The document discusses different types of startup growth profiles, including unprofitable hypergrowth, profitable hypergrowth, linear growth, and profitable decline. It notes that while many failing startups are consuming large amounts of capital, startups create value when they scale intelligently and destroy value when they consume capital too rapidly relative to their growth. The document advocates for a "truth-seeking" phase where startups focus on unlocking product value before rapidly accumulating customers, and determining the correct growth profile involves balancing ambition with acceptance of realistic growth potential.

1. 1FLOODGATE |Proprietary & Confidential
Redefining Intelligent Growth
Ann Miura-Ko, Floodgate
PreMoney SF Conference
December 5, 2017

2. 2FLOODGATE |Proprietary & Confidential
We’ve always known that becoming a great startup is a difficult endeavor
Source: CB Insights

3. 3FLOODGATE |Proprietary & Confidential
CAPITAL RAISED PEAK VALUATION
MOST-FUNDED STARTUPS TO FAIL IN 2017
$950M $1.5B (Jan ‘16)
$135M $600M (March ‘15)
$149M $564M (Aug ‘15)
$121M $459M (March ‘16)
$75M $400M (Nov ‘14)
$75M $160 (March ‘16)
$59M $169M (Apr ‘15)
Yet, many failing startups are consuming more capital than ever before
Source: TechCrunch

4. 4FLOODGATE |Proprietary & Confidential
Unprofitable Hypergrowth
Become not just the fast-growing
first-mover, but the massively
scaled last-mover, without any
regard to cost.
We’ve recently been accustomed to one particular type of growth
Ann Miura-Ko, @annimaniac

5. 5FLOODGATE |Proprietary & Confidential
A high loss rate for VC is obvious, but
should these startups be consuming this
much capital?
Ann Miura-Ko, @annimaniac

6. 6FLOODGATE |Proprietary & Confidential
Startups CREATE VALUE for customers and shareholders
when they become real businesses that scale intelligently.
Startups DESTROY VALUE when they consume capital too
rapidly relative to their growth and subsequently become worth
less than their preference stacks.
Ann Miura-Ko, @annimaniac

7. 7FLOODGATE |Proprietary & Confidential
What have we learned that can help
founders avoid growth that destroys value?
Ann Miura-Ko, @annimaniac

8. 8FLOODGATE |Proprietary & Confidential
VALUE-SEEKING GROWTH-SEEKING
Unlock a new product value
proposition with the potential
to delight a large number of
attractive customers.
Accumulate attractive
customers with increasing
speed and predictability.
To be great, we need to HACK VALUE before we can HACK GROWTH
TRUTH-SEEKING
Ann Miura-Ko, @annimaniac

9. 9FLOODGATE |Proprietary & Confidential
Case Study:
Aug 2010
Expansion to
focus on
corporations
Sep 2011
$1.2M
Series Seed
$6M
Series A
Expansion to
focus on large
universities
Expansion to
focus on
long-distance
routes
Aug 2012
LAUNCHES
What does this truth-seeking phase look like in reality?
Ann Miura-Ko, @annimaniac

10. 10FLOODGATE |Proprietary & Confidential
There are many profiles of growth
Unprofitable
Hypergrowth
Lyft, Airbnb
Profitable
Hypergrowth
Microsoft,
Veeva Systems
Linear Growth Main street
businesses
Profitable Decline As a category begins to decline, seek to maximize
possible profits in the twilight years of the category
Magazine
subscriptions
Non-scaleable growth where the value you get out of it
is correlated with the money you put in
Become not just the fast-growing first-mover, but the
massively scaled last-mover
Focus on “profit first” and growing profits in a maturing
market you dominate
VENTURE-BACKABLE
Ann Miura-Ko, @annimaniac

11. 11FLOODGATE |Proprietary & Confidential
And there’s one more Value Profile...
Ann Miura-Ko, @annimaniac

12. 12FLOODGATE |Proprietary & Confidential
The DENIAL Profile.
Ann Miura-Ko, @annimaniac

13. 13FLOODGATE |Proprietary & Confidential
Determining the correct Value Profile is a combination of
AMBITION & ACCEPTANCE
A company should try to accelerate its value creation at the greatest possible rate.
But “possible” is the key word. The ambition to grow rapidly needs to be reconciled
with the most realistic growth strategy for optimal value creation.
This massive democratization of entrepreneurship should allow us, as VCs
and LPs, to be more creative as to how we make returns.
Ann Miura-Ko, @annimaniac

14. 14FLOODGATE |Proprietary & Confidential
Thank You