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Scaling Venture Capital How we work with VC’s and startups
@MikeReiner
A bit personal: Story about scaling A little history: Cloud and VC’s How we work with VC’s and Startups
A story about scaling Can you scale a country?
Virtual Citizen?
A story about the cloud and VC’s Why do investors care?
“Amazon changed the VC industry. This is mind boggling. That online book company. Not … or anybody else. Amazon. 100% of the credit.”
Mark Suster, serial entrepreneur and MD at GRP Partners
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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
1995 – .com Technology Startups require physical hardware and
proprietary software to build their business
Typical Series A
Spent on…
Innovation
5-10M • $2.5: marketing, sales, etc.
• $2.5M on infrastructure
• Not a lot, since experimentation was costly
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Typical Series A
Spent on…
Innovation
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2000: Rise of Open Source Open source software drove technology costs down by 90%,
which spurred innovation in technology
3-5M • Less on Software– LAMP
• More on development
• Still on infrastructure
• A lot more, as experimentation is less costly now
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Typical Series A
Spent on…
Innovation
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2006: Enter the Cloud Pioneered by Amazon Web Services - drove total
operating costs down significantly
500K-3M
• Staff – the battle for talent
• Customer Acquisition
• Explosion in experimentation, innovation, and Startups
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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2007: Micro VC / Seed Cloud led to explosion in the number of Startups and the
emerging of “micro VCs”
Angels
Incubators
VC’s
Angels unite in ‘Super Angels’ for Seed investments thru VC-like setup
Boom in incubator programs, with
micro investments, mentoring, etc.
Venture funds that back early-stage
startups with <$1M
…rapid pace of innovation
Why do VC’s care? More deals
Shorter time to scale
Faster time to revenue
Lower ‘burn rate’
Higher valuation at exit
Portfolio Package
How we work with VC’s and startups How can we help?
How can our BD team help VC’s 1 - Scale and reduce costs 2 - Deal flow and due diligence 3 - Exits and portfolio review
How can our BD team help startups 1 – Connections to top VC’s EMEA 2 – Get connected within Amazon 3 – Feedback on fundraising and architecture
Not biased: “We win when you win – and only when you win”
Understanding the VC – 3 tips 1 – Approach before you need money 2 – Fundraising takes time 3 – Manage expectations
I saw the angel in the stone and carved until I set him free. Michelangelo
Thank You Reach out and let us help @MikeReiner [email protected]