Aydin Senkut Founder, Felicis Ventures

1. Unique Insights on Venture & Picking Companies
JUNE12,2015
Aydin Senkut | @asenkut @felicisventures

2. Aydin Senkut | @asenkut @felicisventures1
Our Evolution & Track Record
Aggregate Exit Value Up 3x, Exit Count Up ~2x with Every New Felicis Fund

3. Aydin Senkut | @asenkut @felicisventures2
Venture Adages Are Meant To Be Broken
DEFINE YOUR “SANDBOX” (E.G. FINTECH FOCUS, SEED FUND, ENTERPRISE FUND)
STRICT OWNERSHIP TARGETS & BOARD SEATS
SILICON VALLEY IS THE ONLY FERTILE GROUND

4. Aydin Senkut | @asenkut @felicisventures3
Our Founders Hail from a Vast Range of Countries & Backgrounds

5. Aydin Senkut | @asenkut @felicisventures
So Does Our Team: We Have Strong Immigrant / International DNA
4
DIVERSITY IS A POINT OF STRENGTH FOR US, NOT AN AFTERTHOUGHT

6. Aydin Senkut | @asenkut @felicisventures5
Our Model Is Not One-Size-Fits-All

7. Aydin Senkut | @asenkut @felicisventures6
We Try to Pick Sectors Before Inflection Point / Mass VC Interest

8. Aydin Senkut | @asenkut @felicisventures7
Our Sectoral Shifts Coincide with Major Changes in Markets
CURRENTLY FOCUSING MORE ON ENTERPRISE, FINTECH AND HEALTH
o Fintech & Health[care] rising within Nasdaq to 7% & 17% (up from 4% & 7%) + both sectors are non-cyclical
o Enterprise exits significantly up in last 3 years (M&A up 3x, IPO up 2x)
Top 50 VC-Backed Exits By Year, Consumer vs. Enterprise
Technology
Consumer Services
Healthcare
Financials
Industrials
Other
Nasdaq by Industry
Source: WSJ, April 23, 2015 Source: CB Insights, April 2015

9. Aydin Senkut | @asenkut @felicisventures8
We Adapt Our Strategy to Perceived Market Shifts
FV I FV II FV III FV IV
Vintage 2006 2010 2012 2014
Pre Revenue Mix Pre-revenue (49%) Pre-revenue (49%) Pre-revenue (30%) Pre-revenue (34%)
Top Sectors Consumer Internet
Mobile
E-Commerce
Enterprise
Fintech
Enterprise
Health

10. Aydin Senkut | @asenkut @felicisventures9
We Look For Global Winners, Not Local Heroes

11. Aydin Senkut | @asenkut @felicisventures10
International Founders Capture Arbitrage Opportunities
INTERNATIONAL INVESTMENTS REPRESENT ROUGHLY 20% OF OUR FAIR MARKET VALUE
FIRST BIG FELICIS IPO IS CANADIAN
SIGNIFICANT LABOR COST DIFFERENCE DUE TO GOVERNMENT INCENTIVES IN COUNTRIES LIKE CANADA:
Source: AngelList

12. Aydin Senkut | @asenkut @felicisventures11
Picking Winners is Hard, Especially When Valuations Change Drastically
Min – Max Range
Convertible Note 2.5x
Seed 6x
Series A 10x
Average Entry Valuation Range Across Early Stages, 2006-2015

13. Aydin Senkut | @asenkut @felicisventures12
We Focus on Revenues, Less On Valuations
TO COMBAT HIGHER VALUATIONS COMPRESSING MULTIPLES, OPT FOR BETTER REVENUE GROWTH POTENTIAL
• 2010: 6 companies* with ~$10M+ annual revenues
• 2015: 9 companies* with ~$100M+ annual revenues; all 6 from 2010 have exited
* Across ALL Felicis Funds

14. Aydin Senkut | @asenkut @felicisventures
We Look For Great Companies Everywhere
13
MORE THAN HALF (52%) OF OUR PORTFOLIO VALUE COMES FROM (18%) DEALS SOURCED OUTBOUND

15. Aydin Senkut | @asenkut @felicisventures14
Remain Flexible & Adaptable
ORIGINALLY PLANNED TO INVEST ONLY IN SOFTWARE COMPANIES,
BUT BREAKING THAT RULE PRODUCED SOME OF OUR BIGGEST HITS:

16. Highlights from Portfolio Companies Valued at $100M+

17. Aydin Senkut | @asenkut @felicisventures16
Enterprise Leads, Though All Sectors Produced Winners
$100M+ $1B+
Connected Devices 3 1
Fintech 2 3
Mobile 2 -
E-Commerce 2 3
Health 2 -
Consumer Internet 6 1
Enterprise 11 1
Education 1 -
3D 1
Distribution of FV Winners by Sector & Valuation

18. Aydin Senkut | @asenkut @felicisventures17
Seed Stage Investments Still Represent Roughly Half Our Winners
$100M+ $1B+
Seed 19 4
Early 6 4
Growth 5 1
Distribution of FV Winners by Stage & Valuation

19. Aydin Senkut | @asenkut @felicisventures18
SF Bay Area Dominant Among Winners, but has NO Monopoly on Talent
$100M+ $1B+
SF Bay Area 23 6
Rest of US 5 1
International 1 2
Distribution of FV Winners by HQ Location & Valuation

20. Aydin Senkut | @asenkut @felicisventures19
Our Winners Skew Towards 1st Time Founders
$100M+ $1B+
First Time 22 6
Repeat 8 3
Distribution of FV Winners by Founder Experience Level & Valuation

21. Aydin Senkut | @asenkut @felicisventures20
Complete Teams Execute & Hire Better
$100M+ $1B+
1 7 -
2 14 5
3 6 2
4 3 2
Distribution of FV Winners by Number of Founders & Valuation

22. Aydin Senkut | @asenkut @felicisventures21
Average Founder Age at Start 30, Youngest 21
$100M+ $1B+
Average 30 28
Youngest 21 22
Oldest 40 37
Distribution of FV Winners by Founder Age at Start & Valuation

23. Aydin Senkut | @asenkut @felicisventures22
Building Winners Still Takes Time (Though It’s Accelerating)
$100M+ $1B+
Earliest Start 2003 2005
Most Recent Start 2013 2010
Among $1B+ Unicorns:
Shopify IPO took 10 years from founding, ~5 years from 1st institutional round
Wish took 5 years from founding to reach $1B+ valuation, 5 years from seed round
Distribution of FV Winners by Year Founded & Valuation

24. Aydin Senkut | @asenkut @felicisventures23
What We Learned from Our Iconic Companies
FOUNDERS THAT CAN SUCCINCTLY ARTICULATE THEIR SUCCESS MUCH MORE LIKELY TO SUCCEED
• Founders that can visualize (& articulate) success more likely to achieve it
• Iconic Founders have a unique insight into what makes their products really awesome
• Iconic Companies create their own Playbook
• Iconic Companies execute in short bursts, test hypotheses with real data, fast