Venture Outlook 2015 Goldrush or
Fool’s Gold? Mark Suster - @msuster

There are 50x more Internet
users today (33% of world population) Sources: U.S. Bureau of the Census, World Bank. As of Q2 June 2012. 2 World Internet users (M) 1995 2000 2005 2010 2012 2291.2132 2019.2929 1019.086 411.0758 44.3587 1

NOW1995 Online speeds are over
180x faster Source: Akamai ‘s State of the Internet Q1 2014 3 56 Kbps modems 10.5 Mbps average U.S. Internet connection speed! 2

People are mobile: connected everywhere,
all the time Source: 2014 Statista forecasts 4 • Personal • Location aware • At point of purchase 2014 US smartphone users 164m 2014 US tablet users 119m 3

Everybody is socially connected driving
viral growth at faster rates 5 Monthly active users255M Monthly active users1.3B+ Global registered members300M+ Hours of video watched each month by 1B+ users6B+ 4

We all have credit cards
on file with a single click to purchase Sources: eMarketer, WSJ 6 Global ecommerce spend $1.5 trillion1 billion Digital shoppers worldwide The Apple app ecosystem alone estimated to be $35 billion in 2014 (from $0 in 2008) 5

Industry right sized to pre
dot-com levels Source: Prequin. Includes all LP investment into US VC funds with IT & Digital Media focus. Excludes funds with hardware & nanotech focus, non-$USD funds, funds with undisclosed amounts, & funds without first close 7 Commitments from LPs to U.S. Tech VC funds ($B) 1995 2000 2005 2010 2012 15.772 9.306 15.846 50.401 3.09 No. of funds raised by U.S. Tech VC firms 1995 2000 2005 2010 2012 65 50 74 163 33 6

Think about it … 8
50x users, 180x bandwidth, 6x time spent online Mobile, social, credit-card ready Global economic pressure Companies that work are growing faster than in human history=

Market Capitalization at IPO ($B)
Cisco Amazon Microsoft LinkedIn Twitter FB Alibaba (est) 2525 $18 4.25 0.7780.4410.224 Private investors capture more value, encouraging greater pre-IPO funding. Source: Quigley Report 2011, FLAG Capital 9 Previous Tech Cycle New Tech Cycle $125B+ Current market cap: $150B+ $340B+

Companies are raising larger amounts
of private capital before going public Source: Dow Jones Venture Source 2014 via EY 10 Median amount raised prior to IPO ($M) 2008 2009 2010 2011 2012 2013 100.9 78.4 82.8 72.1 42.5 48.6

Public company startups are significantly
more mature than their 1.0 counterparts. Source: Age from NVCA 2014 Yearbook – Thomson Retuers, Revenue & Multiples from Pitchbook Tech Valuations Presentation (June 2014) 11 Years to IPO (from 1st financing) IPO in '00 IPO in '13 7.4 3.1 Revenue ($M) IPO in '00-01 IPO in '13-'14 101.6 34.8 Valuation/Revenue Multiple IPO in '00-01 IPO in '13-'14 5.3 13.3

• Hedge funds • Mutual
funds So late-stage private financing now facing unprecedented competition Source: CB Insights 12 Traditional public investors • Growth funds • Opportunity funds Traditional VC investors Moving Later Moving Earlier • Google • Rakuten • Alibaba Corporate VC Entrants New

Thus valuations at later stage
have gone up the fastest Source: Source; Q2 2014 PitchBook US Venture Industry Data Sheet, * As of Q1 2014 13 $ 1 $ 10 $ 100 $ 1,000 5.88 11.28 28.1 62.34 155 3.15 6.65 19.9 37.07 66.05 Seed Series A Series B Series C Series D+ 24% 14% 9% 14% 17% Median Pre-Money Valuation ($M) 2010 to 2014 CAGR 2014* 2010

But this is not 2000.
14 This is fueling some discussion of a bubble. Both trends are real. The startup value & growth unprecedented thus new entrants forward paying prices for late-stage deals.

So what will the future
hold? What to expect as an angel, a founder, a VC? 15 Topic discussion: 1. Crowd-funding (Equity vs. Product Pre-Sale) 2. Angels 3. Venture Capital 4. Founders

Venture Outlook 2015 Mark Suster
- @msuster