how to invest in technology based startups
DESCRIPTION
www.SYD.vc. HOW TO INVEST IN TECHNOLOGY BASED STARTUPS. Andrey Shirben. @ ashirben @ SYDVentures. WHAT DO WE INVEST IN?. WHY TECH?. Investing in Tech is usually more about investing in people rather than in ideas - PowerPoint PPT PresentationTRANSCRIPT
HOW TO INVEST IN TECHNOLOGY BASED STARTUPS
@ashirben@SYDVentures
Andrey Shirben
www.SYD.vc
Andrey Shirben - SYD Ventures
WHAT DO WE INVEST IN?
Mining Real Estate Finance Tech
Traditional Not Really
“Safe” Hell No
ROI Binary
Term 7-10 years
Avg. Investment
10K-10M
Portfolio Share
???
2
Andrey Shirben - SYD Ventures 3
WHY TECH?
• Investing in Tech is usually more about investing in people rather than in ideas
• While it’s a high-risk investment – it can generate a higher upside (when it’s successful of course)
• Making a real contribution to the world of science/technology
Andrey Shirben - SYD Ventures 4
SAY GOODBYE TO YOUR MONEY
The healthiest approach for tech investments
Andrey Shirben - SYD Ventures 5
THE TEAM
• Most valuable part of a start-up company• Can make/brake the idea• Need to be highly motivated,
hungry for success & readyfor some shifting
• Experience is overrated
Andrey Shirben - SYD Ventures 6
THE PRODUCT (RISK ANALYSIS)• Why? What’s the pain?• What’s the business model?• Is the market big enough?• Is there enough marketing budget?
Andrey Shirben - SYD Ventures 7
BE CAREFUL OF:
• Hockey Stick Graphs• Solutions to non-existing problems• Viral promises - it’s not that easy…• Do your own market research – ask around,
consult with people that understand the specific industry
Andrey Shirben - SYD Ventures 8
DON’T BE SCARED OF:
• Young, inexperienced team – most likely they will do anything to prove themselves
• Technology – technical risk can typically be handled, while market mismatch can not…
• Lack of short term revenue• In short - follow your instinct
Andrey Shirben - SYD Ventures 9
WHEN TO INVEST?
• Pre seed• Seed• Series A• Series B• …
Pro’s & Con’s of investing early vs. later
Andrey Shirben - SYD Ventures 10
VALUATION
• No one actually knows• Traditional methods surely don’t work• Whatever you’re willing to pay
1,000,000
Andrey Shirben - SYD Ventures 11
INVESTOR’S APPROACH
• Think about the best interest of the company• Respect the entrepreneurs• Aim for the long term• Don’t spend much time minimizing the downside
Andrey Shirben - SYD Ventures 12
THE PORTFOLIO APPROACH
• The roulette rule• Let the statistics work for you, not against you• Vertical diversification• Geographical diversification• Stage diversification
“NEVER IGNORE A GUT FEELING, BUT NEVER BELIEVE IT IS
ENOUGH...” (ROBERT HELLER)
Andrey [email protected]
@ashirben@SYDVentures
www.SYD.vc