2. 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
3. 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
4. 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
5. 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
6. 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 $0 in 2008)
5
7. Industry right sized to pre dot-com levels
Source: Prequin. Includes all LP investment into US VC funds with IT & Digital Media focus. Excludes funds with hardware & nanotech focus, non-$USD funds, funds with undisclosed amounts, & funds without first
close
7
Commitments from LPs to U.S. Tech
VC funds ($B)
1995 2000 2005 2010 2012
15.772
9.306
15.846
50.401
3.09
No. of funds raised by U.S. Tech VC firms
1995 2000 2005 2010 2012
65
50
74
163
33
6
8. Think about it …
8
50x users, 180x bandwidth, 6x time
spent online
Mobile, social, credit-card ready
Global economic pressure
Companies that work are growing faster than
in human history=
9. Market Capitalization at IPO ($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+ $340B+
10. Companies are raising larger amounts of private capital before going public
Source: Dow Jones Venture Source 2014 via EY
10
Median amount raised prior to IPO ($M)
2008 2009 2010 2011 2012 2013
100.9
78.4
82.8
72.1
42.5
48.6
11. 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
12. • 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
13. 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
14. 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.
15. 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