evolution of the private market - motley fool

@paulsingh #moneyball4startups

PAUL SINGH

@paulsingh・paul@dashboard.io・dashboard.io

THE EVOLUTION OF THE PRIVATE MARKET

THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)

@paulsingh #moneyball4startups

@paulsingh・paul@dashboard.io・dashboard.io

500 STARTUPS

@paulsingh #moneyball4startups

@paulsingh #startupchile

A (R)EVOLUTION IN THINKING

@paulsingh #moneyball4startups

EARLY STAGE STARTUPS

HAVE CHANGED

@paulsingh #moneyball4startups

STARTUP COSTS LOWER THAN EVER

BUT SCALING STILL COSTS MONEY

CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING

@paulsingh #moneyball4startups

WEB GETS BIGGER.WORLD GETS SMALLER.

@paulsingh #moneyball4startups

TRACTION IS THE NEW INTELLECTUAL PROPERTYPLATFORMS (SEARCH, SOCIAL & MOBILE) PRIMARILY DRIVING THE CHANGE.

NO LONGER “GOOD ENOUGH” TO DEPEND ON TECH DIFFERENTIATION.

@paulsingh #moneyball4startups

CAPITAL INCREASINGLY COMMODITIZED

RISE OF THE ANGELS, YO!

@paulsingh #moneyball4startups

NEW REALITY: MONEY FOLLOWS

FOUNDERSRISE OF THE ENTREPRENEURS, YO!

@paulsingh #moneyball4startups

SIGNALS ARE EVERYWHERE

BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

@paulsingh #moneyball4startups

SIGNALS ARE EVERYWHERE

BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

@paulsingh #moneyball4startups

TRANSPARENCY ISSIGNALS ARE EVERYWHERE

BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

@paulsingh #moneyball4startups

WALL STREET BEAT US TO IT

@paulsingh #moneyball4startups

@paulsingh #moneyball4startups

UBS PROPRIETARY SATELLITE PARKING LOT FILL RATE ANALYSIS POINTS TO AN INTERESTING CADENCE INTRA-QUARTER AND POTENTIAL UPSIDE TO OUR VIEW.

“

@paulsingh #moneyball4startups

@paulsingh #moneyball4startups

TWICE A WEEK A SMALL HELICOPTER CIRCLES OVER CUSHING’S TANK FARMS ON AN OIL INDUSTRY SPYING MISSION.

“

@paulsingh #moneyball4startups

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.

@paulsingh #moneyball4startups

WE CAN DO IT, TOOSURPRISE!

IT TURNS OUT,

@paulsingh #moneyball4startups

+ “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.

@paulsingh #moneyball4startups

WE CAN DO IT, TOO.

@paulsingh #moneyball4startups

WE CAN DO IT, TOO.

@paulsingh #moneyball4startups

WE’RE DOING IT, TOO.

@paulsingh #moneyball4startups

@paulsingh #moneyball4startups

VENTURE CAPITAL IS OPEN TO ATTACK BY DISRUPTIVE NEW BUSINESS MODELS AND TECHNOLOGY.

“

-- NAVAL RAVIKANT (@naval)

@paulsingh #moneyball4startups

data.dashboard.io

@paulsingh #moneyball4startups

data.dashboard.io

@paulsingh #moneyball4startups

EARLY STAGE VCIS CHANGINGHAS CHANGED

@paulsingh #moneyball4startups

STATE OF THE ART IN EARLY STAGE INVESTING IS NOT

VERY SOPHISTICATED

@paulsingh #moneyball4startups

UNBUNDLING OF ADVICE, CONTROL

AND MONEY

@paulsingh #moneyball4startups

USED TO BE ABOUT CAPITAL, DEALFLOW

AND JUDGEMENTTODAY, IT’S ABOUT ACCESS.

@paulsingh #moneyball4startups

@paulsingh #moneyball4startups

data.dashboard.io

@paulsingh #moneyball4startups

(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 #moneyball4startups

(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 #moneyball4startups

BY ITS NATURE, THE INTERNET UNDERMINES ANYONE WHOSE STATUS DEPENDS ON PRIVILEGED ACCESS TO INFORMATION.

“

-- MICHAEL LEWIS

@paulsingh #moneyball4startups

THE PRIVATE MARKET IS BECOMING MORE

ACCESSIBLE.

@paulsingh #moneyball4startups

THE PRIVATE MARKET IS BECOMING MORE TRANSPARENT.

@paulsingh #moneyball4startups

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 #moneyball4startups

data.dashboard.io

@paulsingh #moneyball4startups

THE PRIVATE MARKET IS BECOMING MORE EFFICIENT.

@paulsingh #moneyball4startups

THE PRIVATE MARKET IS BECOMING MORE EFFICIENT.

AND, SOON, MORE LIQUID.

@paulsingh #moneyball4startups

YOUR KEY TAKEAWAYS

Focus on Traction.

Learn to Communicate and Inspire.

@paulsingh #moneyball4startups

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: data.dashboard.io

@paulsingh #moneyball4startups

@paulsingh・paul@dashboard.io・dashboard.io

THE EVOLUTION OF THE PRIVATE MARKET

THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)LEARN MORE:

bit.ly/dashboard-weekly