SlideShare a Scribd company logo
1 of 41
Download to read offline
!1
Mark Suster
@msuster
Chang Xu
@_changxu
Is VC Still
A Thing?
Image Credit:
Freepik
!2
Last year, the
discussion was
how ICOs were
going to wipe
out VC.
Image Credit: Pexels
3
And we know
some founders
eschew venture
capital.
Image Credit: Pexels
4
Some fear that
SoftBank, Sequoia
and sovereign
wealth funds may
eat VCs alive.
Image Credit: Pexels
Let’s take a
closer look at
what’s actually
happening.
!5 Image Credit: Pexels
6
We all know that startup
funding is up massively…
…and VC funds are raising
significantly more capital.
2006 2008 2010 2012 2014 2016 2018
$131B
$83B
$29B
2006 2008 2010 2012 2014 2016 2018
$55B
$34B
$34B
Source: Pitchbook NVCA Venture Monitor 4Q’18
Some LPs express
concerns about valuation
creep or too much capital.
!7
But let’s peel back the
onion to see what’s
really happening.
8 Image Credit: Freepik
9
The number of Pre-Seed deals (<$1M) backed by VCs skyrocketed (600%) but
has cooled off by 1/3rd over the past three years.
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
US VC Number of Deals under $1M
3,374
488
3,543
2,144
Source: Pitchbook NVCA Venture Monitor 4Q’18
>600%
Cooled off
by >1/3
10
The exact same phenomenon happened in the Seed market ($1-5M).
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
US VC Number of $1-5M Deals
3,315
1,036
3,104
2,699
Source: Pitchbook NVCA Venture Monitor 4Q’18
>300%
Down ~20%
11
And the number of Micro Funds raised has followed in lock step.
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
# Funds and Capital Raised ($) for <$100M Funds
181
83
181
129
Source: Pitchbook NVCA Venture Monitor 4Q’18
2.2x
Down 30%
What is going on
at the seed stage?
!12 Image Credit: Pexels
13
For one thing, traditional Series A venture capital hasn’t meaningfully increased
investment pace over the past decade.
US VC Number of $5-10M Deals
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
1,118
687
Source: Pitchbook NVCA Venture Monitor 4Q’18
4%
CAGR
14
Series B deal volume also has been fairly constant over the past decade.
US VC Number of $10-25M Deals
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
1,103
643
Source: Pitchbook NVCA Venture Monitor 4Q’18
5%
CAGR
15
As a result, we see a rise in the “Seed Extension” deals feeding into the Series A
pipeline and companies staying in seed phase for longer.
Source: Cendana Capital portfolio company data (with permission)
Time to Series A
Pre-2012 2012 2013 2014 2015 2016 2017 2018
0.9
1.2
0.8
1.1
1.2 1.2
1.4
1.6
Number of Seed Extension Rounds
Pre-2012 2012 2013 2014 2015 2016 2017 2018
69
45
52
39
28
1189
Median years from Series Seed to A
16
The Series A and B part of the market is very similar to how it was 15 years ago—
except with a 3x bigger top end of the funnel.
Series A
funds
Series A
funds
THEN NOW
Angel / Seed
Angel / pre-seed
Seed funds
Source: Upfront analysis
Series B
funds
Series B
funds
Bottom end of the funnel haven’t changed much
Top end of
the funnel is
now 3x larger
17
While it’s true that there has been valuation creep for Series A and B…
US VC Median Pre-Money Valuation ($M) by Year
$0M
$15M
$30M
$45M
$60M
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*
Series A
Series B
Source: Pitchbook NVCA Venture Monitor 4Q’18
18
…part of fund size increases has been about maintaining ownership levels.
US VC Series A Round Median Ownership
0%
10%
20%
30%
40%
1990s 2014 2015 2016 2017 2018
25% 25% 26%
28%
29%
Methodology: For 2014-2018, divided Median Deal Size by Median Post-Money Valuation for Series A deals
Source: Pitchbook data for 2014-2018, Upfront analysis
35%+
!19
For the best VC funds,
the upside case has
never been bigger.
Let’s zoom out and
I’ll explain.
Image Credit: Pexels
20
We all know that capital going to startups has increased significantly in the past
five years (by 300%).
US VC Capital Invested by Deal Size ($B)
2013 2014 2015 2016 2017 2018
$131B
$83B$77B$83B
$71B
$48B
Source: Pitchbook NVCA Venture Monitor 4Q’18
21
Most of this capital increase, though, falls into three buckets that can be called
“mega-rounds.”
Source: Pitchbook NVCA Venture Monitor 4Q’18, Upfront analysis
$20B
Total
$40B
Total
$21B
Total
$61B in deals
over $100M
$81B in deals
over $50M$50-
100M
$100M
-1B
$1B+
US VC Capital Invested by Deal Size in 2018 ($B)
22
What really happened is that the IPO window was pushed out 5+ years
for the best companies and the dollars have shifted from public to private.
Old IPO
6-8 years
New IPO
10-12 years
$50M
$2B++
$RaisedPriortoIPO
23 Source: Pitchbook
3
$7M
$23M
$9M
$60M
5 6
$35M
$100M
$65M
$355M
VC $ Raised
Prior to IPO
Last Private
Market Valuation
Number of
Years Private
In the past, the best companies IPO’d in 6-7 years from inception. As a result the
value captured was all in the public markets.
Companies Founded Before 2000
24
119 10
$1.7B
$10B
$4.9B
$15B
$4.4B
$31B
$19.9B
$72B
12
$1.2B
$7B
$370M
$1.5B
Note: Due to limited data set, included high-profile tech companies that are expected to IPO in 2019 (Uber, Lyft, Airbnb, Slack)
Source: Pitchbook
VC $ Raised
Prior to IPO
Last Private
Market Valuation
Number of
Years Private
But now the goalposts have moved and the best companies are staying private twice as
long. This is a massive opportunity for venture firms that have ownership and pro rata rights.
Companies Founded Since 2006
25 Source: Yahoo Finance
If Amazon, Google and Salesforce had each stayed private for 12 years, an
additional $197 billion in value creation could have occurred pre-IPO.
$0B
$207.5B
$415B
$622.5B
$830B
-2
-1
+1
+2
+3
+4
+5
+6
+7
+8
+9
+10
+11
+12
+13
+14
+15
+16
+17
+18
+19
+20
$0B
$207.5B
$415B
$622.5B
$830B
-5
-4
-3
-2
-1
+1
+2
+3
+4
+5
+6
+7
+8
+9
+10
+11
+12
+13
$0B
$207.5B
$415B
$622.5B
$830B
-4
-3
-2
-1
+1
+2
+3
+4
+5
+6
+7
+8
+9
+10
+11
+12
+13
$708B
$102B
$829B
Year 12
$18B
Year 12
$162B
Year 12
$17B
FOUNDED IPO
IPOFOUNDED
FOUNDED IPO
1999
2004
2004
1998
1994
1997
2018
2018
2018
Market Cap Appreciation – IPO to 12 Years Post-Inception
26
Here is the “private IPO” phenomenon in numbers.
Source: Pitchbook NVCA Venture Monitor 4Q’18
0
50
100
150
200
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
IPOs
Mega-rounds
($100M+ financings)
Total Mega-Round Count
198
104
79
109
125
85
58
43
79
82
27
54 new companies raised at more than $1 billion valuation.
Number of Unicorn Births
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
3 4 4
9
11 12
42 43
22
34
54
Source: Pitchbook Unicorn Report 2018, Pitchbook analysis
28
Just five years ago, $100M+ rounds accounted for just 13% of financings as
opposed to 47% in 2018. Traditional Venture Capital has only grown 14% per year.
Source: Pitchbook NVCA Venture Monitor 4Q’18
US VC Capital Invested by Deal Size ($B)
2013 2014 2015 2016 2017 2018
70
41
$48B
$131B
GROWTH
Mega-rounds
≥$100M
6
61
VENTURE
<$100M rounds
14%
CAGR
60%
CAGR
29
The private IPO trend seems to have gathered steam in 2014.
2008 2009 2010 2011 2012 2013
20
14
25
46
28
36
2014 2015 2016 2017 2018
82
109
79
104
198
Source: Pitchbook NVCA Venture Monitor 4Q’18
US Mega-Round ($100M+) Financings by Year
30
So in reality it seems the private capital market is now three fairly distinct
categories.
Venture Capital
Scale or Bust Private IPOs
Growth Capital
The Start
Seed Capital
20% of deals drive
80% of returns
31
So while time-to-liquidity for VCs has been pushed out, the best VCs (and LPs) are compensated by
capturing more of the upside. Pro rata rights have become much more valuable in the best deals.
Series A 20%
Seed 10%
Which is why many
stage funds have set up
companion funds
to defend their
ownership through exit
Growth Funds
Opportunity Funds
SPVs
Target
Ownership
@ Exit
Structural Changes to Defend Ownership Through Exit
So no, Venture Capital is
not dead. Here are some
thoughts on why the
next decade should see
even more upside.
!32 Image Credit: Freepik
Global Internet Users (Millions)
1999 2013 2018
4,200
2,800
250
33
In 1999, the US VC industry raised $53 billion for a nascent Internet population. 20
years later, we have 77% of US and 56% of the world online with $55 billion raised.
Source: World Bank; Internet World Stats; Pitchbook; Industry Ventures
US Internet Users (Millions)
1999 2013 2018
250
230
100
34
Connection speeds in 2018 is a whopping 400 times faster than that in 1999.
Source: Akamai’s State of the Internet, Statista
1999 2014
United States
(Avg Speed, Mbps)
2017
50
Kbps
11.1 18.7
Dial Up
35
Nearly everybody now has a computer in their pocket.
Source: Newzoo, GSMA
Global 27%
56%United States
66%
72%
1999 2013 2017
N/A
N/A
Smartphone Penetration
36
Because we’re all connected—when concepts work, they scale much faster and
become much more dominant than at any point in human history.
Source: Upfront analysis
Monthly Active Users (Millions)
0
500
1,000
1,500
2,000
2,500
1999 2013 2018
2,271
1,189
0
1,057
2360 3262180
1,000
1300 186330
Not in existence 130
33 186
37
And with everybody’s credit cards or banks now connected to tech platforms,
we’ve eliminated most purchase friction. We’re one tap away from buying online.
*Amazon user data is estimated as straight line from IPO (1997) to 2018 reported values
Source: Upfront Analysis, PayPal, Loup Ventures, BigCommerce
Total Active Users (Millions)
175
350
525
700
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
*
Most industry analysts haven't even begun to comprehend what an enormous shift 5G
speeds will bring. We anticipate enormous creative destruction and company creation.
!38
Note: Represented AT&T’s average 3G and 4G download speed. 5G networks have the potential to be significantly faster but data is only available from simulated environments
Source: RootMetrics, Wikipedia, Upfront analysis
3G
4G
5G
2G
<1
Mbps
4
Mbps
25
Mbps ?
!39
What does this all mean?
Image Credit: Pexels
!40
Traditional Seed & VC more valuable than ever.

Value has shifted from publics to privates but
skills in VC vs. Growth remain distinct.

We are all now broadband, mobile, social &
1-click to buy.
The pace of technology & networks will continue
to create enormous new opportunities.
Image Credit: Pexels
!41
Mark Suster
@msuster
Chang Xu
@_changxu
So yeah,
VC Is Still
A Thing
Image Credit:
Freepik

More Related Content

What's hot

235629204 snapchat-business-deck
235629204 snapchat-business-deck235629204 snapchat-business-deck
235629204 snapchat-business-deckYan Rozovsky
 
Mattermark 2nd (Final) Series A Deck
Mattermark 2nd (Final) Series A DeckMattermark 2nd (Final) Series A Deck
Mattermark 2nd (Final) Series A DeckDanielle Morrill
 
Twilio's $120M Series B pitch deck
Twilio's $120M Series B pitch deckTwilio's $120M Series B pitch deck
Twilio's $120M Series B pitch deckPitch Decks
 
AI and Machine Learning Demystified by Carol Smith at Midwest UX 2017
AI and Machine Learning Demystified by Carol Smith at Midwest UX 2017AI and Machine Learning Demystified by Carol Smith at Midwest UX 2017
AI and Machine Learning Demystified by Carol Smith at Midwest UX 2017Carol Smith
 
Square pitch deck
Square pitch deckSquare pitch deck
Square pitch deckpitchenvy
 
Intercom's first pitch deck!
Intercom's first pitch deck!Intercom's first pitch deck!
Intercom's first pitch deck!Eoghan McCabe
 
Mint.com Pre-Launch Pitch Deck
Mint.com Pre-Launch Pitch DeckMint.com Pre-Launch Pitch Deck
Mint.com Pre-Launch Pitch DeckHiten Shah
 
From Mice to Whales – 5 Ways to Build a $100 Million SaaS Business
From Mice to Whales – 5 Ways to Build a $100 Million SaaS BusinessFrom Mice to Whales – 5 Ways to Build a $100 Million SaaS Business
From Mice to Whales – 5 Ways to Build a $100 Million SaaS BusinessChristoph Janz
 
Social Media Marketing Trends 2023 // The Global Indie Insights
Social Media Marketing Trends 2023 // The Global Indie InsightsSocial Media Marketing Trends 2023 // The Global Indie Insights
Social Media Marketing Trends 2023 // The Global Indie InsightsKurio // The Social Media Age(ncy)
 
Yuga Labs Pitch Deck: BAYC founders raised $450M from Andreesen Horowitz
Yuga Labs Pitch Deck: BAYC founders raised $450M from Andreesen HorowitzYuga Labs Pitch Deck: BAYC founders raised $450M from Andreesen Horowitz
Yuga Labs Pitch Deck: BAYC founders raised $450M from Andreesen HorowitzPitch Decks
 
BCG sequoia mobile gaming report
BCG sequoia mobile gaming reportBCG sequoia mobile gaming report
BCG sequoia mobile gaming reportSocial Samosa
 
Q4 2022 DBX Investor Presentation.pdf
Q4 2022 DBX Investor Presentation.pdfQ4 2022 DBX Investor Presentation.pdf
Q4 2022 DBX Investor Presentation.pdfDropbox
 
The 10 most interesting slides that helped our SaaS company raise 9 million
The 10 most interesting slides that helped our SaaS company raise 9 millionThe 10 most interesting slides that helped our SaaS company raise 9 million
The 10 most interesting slides that helped our SaaS company raise 9 millionGoCanvas
 
Pitch Deck Teardown: Juro 's $23 million Series B deck
Pitch Deck Teardown: Juro 's $23 million Series B deckPitch Deck Teardown: Juro 's $23 million Series B deck
Pitch Deck Teardown: Juro 's $23 million Series B deckHajeJanKamps
 
Understanding Reddit: The Social Media Superpower You've Probably Never Heard Of
Understanding Reddit: The Social Media Superpower You've Probably Never Heard OfUnderstanding Reddit: The Social Media Superpower You've Probably Never Heard Of
Understanding Reddit: The Social Media Superpower You've Probably Never Heard OfBrent Csutoras
 
A guide to product metrics by Mixpanel
A guide to product metrics by MixpanelA guide to product metrics by Mixpanel
A guide to product metrics by MixpanelHarsha MV
 
WTF - Why the Future Is Up to Us - pptx version
WTF - Why the Future Is Up to Us - pptx versionWTF - Why the Future Is Up to Us - pptx version
WTF - Why the Future Is Up to Us - pptx versionTim O'Reilly
 

What's hot (20)

235629204 snapchat-business-deck
235629204 snapchat-business-deck235629204 snapchat-business-deck
235629204 snapchat-business-deck
 
Mattermark 2nd (Final) Series A Deck
Mattermark 2nd (Final) Series A DeckMattermark 2nd (Final) Series A Deck
Mattermark 2nd (Final) Series A Deck
 
Front series A deck
Front series A deckFront series A deck
Front series A deck
 
BuzzFeed Pitch Deck
BuzzFeed Pitch DeckBuzzFeed Pitch Deck
BuzzFeed Pitch Deck
 
Twilio's $120M Series B pitch deck
Twilio's $120M Series B pitch deckTwilio's $120M Series B pitch deck
Twilio's $120M Series B pitch deck
 
AI and Machine Learning Demystified by Carol Smith at Midwest UX 2017
AI and Machine Learning Demystified by Carol Smith at Midwest UX 2017AI and Machine Learning Demystified by Carol Smith at Midwest UX 2017
AI and Machine Learning Demystified by Carol Smith at Midwest UX 2017
 
Square pitch deck
Square pitch deckSquare pitch deck
Square pitch deck
 
Intercom's first pitch deck!
Intercom's first pitch deck!Intercom's first pitch deck!
Intercom's first pitch deck!
 
Mint.com Pre-Launch Pitch Deck
Mint.com Pre-Launch Pitch DeckMint.com Pre-Launch Pitch Deck
Mint.com Pre-Launch Pitch Deck
 
From Mice to Whales – 5 Ways to Build a $100 Million SaaS Business
From Mice to Whales – 5 Ways to Build a $100 Million SaaS BusinessFrom Mice to Whales – 5 Ways to Build a $100 Million SaaS Business
From Mice to Whales – 5 Ways to Build a $100 Million SaaS Business
 
Social Media Marketing Trends 2023 // The Global Indie Insights
Social Media Marketing Trends 2023 // The Global Indie InsightsSocial Media Marketing Trends 2023 // The Global Indie Insights
Social Media Marketing Trends 2023 // The Global Indie Insights
 
The Hierarchy of Engagement
The Hierarchy of EngagementThe Hierarchy of Engagement
The Hierarchy of Engagement
 
Yuga Labs Pitch Deck: BAYC founders raised $450M from Andreesen Horowitz
Yuga Labs Pitch Deck: BAYC founders raised $450M from Andreesen HorowitzYuga Labs Pitch Deck: BAYC founders raised $450M from Andreesen Horowitz
Yuga Labs Pitch Deck: BAYC founders raised $450M from Andreesen Horowitz
 
BCG sequoia mobile gaming report
BCG sequoia mobile gaming reportBCG sequoia mobile gaming report
BCG sequoia mobile gaming report
 
Q4 2022 DBX Investor Presentation.pdf
Q4 2022 DBX Investor Presentation.pdfQ4 2022 DBX Investor Presentation.pdf
Q4 2022 DBX Investor Presentation.pdf
 
The 10 most interesting slides that helped our SaaS company raise 9 million
The 10 most interesting slides that helped our SaaS company raise 9 millionThe 10 most interesting slides that helped our SaaS company raise 9 million
The 10 most interesting slides that helped our SaaS company raise 9 million
 
Pitch Deck Teardown: Juro 's $23 million Series B deck
Pitch Deck Teardown: Juro 's $23 million Series B deckPitch Deck Teardown: Juro 's $23 million Series B deck
Pitch Deck Teardown: Juro 's $23 million Series B deck
 
Understanding Reddit: The Social Media Superpower You've Probably Never Heard Of
Understanding Reddit: The Social Media Superpower You've Probably Never Heard OfUnderstanding Reddit: The Social Media Superpower You've Probably Never Heard Of
Understanding Reddit: The Social Media Superpower You've Probably Never Heard Of
 
A guide to product metrics by Mixpanel
A guide to product metrics by MixpanelA guide to product metrics by Mixpanel
A guide to product metrics by Mixpanel
 
WTF - Why the Future Is Up to Us - pptx version
WTF - Why the Future Is Up to Us - pptx versionWTF - Why the Future Is Up to Us - pptx version
WTF - Why the Future Is Up to Us - pptx version
 

Similar to Is vc still a thing final

Isvcstillathing final-190204194013
Isvcstillathing final-190204194013Isvcstillathing final-190204194013
Isvcstillathing final-190204194013DANIEL BAPTISTA
 
Seed stage 2019 final
Seed stage 2019   finalSeed stage 2019   final
Seed stage 2019 finalMark Suster
 
State of Venture, Technology
State of Venture, Technology State of Venture, Technology
State of Venture, Technology F-Prime Capital
 
LUMA's State of Digital Marketing at DMS West 17
LUMA's State of Digital Marketing at DMS West 17LUMA's State of Digital Marketing at DMS West 17
LUMA's State of Digital Marketing at DMS West 17LUMA Partners
 
2O19 Fintech Trends To Watch
2O19 Fintech Trends To Watch 2O19 Fintech Trends To Watch
2O19 Fintech Trends To Watch Peerasak C.
 
2019 Fintech Trends To Watch by CBInsights
2019 Fintech Trends To Watch by CBInsights2019 Fintech Trends To Watch by CBInsights
2019 Fintech Trends To Watch by CBInsightsRoman Pravorskyi
 
The Changing Structure of the Venture Capital Industry
The Changing Structure of the Venture Capital IndustryThe Changing Structure of the Venture Capital Industry
The Changing Structure of the Venture Capital IndustryMark Suster
 
PreMoney SF 2017: State of the Venture Capital Industry by Mark Suster
PreMoney SF 2017: State of the Venture Capital Industry by Mark SusterPreMoney SF 2017: State of the Venture Capital Industry by Mark Suster
PreMoney SF 2017: State of the Venture Capital Industry by Mark Suster500 Startups
 
Thomvest Ventures Real Estate Tech Review, Fall 2019
Thomvest Ventures Real Estate Tech Review, Fall 2019Thomvest Ventures Real Estate Tech Review, Fall 2019
Thomvest Ventures Real Estate Tech Review, Fall 2019Thomvest Ventures
 
Global Technology Trends & Top Ten Startup Hubs 2017
Global Technology Trends & Top Ten Startup Hubs 2017Global Technology Trends & Top Ten Startup Hubs 2017
Global Technology Trends & Top Ten Startup Hubs 2017Bernard Moon
 
Cb insights fintech-trends-2018
Cb insights fintech-trends-2018Cb insights fintech-trends-2018
Cb insights fintech-trends-2018남억 김
 
State of the US VC Market
State of the US VC MarketState of the US VC Market
State of the US VC MarketGGV Capital
 
Initial Coin Offerings (ICOs): The Class of 2017 - one year later
Initial Coin Offerings (ICOs): The Class of 2017 - one year laterInitial Coin Offerings (ICOs): The Class of 2017 - one year later
Initial Coin Offerings (ICOs): The Class of 2017 - one year laterEY
 
White Star Capital - Canadian Venture Capital Landscape 2018
White Star Capital - Canadian Venture Capital Landscape 2018White Star Capital - Canadian Venture Capital Landscape 2018
White Star Capital - Canadian Venture Capital Landscape 2018Sanjay Zimmermann
 
The Indian Venture Capital Ecosystem - Myths and Realities
The Indian Venture Capital Ecosystem - Myths and RealitiesThe Indian Venture Capital Ecosystem - Myths and Realities
The Indian Venture Capital Ecosystem - Myths and Realitiespen5ta
 
Cb insights asia-tech-investment-report
Cb insights asia-tech-investment-reportCb insights asia-tech-investment-report
Cb insights asia-tech-investment-reportGalen Growth
 
Pitch book 2017_unicorn_report
Pitch book 2017_unicorn_reportPitch book 2017_unicorn_report
Pitch book 2017_unicorn_reportLudwig Preller
 
F-Prime Capital: Market Perspective, 2018
F-Prime Capital: Market Perspective, 2018 F-Prime Capital: Market Perspective, 2018
F-Prime Capital: Market Perspective, 2018 F-Prime Capital
 
Fintech, Insurtech and Blockchain results of 2016 and trends for 2017
Fintech, Insurtech and Blockchain results of 2016 and trends for 2017Fintech, Insurtech and Blockchain results of 2016 and trends for 2017
Fintech, Insurtech and Blockchain results of 2016 and trends for 2017Vladislav Solodkiy
 

Similar to Is vc still a thing final (20)

Isvcstillathing final-190204194013
Isvcstillathing final-190204194013Isvcstillathing final-190204194013
Isvcstillathing final-190204194013
 
Isvcstillathing final-190204194013
Isvcstillathing final-190204194013Isvcstillathing final-190204194013
Isvcstillathing final-190204194013
 
Seed stage 2019 final
Seed stage 2019   finalSeed stage 2019   final
Seed stage 2019 final
 
State of Venture, Technology
State of Venture, Technology State of Venture, Technology
State of Venture, Technology
 
LUMA's State of Digital Marketing at DMS West 17
LUMA's State of Digital Marketing at DMS West 17LUMA's State of Digital Marketing at DMS West 17
LUMA's State of Digital Marketing at DMS West 17
 
2O19 Fintech Trends To Watch
2O19 Fintech Trends To Watch 2O19 Fintech Trends To Watch
2O19 Fintech Trends To Watch
 
2019 Fintech Trends To Watch by CBInsights
2019 Fintech Trends To Watch by CBInsights2019 Fintech Trends To Watch by CBInsights
2019 Fintech Trends To Watch by CBInsights
 
The Changing Structure of the Venture Capital Industry
The Changing Structure of the Venture Capital IndustryThe Changing Structure of the Venture Capital Industry
The Changing Structure of the Venture Capital Industry
 
PreMoney SF 2017: State of the Venture Capital Industry by Mark Suster
PreMoney SF 2017: State of the Venture Capital Industry by Mark SusterPreMoney SF 2017: State of the Venture Capital Industry by Mark Suster
PreMoney SF 2017: State of the Venture Capital Industry by Mark Suster
 
Thomvest Ventures Real Estate Tech Review, Fall 2019
Thomvest Ventures Real Estate Tech Review, Fall 2019Thomvest Ventures Real Estate Tech Review, Fall 2019
Thomvest Ventures Real Estate Tech Review, Fall 2019
 
Global Technology Trends & Top Ten Startup Hubs 2017
Global Technology Trends & Top Ten Startup Hubs 2017Global Technology Trends & Top Ten Startup Hubs 2017
Global Technology Trends & Top Ten Startup Hubs 2017
 
Cb insights fintech-trends-2018
Cb insights fintech-trends-2018Cb insights fintech-trends-2018
Cb insights fintech-trends-2018
 
State of the US VC Market
State of the US VC MarketState of the US VC Market
State of the US VC Market
 
Initial Coin Offerings (ICOs): The Class of 2017 - one year later
Initial Coin Offerings (ICOs): The Class of 2017 - one year laterInitial Coin Offerings (ICOs): The Class of 2017 - one year later
Initial Coin Offerings (ICOs): The Class of 2017 - one year later
 
White Star Capital - Canadian Venture Capital Landscape 2018
White Star Capital - Canadian Venture Capital Landscape 2018White Star Capital - Canadian Venture Capital Landscape 2018
White Star Capital - Canadian Venture Capital Landscape 2018
 
The Indian Venture Capital Ecosystem - Myths and Realities
The Indian Venture Capital Ecosystem - Myths and RealitiesThe Indian Venture Capital Ecosystem - Myths and Realities
The Indian Venture Capital Ecosystem - Myths and Realities
 
Cb insights asia-tech-investment-report
Cb insights asia-tech-investment-reportCb insights asia-tech-investment-report
Cb insights asia-tech-investment-report
 
Pitch book 2017_unicorn_report
Pitch book 2017_unicorn_reportPitch book 2017_unicorn_report
Pitch book 2017_unicorn_report
 
F-Prime Capital: Market Perspective, 2018
F-Prime Capital: Market Perspective, 2018 F-Prime Capital: Market Perspective, 2018
F-Prime Capital: Market Perspective, 2018
 
Fintech, Insurtech and Blockchain results of 2016 and trends for 2017
Fintech, Insurtech and Blockchain results of 2016 and trends for 2017Fintech, Insurtech and Blockchain results of 2016 and trends for 2017
Fintech, Insurtech and Blockchain results of 2016 and trends for 2017
 

More from Mark Suster

Funding in the time of Corona Virus
Funding in the time of Corona VirusFunding in the time of Corona Virus
Funding in the time of Corona VirusMark Suster
 
Managing Your Startup Board
Managing Your Startup BoardManaging Your Startup Board
Managing Your Startup BoardMark Suster
 
Staff at vc firms
Staff at vc firmsStaff at vc firms
Staff at vc firmsMark Suster
 
ICO 2.0 Summit - Keynote Presetnation
ICO 2.0 Summit - Keynote PresetnationICO 2.0 Summit - Keynote Presetnation
ICO 2.0 Summit - Keynote PresetnationMark Suster
 
Upfront Ventures Bitcoin & Blockchain VC Survey
Upfront Ventures Bitcoin & Blockchain VC SurveyUpfront Ventures Bitcoin & Blockchain VC Survey
Upfront Ventures Bitcoin & Blockchain VC SurveyMark Suster
 
Upfront Ventures blockchain and crypto deck
Upfront Ventures blockchain and crypto deckUpfront Ventures blockchain and crypto deck
Upfront Ventures blockchain and crypto deckMark Suster
 
Fundstrat Bitcoin & Blockchain presentation for Upfront Summit
Fundstrat Bitcoin & Blockchain presentation for Upfront SummitFundstrat Bitcoin & Blockchain presentation for Upfront Summit
Fundstrat Bitcoin & Blockchain presentation for Upfront SummitMark Suster
 
Upfront Ventures VC Survey 2017
Upfront Ventures VC Survey 2017Upfront Ventures VC Survey 2017
Upfront Ventures VC Survey 2017Mark Suster
 
Upfront LP Survey of the Venture Capital & Startup Industry
Upfront LP Survey of the Venture Capital & Startup IndustryUpfront LP Survey of the Venture Capital & Startup Industry
Upfront LP Survey of the Venture Capital & Startup IndustryMark Suster
 
Upfront State of the VC & Tech Industry 2017
Upfront State of the VC & Tech Industry 2017Upfront State of the VC & Tech Industry 2017
Upfront State of the VC & Tech Industry 2017Mark Suster
 
Final LA tech and venture landscape
Final LA tech and venture landscapeFinal LA tech and venture landscape
Final LA tech and venture landscapeMark Suster
 
Final san diego venture group keynote 2016
Final san diego venture group keynote   2016Final san diego venture group keynote   2016
Final san diego venture group keynote 2016Mark Suster
 
Final upfront lp survey data 2016
Final upfront lp survey data 2016Final upfront lp survey data 2016
Final upfront lp survey data 2016Mark Suster
 
VC survey data 2016
VC survey data 2016VC survey data 2016
VC survey data 2016Mark Suster
 
Upfront vc analysis 2016
Upfront vc analysis 2016Upfront vc analysis 2016
Upfront vc analysis 2016Mark Suster
 
Final venture outlook 2016
Final venture outlook 2016Final venture outlook 2016
Final venture outlook 2016Mark Suster
 
There is Something Going on in the LA Tech Market by Upfront Ventures
There is Something Going on in the LA Tech Market by Upfront VenturesThere is Something Going on in the LA Tech Market by Upfront Ventures
There is Something Going on in the LA Tech Market by Upfront VenturesMark Suster
 
Why It's Morning in Venture Capital
Why It's Morning in Venture CapitalWhy It's Morning in Venture Capital
Why It's Morning in Venture CapitalMark Suster
 
Final web summit (dublin oct 2013)
Final web summit (dublin oct 2013)Final web summit (dublin oct 2013)
Final web summit (dublin oct 2013)Mark Suster
 
Online video market sept 2013
Online video market sept 2013Online video market sept 2013
Online video market sept 2013Mark Suster
 

More from Mark Suster (20)

Funding in the time of Corona Virus
Funding in the time of Corona VirusFunding in the time of Corona Virus
Funding in the time of Corona Virus
 
Managing Your Startup Board
Managing Your Startup BoardManaging Your Startup Board
Managing Your Startup Board
 
Staff at vc firms
Staff at vc firmsStaff at vc firms
Staff at vc firms
 
ICO 2.0 Summit - Keynote Presetnation
ICO 2.0 Summit - Keynote PresetnationICO 2.0 Summit - Keynote Presetnation
ICO 2.0 Summit - Keynote Presetnation
 
Upfront Ventures Bitcoin & Blockchain VC Survey
Upfront Ventures Bitcoin & Blockchain VC SurveyUpfront Ventures Bitcoin & Blockchain VC Survey
Upfront Ventures Bitcoin & Blockchain VC Survey
 
Upfront Ventures blockchain and crypto deck
Upfront Ventures blockchain and crypto deckUpfront Ventures blockchain and crypto deck
Upfront Ventures blockchain and crypto deck
 
Fundstrat Bitcoin & Blockchain presentation for Upfront Summit
Fundstrat Bitcoin & Blockchain presentation for Upfront SummitFundstrat Bitcoin & Blockchain presentation for Upfront Summit
Fundstrat Bitcoin & Blockchain presentation for Upfront Summit
 
Upfront Ventures VC Survey 2017
Upfront Ventures VC Survey 2017Upfront Ventures VC Survey 2017
Upfront Ventures VC Survey 2017
 
Upfront LP Survey of the Venture Capital & Startup Industry
Upfront LP Survey of the Venture Capital & Startup IndustryUpfront LP Survey of the Venture Capital & Startup Industry
Upfront LP Survey of the Venture Capital & Startup Industry
 
Upfront State of the VC & Tech Industry 2017
Upfront State of the VC & Tech Industry 2017Upfront State of the VC & Tech Industry 2017
Upfront State of the VC & Tech Industry 2017
 
Final LA tech and venture landscape
Final LA tech and venture landscapeFinal LA tech and venture landscape
Final LA tech and venture landscape
 
Final san diego venture group keynote 2016
Final san diego venture group keynote   2016Final san diego venture group keynote   2016
Final san diego venture group keynote 2016
 
Final upfront lp survey data 2016
Final upfront lp survey data 2016Final upfront lp survey data 2016
Final upfront lp survey data 2016
 
VC survey data 2016
VC survey data 2016VC survey data 2016
VC survey data 2016
 
Upfront vc analysis 2016
Upfront vc analysis 2016Upfront vc analysis 2016
Upfront vc analysis 2016
 
Final venture outlook 2016
Final venture outlook 2016Final venture outlook 2016
Final venture outlook 2016
 
There is Something Going on in the LA Tech Market by Upfront Ventures
There is Something Going on in the LA Tech Market by Upfront VenturesThere is Something Going on in the LA Tech Market by Upfront Ventures
There is Something Going on in the LA Tech Market by Upfront Ventures
 
Why It's Morning in Venture Capital
Why It's Morning in Venture CapitalWhy It's Morning in Venture Capital
Why It's Morning in Venture Capital
 
Final web summit (dublin oct 2013)
Final web summit (dublin oct 2013)Final web summit (dublin oct 2013)
Final web summit (dublin oct 2013)
 
Online video market sept 2013
Online video market sept 2013Online video market sept 2013
Online video market sept 2013
 

Recently uploaded

Meet Raj Shamani: A Trailblazing Entrepreneur
Meet Raj Shamani: A Trailblazing EntrepreneurMeet Raj Shamani: A Trailblazing Entrepreneur
Meet Raj Shamani: A Trailblazing Entrepreneurramya202104
 
Shopclues: Failure & Solutions in Business Model
Shopclues: Failure & Solutions in Business ModelShopclues: Failure & Solutions in Business Model
Shopclues: Failure & Solutions in Business ModelBhaviniSharma12
 
Mist Cooling & Fogging System Company in Egypt
Mist Cooling & Fogging System Company in EgyptMist Cooling & Fogging System Company in Egypt
Mist Cooling & Fogging System Company in Egyptopstechsanjanasingh
 
Mist Cooling & Fogging System Company in Saudi Arabia
Mist Cooling & Fogging System Company in Saudi ArabiaMist Cooling & Fogging System Company in Saudi Arabia
Mist Cooling & Fogging System Company in Saudi Arabiaopstechsanjanasingh
 
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...BilalAhmed717
 
14 march 2024-capital-markets-update eni.pdf
14 march 2024-capital-markets-update eni.pdf14 march 2024-capital-markets-update eni.pdf
14 march 2024-capital-markets-update eni.pdfEni
 
L-1 VISA Business (Plan Sample) - Plan Writers
L-1 VISA Business (Plan Sample) - Plan WritersL-1 VISA Business (Plan Sample) - Plan Writers
L-1 VISA Business (Plan Sample) - Plan WritersPlan Writers
 
EPC Contractors aspects Presentation.pdf
EPC Contractors  aspects Presentation.pdfEPC Contractors  aspects Presentation.pdf
EPC Contractors aspects Presentation.pdfGiuseppe Tommasone
 
pitchdeck ORPC 2019 data info turine.pdf
pitchdeck ORPC 2019 data info turine.pdfpitchdeck ORPC 2019 data info turine.pdf
pitchdeck ORPC 2019 data info turine.pdflebob12
 
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdf
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdfCORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdf
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdfLouis Malaybalay
 
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)CXO 2.0 Conference
 
Business Models and Business Model Innovation
Business Models and Business Model InnovationBusiness Models and Business Model Innovation
Business Models and Business Model InnovationMichal Hron
 
We are inviting you on board, to move forward together in the Right Direction
We are inviting you on board, to move forward together in the Right DirectionWe are inviting you on board, to move forward together in the Right Direction
We are inviting you on board, to move forward together in the Right DirectionRight Direction Aero
 
NewBase 14 March 2024 Energy News issue - 1707 by Khaled Al Awadi_compress...
NewBase  14 March  2024  Energy News issue - 1707 by Khaled Al Awadi_compress...NewBase  14 March  2024  Energy News issue - 1707 by Khaled Al Awadi_compress...
NewBase 14 March 2024 Energy News issue - 1707 by Khaled Al Awadi_compress...Khaled Al Awadi
 
Streamlining Your Accounting A Guide to QuickBooks Migration Tools.pptx
Streamlining Your Accounting A Guide to QuickBooks Migration Tools.pptxStreamlining Your Accounting A Guide to QuickBooks Migration Tools.pptx
Streamlining Your Accounting A Guide to QuickBooks Migration Tools.pptxPaulBryant58
 
Pitch Deck Teardown: SuperScale's $5.4M Series A deck
Pitch Deck Teardown: SuperScale's $5.4M Series A deckPitch Deck Teardown: SuperScale's $5.4M Series A deck
Pitch Deck Teardown: SuperScale's $5.4M Series A deckHajeJanKamps
 
Shravan Kumaran and sanjay kumaran.pdf..
Shravan Kumaran and sanjay kumaran.pdf..Shravan Kumaran and sanjay kumaran.pdf..
Shravan Kumaran and sanjay kumaran.pdf..ranjithapriya2
 
Record of Module Forensic photography in
Record of Module Forensic photography inRecord of Module Forensic photography in
Record of Module Forensic photography inalexademileighpacal
 
A Comprehensive Case Study on the IL&FS Crisis (final).pptx
A Comprehensive Case Study on the IL&FS Crisis (final).pptxA Comprehensive Case Study on the IL&FS Crisis (final).pptx
A Comprehensive Case Study on the IL&FS Crisis (final).pptxShainaMaheshwari1
 

Recently uploaded (20)

Meet Raj Shamani: A Trailblazing Entrepreneur
Meet Raj Shamani: A Trailblazing EntrepreneurMeet Raj Shamani: A Trailblazing Entrepreneur
Meet Raj Shamani: A Trailblazing Entrepreneur
 
Shopclues: Failure & Solutions in Business Model
Shopclues: Failure & Solutions in Business ModelShopclues: Failure & Solutions in Business Model
Shopclues: Failure & Solutions in Business Model
 
Mist Cooling & Fogging System Company in Egypt
Mist Cooling & Fogging System Company in EgyptMist Cooling & Fogging System Company in Egypt
Mist Cooling & Fogging System Company in Egypt
 
Mist Cooling & Fogging System Company in Saudi Arabia
Mist Cooling & Fogging System Company in Saudi ArabiaMist Cooling & Fogging System Company in Saudi Arabia
Mist Cooling & Fogging System Company in Saudi Arabia
 
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...
Project Work on Consumer Behavior in Fast Food Restaurants. Their behavior to...
 
WAM Corporate Presentation Mar 12 2024.pdf
WAM Corporate Presentation Mar 12 2024.pdfWAM Corporate Presentation Mar 12 2024.pdf
WAM Corporate Presentation Mar 12 2024.pdf
 
14 march 2024-capital-markets-update eni.pdf
14 march 2024-capital-markets-update eni.pdf14 march 2024-capital-markets-update eni.pdf
14 march 2024-capital-markets-update eni.pdf
 
L-1 VISA Business (Plan Sample) - Plan Writers
L-1 VISA Business (Plan Sample) - Plan WritersL-1 VISA Business (Plan Sample) - Plan Writers
L-1 VISA Business (Plan Sample) - Plan Writers
 
EPC Contractors aspects Presentation.pdf
EPC Contractors  aspects Presentation.pdfEPC Contractors  aspects Presentation.pdf
EPC Contractors aspects Presentation.pdf
 
pitchdeck ORPC 2019 data info turine.pdf
pitchdeck ORPC 2019 data info turine.pdfpitchdeck ORPC 2019 data info turine.pdf
pitchdeck ORPC 2019 data info turine.pdf
 
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdf
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdfCORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdf
CORPORATE SOCIAL RESPONSIBILITY - FINAL REQUIREMENT.pdf
 
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)
CXO 2.0 Conference (Event Information Deck | Dec'24-Mar'25)
 
Business Models and Business Model Innovation
Business Models and Business Model InnovationBusiness Models and Business Model Innovation
Business Models and Business Model Innovation
 
We are inviting you on board, to move forward together in the Right Direction
We are inviting you on board, to move forward together in the Right DirectionWe are inviting you on board, to move forward together in the Right Direction
We are inviting you on board, to move forward together in the Right Direction
 
NewBase 14 March 2024 Energy News issue - 1707 by Khaled Al Awadi_compress...
NewBase  14 March  2024  Energy News issue - 1707 by Khaled Al Awadi_compress...NewBase  14 March  2024  Energy News issue - 1707 by Khaled Al Awadi_compress...
NewBase 14 March 2024 Energy News issue - 1707 by Khaled Al Awadi_compress...
 
Streamlining Your Accounting A Guide to QuickBooks Migration Tools.pptx
Streamlining Your Accounting A Guide to QuickBooks Migration Tools.pptxStreamlining Your Accounting A Guide to QuickBooks Migration Tools.pptx
Streamlining Your Accounting A Guide to QuickBooks Migration Tools.pptx
 
Pitch Deck Teardown: SuperScale's $5.4M Series A deck
Pitch Deck Teardown: SuperScale's $5.4M Series A deckPitch Deck Teardown: SuperScale's $5.4M Series A deck
Pitch Deck Teardown: SuperScale's $5.4M Series A deck
 
Shravan Kumaran and sanjay kumaran.pdf..
Shravan Kumaran and sanjay kumaran.pdf..Shravan Kumaran and sanjay kumaran.pdf..
Shravan Kumaran and sanjay kumaran.pdf..
 
Record of Module Forensic photography in
Record of Module Forensic photography inRecord of Module Forensic photography in
Record of Module Forensic photography in
 
A Comprehensive Case Study on the IL&FS Crisis (final).pptx
A Comprehensive Case Study on the IL&FS Crisis (final).pptxA Comprehensive Case Study on the IL&FS Crisis (final).pptx
A Comprehensive Case Study on the IL&FS Crisis (final).pptx
 

Is vc still a thing final

  • 1. !1 Mark Suster @msuster Chang Xu @_changxu Is VC Still A Thing? Image Credit: Freepik
  • 2. !2 Last year, the discussion was how ICOs were going to wipe out VC. Image Credit: Pexels
  • 3. 3 And we know some founders eschew venture capital. Image Credit: Pexels
  • 4. 4 Some fear that SoftBank, Sequoia and sovereign wealth funds may eat VCs alive. Image Credit: Pexels
  • 5. Let’s take a closer look at what’s actually happening. !5 Image Credit: Pexels
  • 6. 6 We all know that startup funding is up massively… …and VC funds are raising significantly more capital. 2006 2008 2010 2012 2014 2016 2018 $131B $83B $29B 2006 2008 2010 2012 2014 2016 2018 $55B $34B $34B Source: Pitchbook NVCA Venture Monitor 4Q’18
  • 7. Some LPs express concerns about valuation creep or too much capital. !7
  • 8. But let’s peel back the onion to see what’s really happening. 8 Image Credit: Freepik
  • 9. 9 The number of Pre-Seed deals (<$1M) backed by VCs skyrocketed (600%) but has cooled off by 1/3rd over the past three years. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 US VC Number of Deals under $1M 3,374 488 3,543 2,144 Source: Pitchbook NVCA Venture Monitor 4Q’18 >600% Cooled off by >1/3
  • 10. 10 The exact same phenomenon happened in the Seed market ($1-5M). 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 US VC Number of $1-5M Deals 3,315 1,036 3,104 2,699 Source: Pitchbook NVCA Venture Monitor 4Q’18 >300% Down ~20%
  • 11. 11 And the number of Micro Funds raised has followed in lock step. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 # Funds and Capital Raised ($) for <$100M Funds 181 83 181 129 Source: Pitchbook NVCA Venture Monitor 4Q’18 2.2x Down 30%
  • 12. What is going on at the seed stage? !12 Image Credit: Pexels
  • 13. 13 For one thing, traditional Series A venture capital hasn’t meaningfully increased investment pace over the past decade. US VC Number of $5-10M Deals 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1,118 687 Source: Pitchbook NVCA Venture Monitor 4Q’18 4% CAGR
  • 14. 14 Series B deal volume also has been fairly constant over the past decade. US VC Number of $10-25M Deals 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* 1,103 643 Source: Pitchbook NVCA Venture Monitor 4Q’18 5% CAGR
  • 15. 15 As a result, we see a rise in the “Seed Extension” deals feeding into the Series A pipeline and companies staying in seed phase for longer. Source: Cendana Capital portfolio company data (with permission) Time to Series A Pre-2012 2012 2013 2014 2015 2016 2017 2018 0.9 1.2 0.8 1.1 1.2 1.2 1.4 1.6 Number of Seed Extension Rounds Pre-2012 2012 2013 2014 2015 2016 2017 2018 69 45 52 39 28 1189 Median years from Series Seed to A
  • 16. 16 The Series A and B part of the market is very similar to how it was 15 years ago— except with a 3x bigger top end of the funnel. Series A funds Series A funds THEN NOW Angel / Seed Angel / pre-seed Seed funds Source: Upfront analysis Series B funds Series B funds Bottom end of the funnel haven’t changed much Top end of the funnel is now 3x larger
  • 17. 17 While it’s true that there has been valuation creep for Series A and B… US VC Median Pre-Money Valuation ($M) by Year $0M $15M $30M $45M $60M 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* Series A Series B Source: Pitchbook NVCA Venture Monitor 4Q’18
  • 18. 18 …part of fund size increases has been about maintaining ownership levels. US VC Series A Round Median Ownership 0% 10% 20% 30% 40% 1990s 2014 2015 2016 2017 2018 25% 25% 26% 28% 29% Methodology: For 2014-2018, divided Median Deal Size by Median Post-Money Valuation for Series A deals Source: Pitchbook data for 2014-2018, Upfront analysis 35%+
  • 19. !19 For the best VC funds, the upside case has never been bigger. Let’s zoom out and I’ll explain. Image Credit: Pexels
  • 20. 20 We all know that capital going to startups has increased significantly in the past five years (by 300%). US VC Capital Invested by Deal Size ($B) 2013 2014 2015 2016 2017 2018 $131B $83B$77B$83B $71B $48B Source: Pitchbook NVCA Venture Monitor 4Q’18
  • 21. 21 Most of this capital increase, though, falls into three buckets that can be called “mega-rounds.” Source: Pitchbook NVCA Venture Monitor 4Q’18, Upfront analysis $20B Total $40B Total $21B Total $61B in deals over $100M $81B in deals over $50M$50- 100M $100M -1B $1B+ US VC Capital Invested by Deal Size in 2018 ($B)
  • 22. 22 What really happened is that the IPO window was pushed out 5+ years for the best companies and the dollars have shifted from public to private. Old IPO 6-8 years New IPO 10-12 years $50M $2B++ $RaisedPriortoIPO
  • 23. 23 Source: Pitchbook 3 $7M $23M $9M $60M 5 6 $35M $100M $65M $355M VC $ Raised Prior to IPO Last Private Market Valuation Number of Years Private In the past, the best companies IPO’d in 6-7 years from inception. As a result the value captured was all in the public markets. Companies Founded Before 2000
  • 24. 24 119 10 $1.7B $10B $4.9B $15B $4.4B $31B $19.9B $72B 12 $1.2B $7B $370M $1.5B Note: Due to limited data set, included high-profile tech companies that are expected to IPO in 2019 (Uber, Lyft, Airbnb, Slack) Source: Pitchbook VC $ Raised Prior to IPO Last Private Market Valuation Number of Years Private But now the goalposts have moved and the best companies are staying private twice as long. This is a massive opportunity for venture firms that have ownership and pro rata rights. Companies Founded Since 2006
  • 25. 25 Source: Yahoo Finance If Amazon, Google and Salesforce had each stayed private for 12 years, an additional $197 billion in value creation could have occurred pre-IPO. $0B $207.5B $415B $622.5B $830B -2 -1 +1 +2 +3 +4 +5 +6 +7 +8 +9 +10 +11 +12 +13 +14 +15 +16 +17 +18 +19 +20 $0B $207.5B $415B $622.5B $830B -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 +7 +8 +9 +10 +11 +12 +13 $0B $207.5B $415B $622.5B $830B -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 +7 +8 +9 +10 +11 +12 +13 $708B $102B $829B Year 12 $18B Year 12 $162B Year 12 $17B FOUNDED IPO IPOFOUNDED FOUNDED IPO 1999 2004 2004 1998 1994 1997 2018 2018 2018 Market Cap Appreciation – IPO to 12 Years Post-Inception
  • 26. 26 Here is the “private IPO” phenomenon in numbers. Source: Pitchbook NVCA Venture Monitor 4Q’18 0 50 100 150 200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IPOs Mega-rounds ($100M+ financings) Total Mega-Round Count 198 104 79 109 125 85 58 43 79 82
  • 27. 27 54 new companies raised at more than $1 billion valuation. Number of Unicorn Births 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3 4 4 9 11 12 42 43 22 34 54 Source: Pitchbook Unicorn Report 2018, Pitchbook analysis
  • 28. 28 Just five years ago, $100M+ rounds accounted for just 13% of financings as opposed to 47% in 2018. Traditional Venture Capital has only grown 14% per year. Source: Pitchbook NVCA Venture Monitor 4Q’18 US VC Capital Invested by Deal Size ($B) 2013 2014 2015 2016 2017 2018 70 41 $48B $131B GROWTH Mega-rounds ≥$100M 6 61 VENTURE <$100M rounds 14% CAGR 60% CAGR
  • 29. 29 The private IPO trend seems to have gathered steam in 2014. 2008 2009 2010 2011 2012 2013 20 14 25 46 28 36 2014 2015 2016 2017 2018 82 109 79 104 198 Source: Pitchbook NVCA Venture Monitor 4Q’18 US Mega-Round ($100M+) Financings by Year
  • 30. 30 So in reality it seems the private capital market is now three fairly distinct categories. Venture Capital Scale or Bust Private IPOs Growth Capital The Start Seed Capital 20% of deals drive 80% of returns
  • 31. 31 So while time-to-liquidity for VCs has been pushed out, the best VCs (and LPs) are compensated by capturing more of the upside. Pro rata rights have become much more valuable in the best deals. Series A 20% Seed 10% Which is why many stage funds have set up companion funds to defend their ownership through exit Growth Funds Opportunity Funds SPVs Target Ownership @ Exit Structural Changes to Defend Ownership Through Exit
  • 32. So no, Venture Capital is not dead. Here are some thoughts on why the next decade should see even more upside. !32 Image Credit: Freepik
  • 33. Global Internet Users (Millions) 1999 2013 2018 4,200 2,800 250 33 In 1999, the US VC industry raised $53 billion for a nascent Internet population. 20 years later, we have 77% of US and 56% of the world online with $55 billion raised. Source: World Bank; Internet World Stats; Pitchbook; Industry Ventures US Internet Users (Millions) 1999 2013 2018 250 230 100
  • 34. 34 Connection speeds in 2018 is a whopping 400 times faster than that in 1999. Source: Akamai’s State of the Internet, Statista 1999 2014 United States (Avg Speed, Mbps) 2017 50 Kbps 11.1 18.7 Dial Up
  • 35. 35 Nearly everybody now has a computer in their pocket. Source: Newzoo, GSMA Global 27% 56%United States 66% 72% 1999 2013 2017 N/A N/A Smartphone Penetration
  • 36. 36 Because we’re all connected—when concepts work, they scale much faster and become much more dominant than at any point in human history. Source: Upfront analysis Monthly Active Users (Millions) 0 500 1,000 1,500 2,000 2,500 1999 2013 2018 2,271 1,189 0 1,057 2360 3262180 1,000 1300 186330 Not in existence 130 33 186
  • 37. 37 And with everybody’s credit cards or banks now connected to tech platforms, we’ve eliminated most purchase friction. We’re one tap away from buying online. *Amazon user data is estimated as straight line from IPO (1997) to 2018 reported values Source: Upfront Analysis, PayPal, Loup Ventures, BigCommerce Total Active Users (Millions) 175 350 525 700 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 *
  • 38. Most industry analysts haven't even begun to comprehend what an enormous shift 5G speeds will bring. We anticipate enormous creative destruction and company creation. !38 Note: Represented AT&T’s average 3G and 4G download speed. 5G networks have the potential to be significantly faster but data is only available from simulated environments Source: RootMetrics, Wikipedia, Upfront analysis 3G 4G 5G 2G <1 Mbps 4 Mbps 25 Mbps ?
  • 39. !39 What does this all mean? Image Credit: Pexels
  • 40. !40 Traditional Seed & VC more valuable than ever.
 Value has shifted from publics to privates but skills in VC vs. Growth remain distinct.
 We are all now broadband, mobile, social & 1-click to buy. The pace of technology & networks will continue to create enormous new opportunities. Image Credit: Pexels
  • 41. !41 Mark Suster @msuster Chang Xu @_changxu So yeah, VC Is Still A Thing Image Credit: Freepik