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The Bunker Presentation

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Slides from presentation to Bunker Labs Kansas City in October 2015

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The Bunker Presentation

  1. 1. Table of Contents 1.Is there a Bubble? 2.Emerging Opportunities 3.What do Angels Look For in A Startup? 4.NDAs-Why they hurt you 5.Counter Intuition 6.Q+A
  2. 2. Jeff Carter Thought leader. Co-Founded Hyde Park Angels in April 2007 (Angel #1), the Midwest’s leading angel group. Helped start other angel groups. Successful. Has made over 19 successful early stage investments, many getting follow on rounds. Highly competitive. Works. Knows how to win. Self employed since 1986. Respected. Elected by peers to CME Board and ran several committees. Strategic Planning and Budget Committee High integrity. Tells you straight, means what he says and follows through. BS University of Illinois and Chicago Booth MBA; Member of the National World War Two Museum Board LinkedIn.com/in/jeffreyrcarter/en blogs every day at PointsAndFigures.com @pointsnfigures on Twitter
  3. 3. Why The Time Is Now
  4. 4. “Startups are transforming our society. Over the past 100 years, we’ve gone from an industrial era to a post information era where the network is rapidly disrupting the hierarchy and transforming the way we work and live.” -Brad Feld, Foundry Group Society is Rapidly Changing
  5. 5. Faster Bigger Better Everyone connected all the time. Bandwidth and speed are getting exponentially faster allowing for more transaction volume.
  6. 6. Speed and Mobile
  7. 7. Sales In Mobile Growing
  8. 8. Slope of curves shows valuation up, But investors assume risk later
  9. 9. Angel/Seed Stage Unchanged Average pre-money valuation is $2.5M
  10. 10. What Kind of Business Should You Build?
  11. 11. Networks not Hierarchies Organizations operate from top down. Software and technology enables them to be flatter, fleeter, and first. Everything Will Be Unbundled Organizations that are generalists will be disintermediated by focused competitors that engage specialized business silos Everyone is a Node on the Network Mobile technology makes everyone a node on the network they operate in. This has deep ramifications for companies and society Software is Eating the World Technological changes are changing the way we produce, interact and transact enabling flatter, customized chains of distribution and peer to peer networks. “What’s different today is that we are seeing on a daily basis revolutionary new ideas, devices, and form factors, not evolutionary enhancements.”-Arvind Sodhani Intel Capital in the WSJ (Jan 1. 2014) The MegaTrends
  12. 12. Government is ill equipped to keep up with rapid change Technological and social change is happening so fast, government bureaucracy is too large and inefficient to keep pace. 63% of the federal budget goes to entitlements today. (Uber, Airbnb) Rise of the Solopreneur Mobile technology makes everyone a node on the network they operate in. This has deep ramifications for the way we work, where we work, when we work, and how we work. It also has implications to how we raise and educate our children. (Food Trucks, Independent Consultants, RIAs) Bitcoin and Mobile Payments new technology is mobile enabled, closes loopholes and strings in internet technology, and provides a searchable, online, transparent accountability function The Minor Trends
  13. 13. Math Sucks
  14. 14. Angel Math Angels need to invest in Gazelles, not Unicorns Gazelles are 30x Invest in a 3M post valuation company, sells for $90M you get 30x. Most angel deals exit at $20M-$60M Unicorns are Billion dollar plus firms. There aren’t many of them, although they are more prevalent
  15. 15. Angel Math Assume $1,000,000 to invest in 10 companies Probability at seed is equal. All companies are Identical and Independently Distributed Goal=27% IRR over 5 years 5=0% return 2-4= Some return 1=30x Hence, Angels look for Gazelles!
  16. 16. Investment Thesis Invest in People first, that use technology to transform existing industries. . Risk Reward for seed stage startup investing beats risk reward for other asset classes in the current financial environment
  17. 17. . Why We Say No Red flag #1 is team. We bet on people first. Red flag #2 is product. We bet on unique solutions to big problems. Red flag #3 is structure. Risk vs reward.
  18. 18. . Why We Say No Red flag #4 is time. Sometimes it’s just too early Red flag #5 is “coachability”. Can we work with this Person over the long haul? Red flag #6 Salesmanship. Can this person sell?
  19. 19. . Why We Say Yes Product is Live Valuation Roadmap Adoption rate is growing, Or Product is sticky. For SaaS 40% Monthly growth/low churn; If Social 30/30/10 Salesmanship. Technical Co-Founder
  20. 20. Non-Disclosure Means No Dough Venture Capitalists and Angels Won’t Sign Them
  21. 21. 1. Dealing with a Lawyer and paperwork is time consuming. Would rather talk to entrepreneur about their business 2. Would have to keep track of all NDAs signed. 3. Value is in execution and creating the thing, not the idea 4. Starts “Trust Relationship” off on the wrong foot. 5. Reputation Cost to the VC if they divulge or act on Information Problems With NDAs for Investors
  22. 22. Startups Are Counter Intuitive They think they know everything and are outfitted with all they need When they launch all hell breaks loose
  23. 23. Startups Look More Like This The best laid plans almost never work out the way they were drawn up
  24. 24. You Won’t Have Everything You Need At Launch Be Flexible. Add as You Go Listen to Your Customers Be Intuitive and ProActive
  25. 25. Don’t Focus on Exit Focus on Building Something Great Focus on Survival Get to the Next Round
  26. 26. Questions And Answers
  • plumtucker

    Oct. 12, 2015

Slides from presentation to Bunker Labs Kansas City in October 2015

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