thefunded: hit the reset button

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The Reset Button The State of Funding Innovation The State of Funding Innovation in Q4, 2008 in Q4, 2008

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A presentation delivered in Tel Aviv to the Globes "Israel Business Conference."

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Page 1: TheFunded: Hit the Reset Button

The Reset ButtonThe Reset Button

The State of Funding Innovation The State of Funding Innovation

in Q4, 2008in Q4, 2008

The State of Funding Innovation The State of Funding Innovation

in Q4, 2008in Q4, 2008

Page 2: TheFunded: Hit the Reset Button

Let’s look on the bright side…Let’s look on the bright side…Let’s look on the bright side…Let’s look on the bright side…

Page 3: TheFunded: Hit the Reset Button

Now, for the bad news…Now, for the bad news…Now, for the bad news…Now, for the bad news…

IT’S NYSE HERE!

worrying about mortgage payments

vactioning in war torn public

markets

spending their last dollar to hit

a home run

Page 4: TheFunded: Hit the Reset Button

The model’s not working…The model’s not working…The model’s not working…The model’s not working…

FundraisingFundraising

ExitsExits

SOURCE: NVCA / Thompson Reuters Exit PollSOURCE: NVCA / Thompson Reuters VC Fundraising Q3

more money is invested than value is created

Page 5: TheFunded: Hit the Reset Button

So, let’s export it to China…So, let’s export it to China…So, let’s export it to China…So, let’s export it to China…

IsraelIsrael

CanadaCanada

ChinaChina

EuropeEurope

IndiaIndia

SOURCE: EE Times Asia Survey 12/07

Page 6: TheFunded: Hit the Reset Button

Still, nobody’s making real money…Still, nobody’s making real money…Still, nobody’s making real money…Still, nobody’s making real money…

< $50 MM $5 > $500 MM

FAILURE ACCEPTABLE SUCCESS

1 / 100 1 / 1,000 1 / 10,000

MANAGEMENT Bonus ~10% Value ~15% Value

INVESTORS 1x w/ lost time 3-10x >10x

EMPLOYEES Nothing Bonuses Millionaires

SUPPORT Lawyers $$$Lawyers + Bankers

Everyone

< $50 MM$50-500 MM

> $500 MMEXIT VALUES

Page 7: TheFunded: Hit the Reset Button

But, society is reaping rewards…But, society is reaping rewards…But, society is reaping rewards…But, society is reaping rewards…

Page 8: TheFunded: Hit the Reset Button

The point is…The point is…The point is…The point is…

Page 9: TheFunded: Hit the Reset Button

It’s all about building companies…It’s all about building companies…It’s all about building companies…It’s all about building companies…

The Present Way The Right Way

Goal Sell for $1 Billion Build a Great Company

Selection Crazy Projections Crazy Ideas

Valuation Arbitrary Ownership % Needs and Progress

Assistance Fundraising Business Development

Page 10: TheFunded: Hit the Reset Button

Some tips for VCs…Some tips for VCs…Some tips for VCs…Some tips for VCs…

• Invest in the unusual

• Believe in the impossible

• Stop being lazy!– help your portfolio

without conditions– back management,

don’t replace them:they have the passionand commitment

• Invest in the unusual

• Believe in the impossible

• Stop being lazy!– help your portfolio

without conditions– back management,

don’t replace them:they have the passionand commitment

Page 11: TheFunded: Hit the Reset Button

Some tips for entrepreneurs…Some tips for entrepreneurs…Some tips for entrepreneurs…Some tips for entrepreneurs…

• Cooperate– work with your competitors

since your industry is undereconomic assualt

• Conserve– conserve capital / resources

• Dominate!

• Cooperate– work with your competitors

since your industry is undereconomic assualt

• Conserve– conserve capital / resources

• Dominate!

Page 12: TheFunded: Hit the Reset Button

So, in conclusion…So, in conclusion…So, in conclusion…So, in conclusion…

IT’S NYSE HERE!