22. Venture Funding Myths Copyright VCs At Work Tarang Shah

23. Funding Model Copyright VCs At Work Tarang Shah Extended Team Scalability (Sales, Business Model, Product Core Team Product/ Idea Market Cofounding Team Stage 0 Formation Stage 1 Build & Prove Stage 2 Grow & Scale Funding Type How Much? Typical Valuation Dilution Seed Super Angel Series ASeries BSeries C Series D, E, F $50-500k $500k-2M $3-7M$7-25M$15M+$25M+ $1M $3-5M $5-10M$15M+$50M+$100M+ 25-40% 5-10% ??? Product-Market Fit

24. How do VCs think? Market First First identify promising market Look for promising team than can execute in that market Entrepreneur First First identify promising Entrepreneur Follow their lead into promising market opportunity

25. However…. Billion Dollar Market Promising Entrepreneur Successful Startup Successful Startup

26. High Integrity – Transparent and Trustworthy Big & Bold Head – “The World is Not Enough” ; Not afraid of non- consensus view Anatomy of Successful Entrepreneurs Balanced Ego – Big ego to pursue unconventional ideas but in-check ego to surround with people smarter than him Authenticity – Product view informed by 10k hours of tinkering; deep experience that provides insights into the fine nuances of market and customer Real Visionary – Can see the whole company beyond current product Passionate Disinterest – Passionate to seek out the truth but not biased about the outcome – highly objective Genuine & Avid Passion to solve the problem and make a difference -> A Missionary Personal Relevance to the pain point being solved – motivation beyond making money Iterative – Not afraid of failures but like Edison enjoys discoveries through methodical trial and errors Extremely Focused – breaking vision into short-term metrics and single- mindedly pursuing it. Big Ears – Listens actively and intently to customers and analytics Copyright VCs At Work Tarang Shah

27. Building World Class Team Copyright VCs At Work Tarang Shah

28. Anatomy of Successful Cofounding Team Complementary Skills (e.g. business, tech) Proven Chemistry Past Successful Working Relationship High Potential Cofounding Team Copyright VCs At Work Tarang Shah

29. Building World Class Team Hire for Cultural fit as much as functional skills Hire People you have worked with well before Lift the quality of team with each hire and fire Hire people who can start adding value day 1 – No time for training Hire unfettered passion without ego & restrictions of past learning Fire promptly and amicably someone who is not fitting well Copyright VCs At Work Tarang Shah

30. Building “A” Team VP Dir Mgr “B” Player hires “C” Players “C” Player hires “D” Players “D” Player hires “E” Players Pretty soon you have “Zombies” in your team CFOCTO CEO “B” CEO Egoistical, Insecure & Can’t attract smarter people to join Copyright VCs At Work Tarang Shah

31. Building “A” Team VP Dir Mgr “A” Player hires “A” Players Pretty soon you have world class “A” team “A” CEO CFOCTO CEO Copyright VCs At Work Tarang Shah

32. Culture of Success Copyright VCs At Work Tarang Shah

33. Can you identify promising markets? Changing Customer Behavior New Technology Highly Attractive Market Supporting Infrastructure

34. Can you identify promising markets? Changing Customer Behavior New Technology Supporting Infrastructure Highly Attractive Market

35. So what do you look for? Changing Customer Behavior New Technology Supporting Infrastructure Highly Attractive Market

36. Identifying Emerging Platforms Transistors Chips 1950 1960 19701980 1990 2000 Micro Computers PCs Intel Apple Microsoft 3Com Cisco Netscape eBay Amazon ??? IBM LANs WANs Internet Mobile

37. What are some of the Emerging Platforms Today? Smartphone iPad/ Tablet iPad/ Tablet PayPal Amazon ??? Facebook Twitter ???

38. Making of New Markets Horse Donkey Mule

39. Disrupting Established Markets Fat Cats New Technology New Lean Mean Cat Fat Telcos P2P Sharing Skype Blockbuster Internet Netflix

40. Disrupting Established Markets

41. Product Market Product-Market Fit Copyright VCs At Work Tarang Shah

42. Your Three Challenges… Copyright VCs At Work Tarang Shah

43. Your Three Challenges…

44. Copyright VCs At Work Tarang Shah Your Three Challenges…

45. R.I.P. (Rapid Iteration & Pivoting) Copyright VCs At Work Tarang Shah

46. R.I.P. (Rapid Iteration & Pivoting) Copyright VCs At Work Tarang Shah

47. High RPM & Small Turning Radius Copyright VCs At Work Tarang Shah

48. Key Considerations Copyright VCs At Work Tarang Shah