the business of (tech) startups - naiop va business of (tech... · @paulsingh (500) checklist...
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@paulsingh
THE BUSINESS OF (TECH) STARTUPSTHE (GROWING) INTERSECTION OF VC,
HIGH-GROWTH TECH COMPANIES & CITIES
@paulsingh
500 STARTUPS
@paulsingh
A (R)EVOLUTION IN THINKING
@paulsingh @paulsingh
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.
@paulsingh @paulsingh
CAPITAL INCREASINGLY COMMODITIZED
RISE OF THE ANGELS, YO!
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NEW REALITY: MONEY FOLLOWS
FOUNDERSRISE OF THE ENTREPRENEURS, YO!
@paulsingh
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
@paulsingh
TRANSPARENCY IS SIGNALS ARE EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC
@paulsingh
WALL STREET BEAT US TO IT
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@paulsingh
UBS PROPRIETARY SATELLITE PARKING LOTFILL RATE POINTS TO AN INTERESTING CADENCE INTRA-QUARTER AND POTENTIAL UPSIDE TO OUR VIEW.
“
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@paulsingh
TWICE A WEEK A SMALL HELICOPTER CIRCLES OVER CUSHING’S TANK FARMS ON AN INDUSTRY SPYING MISSION
“
@paulsingh
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.
@paulsingh
WE CAN DO IT, TOO.
@paulsingh
WE’RE DOING IT, TOO.
@paulsingh
@paulsingh
VENTURE CAPITAL IS OPEN TO ATTACK BY DISRUPTIVE NEW BUSINESS MODELS AND TECHNOLOGY.
“
-- NAVAL RAVIKANT (@naval)
@paulsingh
more details: hubble.disruption.vc
@paulsingh
EARLY STAGE VC IS CHANGING HAS CHANGED
@paulsingh
STATE OF THE ART IN EARLY STAGE INVESTING IS NOT
VERY SOPHISTICATED
@paulsingh
UNBUNDLING OF ADVICE, CONTROL
AND MONEY
@paulsingh
USED TO BE ABOUT CAPITAL, DEALFLOW
AND JUDGEMENTTODAY, IT’S ABOUT ACCESS.
@paulsingh
@paulsingh
INCREASINGLY ABOUT DEAL SELECTION,
NOT DEAL SOURCING.IT’S 2014, YO.
@paulsingh
more details: hubble.disruption.vc
@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
@paulsingh
(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
@paulsingh
THE FIRST CHECK SHOULD BE SMALL AND FAST
DOUBLE DOWN HEAVY IF THE COMPANY SURVIVES INTO THE NEXT ROUND
@paulsingh @paulsingh
RISK AND UNCERTAINTY ARE
NOT THE SAME
@paulsingh
THE BUSINESS OF INVESTING IS ABOUT CHOOSING THE
LEAST-WORST OPPORTUNITYNOT TRYING TO PREDICT THE NEXT GOOGLE, FACEBOOK OR LINKEDIN.
@paulsingh
ECONOMIC DEVELOPMENT HAS CHANGED
@paulsingh
THE AGE OF THE INDUSTRIAL CITY
IS OVER
@paulsingh
NOW POSSIBLE TO BUILD BILLION DOLLAR
COMPANIES IN T-SHIRTS FROM A COUCH
@paulsingh
FROM ANYWHERE*
@paulsingh
MORE THAN TRADITIONAL INDUSTRIES, KNOWLEDGE ECONOMY HAS AN INHERENT TENDENCY TOWARDS GEOGRAPHIC AGGLOMERATIONADVANTAGES MATTER, AND THE FUTURE DEPENDS HEAVILY ON THE PAST.
THE SUCCESS OF A CITY FOSTERS MORE SUCCESS, AS COMMUNITIES THAT CAN ATTRACT SKILLED WORKERS AND GOOD JOBS TEND TO ATTRACT EVEN MORE.
“
-- ENRICO MORETTI
@paulsingh
NEAR PERFECT CORRELATION BETWEEN
URBANIZATION AND PROSPERITY
@paulsingh
NEAR PERFECT CORRELATION BETWEEN PRESENCE OF SMALL
FIRMS AND THE LATER GROWTH OF A REGION*
@paulsingh
TECH COMPANIES WILL NEVER CREATE THE MAJORITY OF JOBS
@paulsingh
TECH COMPANIES HAVE A DISPROPORTIONATELY
POSITIVE EFFECT ON THE ECONOMY
@paulsingh
WHAT HAPPENS IN THE TECH SECTOR DETERMINES THE SALARY OF MOST PEOPLE, WHETHER THEY WORK IN
TECH OR NOT
@paulsingh
ALTHOUGH JOBS IN LOCAL SERVICES CONSTITUTE THE VAST MAJORITY OF JOBS, THEY ARE THE ECONOMIC GROWTH.
“-- ENRICO MORETTI
@paulsingh
PROXIMITY IS VALUABLE
@paulsingh
MODERN ECONOMIC DEV
PEOPLE > STRUCTURES
@paulsingh
INVESTORS: INVEST OUTSIDE YOUR
REGION, BRING THE BEST FOUNDERS TO YOUR CITY
@paulsingh
HUGE OPPORTUNITY AT THE POST-SEED,
PRE-A LEVEL
@paulsingh @paulsingh
INVESTORS: INVEST OUTSIDE YOUR
REGION, BRING THE BEST FOUNDERS TO YOUR CITY
@paulsingh
@paulsingh
@paulsingh
@paulsingh
@paulsingh
BY ITS NATURE, THE INTERNET UNDERMINES ANYONE WHOSE STATUS DEPENDS ON PRIVILEGED ACCESS TO INFORMATION.
“
-- MICHAEL LEWIS
@paulsingh
THE PRIVATE MARKET IS BECOMING MORE
ACCESSIBLE.
@paulsingh
THE PRIVATE MARKET IS BECOMING MORE TRANSPARENT.
@paulsingh
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
@paulsingh
THE PRIVATE MARKET IS BECOMING MORE
EFFICIENT.
@paulsingh
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: hubble.disruption.vc
@paulsingh
TECHNOLOGY IS THE FUNDAMENTAL DRIVER OF
GROWTH IN THE INDUSTRIALIZED WORLD
@paulsingh
LEARN MORE: disruption.vc
THE BUSINESS OF (TECH) STARTUPSTHE (GROWING) INTERSECTION OF VC,
HIGH-GROWTH TECH COMPANIES & CITIES