Download - Criteria & Themes (Seed Rounds)
VENTURE51 IS A SEED- & EARLY-STAGE FUND BUILT FOR ENTREPRENEURS BY ENTREPRENEURS.
condensed pitch-book
WHY EARLY-STAGEVENTURE CAPITAL
“The third great wave of the Internet is mobile and social together, it’s going to be tectonic.”
-John Doerr
FAVORABLE MEGATRENDSDisruptive emergence of new media
and distributed co-creation moves into the mainstream
Internet and new media tools disrupting production and consumption patterns of content/
media and commerce behavior of consumers
Tectonic shifts in consumer-facing communication, commerce, content & consumption
Convergence problems creates a variety of cloud/client opportunities (both business & consumer landscapes)
Mobile platforms reshaping distribution and consumption paradigms
Macro knowledge and impact-analyses of global consumer trends and mass collaboration at scale
Global demand for consumer-focused technology products and service, and the the emergence of global languages and geographic arbitrage
Nascent tech startup ecosystems beginning to bloom across the globe
HTML5, the new web standard that allows to make interactive web pages, is going to revolutionize the media and advertising industries
User Experience is the new unfairadvantage and the growing importance of user experience and design
The age of the multi-sided business model
URLs for IRL: enabling the Internet of “things” as the offline world is quickly becoming stapled into the future by combining physical representations with
digital ones
Tech 2011+
VCReboot
2011+Economy
Build tech faster, better & cheaper
Traditional VCs continueto exit early stage as their funds are not equipped to play in these early rounds
Companies are earning record-high profits in recent quarters as a result of many of the cost-cutting efforts deployed after the credit crisis and the massive layoffs. These same companies are now looking to innovate thru acquiring early-stage technology startups.
FORMED IN VINTAGE MARKETAverage startup can be launched for under $500K (it’s the new $5M)
Unemployment rate is >10% (April 2010)
Traditional VCs are expected to decrease in the early-stage by 60% through 2012. VCs are leaving early-stage deals because they are sitting on too much capital and will need to focus on legacy positions due to the size of exits over the past decade. (National Venture Capital Association)
$500K IS THE NEW $5M
Date of first cashflow positive
VC
Burn
Date of cashbreakeven
Web 1.0
Web 1.0 Traditional J-Curve
Old Way
Small Dipsof Capital
Web 2.0
Web 1.0
Traditional
Web 2.0 Curve
Kinda Old Way
Source: Web 2.0 Strategy Guide
2011 STARTUP CURVE
Web 2.0
Web 1.0
Traditional
The new tech startup costs under $500K to get to market and build value. The new tech startup also gets to market 10X faster in todays real-time build.
Even Smaller Dips of Capital
Tech 2011 Similar to the web 2.0 curve but with even cheaper startup costs and more realistic growth acceleration.
BUYING POWERCompanies are earning record-high profits in recent quarters as a result of many of the cost-cutting efforts deployed after the credit crisis and the massive layoffs. These same companies are now looking to innovate thru acquiring early-stage technology startups.
Highly Acquisitive Tech Giants
Actively Acquisitive Tech Up & Comers
Actively Acquisitive Tech Giants
Actively Acquisitive Consumer & Media Giants
privately owned companies, consumer facing brands needing to innovate thru technology, digital media agencies and lower-cap tech companies needing to innovate all have cash on hand.
1000+ OTHER COMPANIES
SEED, DISCOVER, PILE ON & ACCELERATE(Seed, discover or help achieve P/M Fit thru our shared network & in-house expertise, pile on & buckle up)
Acceleration Resources
Follow-On Placement (back the truck up and pile on)
Lean/Agile Startup Model - Achieving Product/Market Fit thru Customer Development
Advisor & Mentor
Network
StartupEnablementResources
AppDev
Resources
MarketingResources
BizDev
ResourcesM&A
Resources
Seed-and Early-Stage Capital Placement
INFORMATION TECHNOLOGY
THEMATIC BLENDED-THESIS DRIVEN APPROACHa hybrid philosophy to startup investing in Information Technology (with emerging Intersections)
THEMES
OUR THESIS IS THE - HOW WE INVESTWhat we look for in foundersWhat we look for in companiesWhat we look for in productsWhat we look for in mind-set & cultureWhat we look for in extended teamWhat geographies we look at
OUR CORE IS I.T.
OUR THEMES ARE THE - WHERE WE INVESTThese are the segments we’ve developed themes around for the next 3-5 year period where we will invest. These themes can span categories as they’re often built on standards, protocols, and widely adopted technical viewpoints.
•Native Consumers & Digital Families•Mobile Life•Business “Consumerization”•Real-Time Data•New Commerce•Plumbing
THESIS
EMER
GING
INTE
RSEC
TION
S
INVESTMENT THEMES
Venture51 will leave open a small percentage for newly identified emerging opportunities.
CONSUMER INTERNET
BUSINESS INTERNET & DATA
MOBILE SOFTWARE & SERVICES
REAL-TIME & SOCIAL INTERNET
MOBILE/SOCIAL GAMING
OTHER & EMERGING
ECOMMERCE & DISRUPTIVE MODELS
INFRASTRUCTURE & BACKEND
•Streaming Video•Videosharing•Parenting/Safety •Travel & Planning•Photosharing•Lifestreaming•Adtech•Edtech
•Location-based Services•Gaming•Local Discovery•Mobile Payments &
Transactions•Geo Loc•Mobile APIs• ioS, Android, BB &
Windows•Learning•Proximity-Based
Marketplaces
•Curation•Big data &
Monetization•Crowd-sourcing•Time-Relevant Data•Twitter & Facebook
Ecosystem•Social Layer• Interest Layer•API Platforms
•Virtual Gaming•Multiplayer Online
Games•Social Casual Games•Mobile Gaming•Educational Gaming•Virtual Worlds•Game Mechanics
•Demand Aggregation•Game Mechanic
Commerce•Mobile - Hyper Local•Flash/Group Sales•Micro-transactions•Virtual Goods•Virtual Currencies•Flash Pricing•Group Pricing•DaaS•Freemium•API Call Services
•Real-time Analytics•Enterprise
Applications•SMB Consumerization•Data Mining•Mobile Enterprise•Storage•Events
•Cloud•Application
infrastructure•Applications software•Networking, storage &
databases (application layer)•Back-end systems•APIs•Development tools
NATIVE CONSUMERS & DIGITAL FAMILIES MOBILE LIFE BUSINESS
CONSUMERIZATIONREAL-TIME
DATANEW COMMERCENEW ECONOMICS PLUMBING
HIGHESTPRIORITY
HIGHPRIORITY
INVESTMENT THESISFounders & Management (with Technical & UX/UI/IxD Chops)We are hugely in favor of the technical founder. We will generally focus on companies started by strong technologists who know exactly what they want to build and how they are going to build it.
Scalable Information Technology While there are many exciting new entrepreneurial opportunities in fields like energy, transportation and clean, there continues to be a massive opportunity in Information Technology — which is where we will focus.
Agile AdvisoryWe love getting our hands dirty and shaking trees. We grow our startups through active participation, leveraging our operational expertise (product, marketing & distribution) and professional network
Business Pivots, Not Business PlansYour business plan is wrong. It’s a prediction of the future that is out of date as soon as you hit save, print or send. Things change. Competition. Timing. Costs. Pricing.
Deal Size & Flexible Investment StructuresAs seed and early stage investors, we often provide a company's first outside capital – and typically invest alongside angel investors, angel syndicates or seed syndicates.
Smaller Initial Bets, Bigger Follow-OnOur investment strategy is simple, invest before product/market fit, measure/test to see if the team is finding it, and if so, then exercise our pro-rata follow-on investment opportunity after they have achieved product/ market fit.
Capital Efficient Startups The most important factor, however, is the capital efficiency we are seeing in our and partner’s portfolio companies. Startups simply don't need as much money as the companies did 5 years ago, 10 years ago, or 15 years ago.
VelocityVelocity is key to faster success or faster failure. Arriving at either one of these outcomes faster is better. The reason to go fast is not so much that it's critical to get your product to market early, but that you haven't really started working on it till you've launched and put it in contact with users.
Grounded in Customer Development We look for product/market fit through the lens of Customer Development. We invest smaller amounts of capital prior to product/market fit and double down afterwards.
Product, Market(ing) & ScaleMarketing is a function of a market, and we deeply believe you can not succeed without both. However, We believe that the product is the heart of any technology company. The company gets built around the product.
Addressable Market We seek to fund companies that provide a unique solution to an existing urgent need in an addressable market. And we typically avoid companies that try to change consumer behavior or create a new consumer need.
Defensibility Good companies are built on a valuable data asset. As these systems the companies build accumulate data over time, they increase the value of the product and make it more difficult for newer services to deliver an equivalent experience. Defensibility lies in the data.
HARDCORE DESIGN-DRIVEN THESISUser Research Research is interwoven into all user experience roles – the inspiration and validation of ideas and designs greatly enhances the chance of success in meeting your design objectives.
Front-end Stack (toolset)the collection of front-end web-standards technologies—(X)HTML (of any flavor), CSS, and JavaScript—as “the web stack”
Visual DesignVisual design (aka Visual Communication, Information Design is primarily concerned with clearly communicating the aesthetic, personality and function of a system and to invoke feeling.
Backend Knowledgeto back-end technologies. Those things are important, certainly, but not from the front-end point of view. A browser doesn’t care if your page was generated by PHP, Django, Rails, Perl
Information Architecture (IA)IA entails designing an information system and the users’ pathways through it. The IA’s goal is to create a system that will provide useful information to suit the user’s context.
Conversion Metrics/ User FlowsGaining visibility into what’s working and what’s not in your products. Measure what’s happening and help tune your user experience and help eople understand and create user flows.
UI/UX . User experience highlights the experiential, affective, meaningful and valuable aspects of human-computer interaction and product ownership, but it also includes a person’s perceptions of the practical aspects such as utility, ease of use and efficiency of the system
Story Telling/CopywritingGood writers can effortlessly guide users through an interface with concise instructional copy.
IxD The Interaction Designer is a story-weaver – scripting the narrative between man and machine – the dialogue of system response to user action
Creative Vision/Business Model While there are many exciting new entrepreneurial opportunities in fields like energy, transportation and clean, there
35-50male
Design Founder
EMERGING INTERSECTIONS
WEBCONSUMER INTERNET
SMART DATA
CLOUD
CROWD FUELED
CAPITALEFFICIENT
ENTERPRISE
MOBILE
DISTRIBUTION
EDUCATION
INVESTMENT STAGE
Series A Investment
Series B Investment
Series C Investment
Concept / Prototype
Customer Discovery & Validation
Proof of Concept / Product-Market Fit
First Commercial Success / Marketing /
DistributionFully Operational /
ScaleGrowth Exit: M&A/
IPO
Early-Stage / Super Seed Investment
Amount of Money
Startup Stage
Founder Funded
Seed/Super Angel/Micro-VCInvestmentAngel / Friends &
Family / Advisory
Mezzanine
Series D Investment
Business Model Scale
GEO AGNOSTICSeattle
Silicon Valley
Southern Cal
Boulder
Austin
New York
Boston
Vancouver
Atlanta