The Right Now Economy
The document discusses trends in venture capital and the "Right Now Economy". It notes that venture capital is a cyclical industry that is now driving the next upward cycle based on four mega-trends: mobile, social, cloud computing, big data. These trends are transforming traditional industries like shopping, news, advertising, transportation, hospitality, entertainment, education, and healthcare. Hundreds of billions in market value have been transferred to new market entrants. The venture capital industry has resized after an anomalous previous cycle. The next cycle promises to be an era of strong venture returns with $500 billion expected to be returned to venture-funded companies in the next decade. Most value will be created privately, so investors need exposure to venture assets.
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The Right Now Economy
- 1. Venture Right1 Venture Right IBF Conference The Right Now Economy Mark Siegel, Managing Director @msiegel11 June 12, 2013
- 2. Venture Right2 MOBILE SOCIAL CLOUD COMPUTING BIG DATA + + +
- 3. Venture Right3 Prediction Source: Thompson Reuters & NVCA Top Quartile Returns >25% $500B
- 4. Venture Right4 - 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 $Million 5 Year Liquidity Quotient Source: Thompson Reuters & NVCA Liquidity Ratio: 5 years average exit value (IPOs and M&A) divided by 5 years average commitments to venture capital 5 year average commitments 5 year average of exit values Liquidity Ratio Net IRR by Vintage year 120% 100% 80% 60% 40% 20% -20% 0.0%
- 5. Venture Right5 $6T Tech Sector has Grown 25x since 1990 Source: Thompson Reuters & Capital IQ
- 6. Venture Right6 Transforming Traditional Industries THEN NOW SHOPPING
- 7. Venture Right7 THEN NOW NEWS Transforming Traditional Industries
- 8. Venture Right8 THEN NOW ADVERTISING Transforming Traditional Industries
- 9. Venture Right9 THEN NOW TRANSPORTATION Transforming Traditional Industries
- 12. Venture Right12 NOWTHEN EDUCATION Transforming Traditional Industries
- 13. Venture Right13 THEN NOW Transforming Traditional Industries HEALTHCARE
- 14. Venture Right14 Hundreds of Billions of market value transferred to new market entrants Transforming Traditional Industries
- 15. Venture Right15 MOBILE SOCIAL CLOUD COMPUTING BIG DATA + + +
- 16. Venture Right16 Mobile – Connected Everything 1980 2007 2000 1990 2009
- 17. Venture Right17 50 Billion Devices!! 2020
- 18. Venture Right18 MOBILE SOCIAL CLOUD COMPUTING BIG DATA + + +
- 19. Venture Right19 Social is Now Platform for Trust say Facebook has the greatest impact on purchase behavior47% “On the Internet, nobody knows you’re a dog.” of businesses are using Facebook for marketing2/3 Source: Edison Research
- 20. Venture Right20 MOBILE SOCIAL CLOUD COMPUTING BIG DATA + + +
- 21. Venture Right21 Computing on Tap
- 22. Venture Right22 MOBILE SOCIAL CLOUD COMPUTING BIG DATA + + +
- 23. Venture Right23 Worldwide Data Growth Big Data – Access to Everything Cost per Gb Information Created from the Beginning of Civilization until 2003
- 24. Venture Right24 Capturing Value 24 confiden2al Source: Thompson Reuters
- 25. Venture Right25 Summary • VC is a cyclical industry. Previous cycle was anomalous with $100B raised. • Right Now Economy is driving the next upward cycle based on four underlying mega-trends (mobile, social, cloud infrastructure, and big data) • The VC industry has right-sized • The next cycle promises to be a era for venture returns • There will be $500B returned by venture-funded companies in the next decade • Most value will be created in the private market, so investors must be in venture asset class
- 26. Venture Right26 MOBILE SOCIAL CLOUD COMPUTING BIG DATA + + +