Marketplace and Quality Assurance Presentation - Vincent Chirchir
The Bunker Presentation
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. 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
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. Faster Bigger Better
Everyone connected all the time. Bandwidth and speed are getting
exponentially faster allowing for more transaction volume.
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. 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
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. 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. 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. .
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. .
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. .
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
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
Today, Crains had an article on lethargic local corporations-they are hierarchies Even commercial building can be unbundled-outsource health club, co-work space, Everyone has a cell phone-it’s more powerful than computers that put men on the moon. Software isn’t just displacing low level jobs, but even high level jobs like anesthesiologists
Today, Crains had an article on lethargic local corporations-they are hierarchies Even commercial building can be unbundled-outsource health club, co-work space, Everyone has a cell phone-it’s more powerful than computers that put men on the moon. Software isn’t just displacing low level jobs, but even high level jobs like anesthesiologists