Our views on the macro trends, high-level investment strategy (Thematic-Blended Thesis Driven) that we're aligning with in the Information Technology market.
3. “The third great wave of the Internet is
mobile and social together, it’s going to
be tectonic.”
-John Doerr
4. FAVORABLE MEGATRENDS
Disruptive emergence of new media
and distributed co-creation moves
into the mainstream Mobile platforms reshaping distribution
and consumption paradigms
Internet and new media tools disrupting
production and consumption patterns of content/
Macro knowledge and impact-analyses of global
media and commerce behavior of consumers
consumer trends and mass collaboration at scale
Tectonic shifts in consumer-facing communication,
Global demand for consumer-focused technology products
commerce, content & consumption
and service, and the the emergence of global languages and
geographic arbitrage
URLs for IRL: enabling the Internet of “things” as the offline world is quickly
becoming stapled into the future by combining physical representations with User Experience is the new unfair
digital ones advantage and the growing importance of user
experience and design
Convergence problems creates a variety of cloud/client
opportunities (both business & consumer landscapes) 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 The age of the multi-sided
business model
5. FORMED IN VINTAGE MARKET
Average startup can be launched for under $500K
(it’s the new $5M)
Tech 2011+
Unemployment rate is >10% (April 2010)
Build tech faster,
better & cheaper
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)
2011+
VC Economy
Companies are earning record-high
Reboot profits in recent quarters as a result
of many of the cost-cutting efforts
Traditional VCs continue deployed after the credit crisis and
to exit early stage as their the massive layoffs. These same
funds are not equipped to companies are now looking to
play in these early rounds innovate thru acquiring early-stage
technology startups.
6. $500K IS THE NEW $5M
Web 1.0 Traditional J-Curve Web 2.0 Curve
Web 2.0
W ay
W ay ld
Web 1.0
Old Kinda O
Web 1.0
Traditional
Date of first cash
flow positive Small Dips
of Capital
Date of cash
breakeven
VC
Source: Web 2.0
Strategy Guide
Burn
7. 2011 STARTUP CURVE
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.
Web 2.0
Web 1.0
Tech 2011 Similar to the web 2.0 curve but
with even cheaper startup costs
and more realistic growth
acceleration.
Traditional
Even Smaller
Dips of
Capital
8. BUYING POWER
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.
Highly Acquisitive
Tech Giants
Actively Acquisitive
Consumer & Media Giants
Actively Acquisitive
Tech Giants
Actively Acquisitive
Tech Up & Comers
1000+ privately owned companies, consumer facing brands needing to innovate thru technology, digital media
OTHER COMPANIES agencies and lower-cap tech companies needing to innovate all have cash on hand.
9. 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 & Startup App Biz
Mentor Marketing M&A
Enablement Dev Dev
Network Resources Resources
Resources Resources Resources
Seed-and Early-Stage Capital Placement
10. THEMATIC BLENDED-THESIS DRIVEN APPROACH
a hybrid philosophy to startup investing in Information Technology (with emerging Intersections)
THEMES OUR THEMES ARE THE - WHERE WE INVEST
These 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.
EMERGING INTERSECTIONS
•Native Consumers & Digital Families
•Mobile Life
•Business “Consumerization”
•Real-Time Data
•New Commerce
•Plumbing
INFORMATION TECHNOLOGY OUR CORE IS I.T.
THESIS OUR THESIS IS THE - HOW WE INVEST
What we look for in founders
What we look for in companies
What we look for in products
What we look for in mind-set & culture
What we look for in extended team
What geographies we look at
11. INVESTMENT THEMES
HIGHEST HIGH
PRIORITY PRIORITY
NATIVE CONSUMERS & BUSINESS REAL-TIME NEW COMMERCE
MOBILE LIFE PLUMBING
DIGITAL FAMILIES CONSUMERIZATION DATA NEW ECONOMICS
CONSUMER MOBILE SOFTWARE MOBILE/SOCIAL BUSINESS REAL-TIME & ECOMMERCE & INFRASTRUCTURE &
INTERNET & SERVICES GAMING INTERNET & DATA SOCIAL INTERNET DISRUPTIVE MODELS BACKEND
• Streaming Video • Location-based • Virtual Gaming • Real-time Analytics • Curation • Demand Aggregation • Cloud
Services • Multiplayer Online • Big data & • Game Mechanic • Application
• Videosharing • Enterprise
• Parenting/Safety • Gaming Games Applications Monetization Commerce infrastructure
• Travel & Planning • Local Discovery • Social Casual Games • SMB Consumerization • Crowd-sourcing • Mobile - Hyper Local • Applications software
• Photosharing • Mobile Payments & • Mobile Gaming • Data Mining • Time-Relevant Data • Flash/Group Sales • Networking, storage &
Transactions • Educational Gaming • Twitter & Facebook • Micro-transactions databases (application
• Lifestreaming • Mobile Enterprise
• Geo Loc Ecosystem layer)
• Adtech • Virtual Worlds • Storage • Virtual Goods
• Mobile APIs • Game Mechanics • Events • Social Layer • Virtual Currencies • Back-end systems
• Edtech • APIs
• ioS, Android, BB & • Interest Layer • Flash Pricing
Windows • API Platforms • Group Pricing • Development tools
• Learning • DaaS
• Proximity-Based • Freemium
Marketplaces
• API Call Services
OTHER & Venture51 will leave open a small percentage for newly identified emerging opportunities.
EMERGING
12. INVESTMENT THESIS
Scalable Information Technology Founders & Management (with Agile Advisory
While there are many exciting new Technical & UX/UI/IxD Chops) We love getting our hands dirty and
entrepreneurial opportunities in fields like We are hugely in favor of the technical shaking trees. We grow our startups
energy, transportation and clean, there founder. We will generally focus on through active participation, leveraging our
continues to be a massive opportunity in companies started by strong technologists operational expertise (product, marketing
Information Technology — which is where who know exactly what they want to build & distribution) and professional network
we will focus. and how they are going to build it.
Business Pivots, Not Business Deal Size & Flexible Investment Smaller Initial Bets, Bigger
Plans Structures Follow-On
Your business plan is wrong. It’s a As seed and early stage investors, we Our investment strategy is simple, invest
prediction of the future that is out of date often provide a company's first outside before product/market fit, measure/test to
as soon as you hit save, print or send. capital – and typically invest alongside see if the team is finding it, and if so, then
Things change. Competition. Timing. angel investors, angel syndicates or seed exercise our pro-rata follow-on investment
Costs. Pricing. syndicates. opportunity after they have achieved
product/ market fit.
Capital Efficient Startups Velocity Grounded in Customer
The most important factor, however, is the Velocity is key to faster success or faster Development
capital efficiency we are seeing in our and failure. Arriving at either one of these We look for product/market fit through the
partner’s portfolio companies. Startups outcomes faster is better. The reason to go lens of Customer Development. We invest
simply don't need as much money as the fast is not so much that it's critical to get smaller amounts of capital prior to product/
companies did 5 years ago, 10 years ago, your product to market early, but that you market fit and double down afterwards.
or 15 years ago. haven't really started working on it till
you've launched and put it in contact with
users.
Product, Market(ing) & Scale Addressable Market Defensibility
Marketing is a function of a market, and We seek to fund companies that provide a Good companies are built on a valuable
we deeply believe you can not succeed unique solution to an existing urgent need data asset. As these systems the
without both. However, We believe that the in an addressable market. And we typically companies build accumulate data over
product is the heart of any technology avoid companies that try to change time, they increase the value of the
company. The company gets built around consumer behavior or create a new product and make it more difficult for
the product. consumer need. newer services to deliver an equivalent
experience. Defensibility lies in the data.
13. HARDCORE DESIGN-DRIVEN THESIS
Design
User Research Front-end Stack (toolset)
35-5
0
Research is interwoven into all user the collection of front-end web-standards Founder
male
experience roles – the inspiration and technologies—(X)HTML (of any flavor),
validation of ideas and designs greatly CSS, and JavaScript—as “the web stack”
enhances the chance of success in
meeting your design objectives.
Visual Design Backend Knowledge
Visual design (aka Visual Communication, to back-end technologies. Those things
Information Design is primarily concerned are important, certainly, but not from the
with clearly communicating the aesthetic, front-end point of view. A browser doesn’t
personality and function of a system and care if your page was generated by PHP,
to invoke feeling. Django, Rails, Perl
Information Architecture (IA) Conversion Metrics/ User Flows
IA entails designing an information system Gaining visibility into what’s working and
and the users’ pathways through it. The what’s not in your products. Measure
IA’s goal is to create a system that will what’s happening and help tune your user
provide useful information to suit the experience and help eople understand and
user’s context. create user flows.
UI/UX Story Telling/Copywriting
. User experience highlights the Good writers can effortlessly guide users
experiential, affective, meaningful and through an interface with concise
valuable aspects of human-computer instructional copy.
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
IxD Creative Vision/Business Model
The Interaction Designer is a story-weaver While there are many exciting new
– scripting the narrative between man and entrepreneurial opportunities in fields like
machine – the dialogue of system energy, transportation and clean, there
response to user action
14. EMERGING INTERSECTIONS
CAPITAL
EFFICIENT
DISTRIBUTION
CROWD FUELED
ENTERPRISE
CLOUD
SMART DATA
CONSUMER
INTERNET WEB
MOBILE
EDUCATION
15. INVESTMENT STAGE Mezzanine
Amount of
Money
Series D
Investment
Series C
Investment
Series B
Investment
Series A
Investment
Early-Stage / Super
Seed Investment
Seed/Super Angel/
Micro-VC
Angel / Friends & Investment
Family / Advisory
Founder
Funded
Startup
Stage
Concept / Customer Discovery First Commercial
Proof of Concept / Business Model Fully Operational / Growth Exit: M&A/
Prototype & Validation Success / Marketing /
Product-Market Fit Scale Scale IPO
Distribution
16. GEO AGNOSTIC
Seattle
Vancouver
Silicon Valley
Boston
Southern Cal
New York
Boulder
Austin
Atlanta