4. CONFIDENTIAL
About BlueRun Ventures
โข Over $1.0B under management
โข Investing out of Fund IV ($240M)
โข Focus: Mobile & consumer internet
โข Seed & Series A
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5. CONFIDENTIAL
What is my job?
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โข Unearth great dealsFind
โข Convince NewCo to take our $Close
โข Help NewCo reach full potentialAssist
7. CONFIDENTIAL
Itโs a Golden Age for Entrepreneursโฆ.
Cheaper than ever to start a company.
Better resources
โข Incubators: Y-Combinator, 500Startups, โฆ
โข Resources: Startup Digest, Lean Startup, TC, VB
Technology is easier to learn, access, &c.
โข Codecademy
โข RoR
โข AWS
Driving valuations up
8. CONFIDENTIAL
โฆ And Investors Understand This.
I see lots of great companies that are:
โข Capital efficient
โข High velocity in coding and releasing
โข Product in market with traction
โข Clear customer insight on what works
โข Battle-tested founding teams
โข Clear, concrete ask on what $$$ they need
9. CONFIDENTIAL
Implication
While weโre in a Golden Age for
Entrepreneurs, it is raising the bar
for most very early stage
companiesโฆ
You need to prove more on very
little money, because so many other
start-ups are already doing so.
10. CONFIDENTIAL
Early Stage Valuations
Plain vanilla Series A
โข VC: 20-30%
โข Option pool: 10-20%
โข Founders & Angels keep rest
Items we watch
โข Founder incentive must be very high
โข Maintaining a clean cap table is important
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Founders
& Angels
60%
ESOP
15%
VC
25%
12. CONFIDENTIAL
Exits
Stuff beyond your control
โข The market
โข The corporate politics on the other side
Stuff in your control
โข Which founding teams you back
โข Staying focused on execution until deal is signed
โข Attracting alternative bidders
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14. CONFIDENTIAL
Venture
โข Unique and amazing form of capital
โข Helped scale companies that have had massive impact
โข And will continue to have an important role
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16. CONFIDENTIAL
Our Aspiration
Adapted from Glenn Kelman, CEO Redfin, describing
working w/ Pierre Lamond at his Plumtree.
Then Pierre Lamond, the Sequoia partner on the
deal, began working out of our office, acting as
the virtual CEO. Pierre made a point of being
there the day one of his other companies went
public. We looked at a news photo of all the
smiling people, who seemed to be living in a
gated community, on a planet I would never visit.
Then Pierre said โthat company was once even
more screwed up than you are.โ
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17. CONFIDENTIAL
Recommended actions
Investigate and reference check any investor
โข Past successes
โข Past failures
Assess the friendliness of terms
โข This tells you a lot about alignment w/ founders
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