT IS

ENOUGH...” (ROBERT HELLER)

Andrey ShirbenAndrey@SYD.vc

@ashirben@SYDVentures

www.SYD.vc