Parenting and Entrepreneurs

© 2013 David Teten. More at ffvc.com and teten.com

How to Raise Entrepreneurs…Children and Adults

David Teten ff Venture Capital (ffvc.com // @ffvc )

HBS Alumni Angels of NY (teten.com // @dteten )


Don’t Take Notes!

Download the slides at ffvc.com/parenting


David Teten (teten.com) •  Partner, ff Venture Capital, early-stage technology venture capital fund •  Founder and Chairman, Harvard Business School Angels of New York . •  Co-founded Venture Capital Access Program, introducing women and minority

entrepreneurs to Harvard-affiliated angels (JV with National Association of Investment Companies)

•  Lead author of first-ever research study on best practices in private equity/venture capital deal origination

•  Lead author of first-ever research study on best practices of venture capitalists in increasing portfolio company value through operational support

•  Lead author, The Virtual Handshake: Opening Doors and Closing Deals Online (TheVirtualHandshake.com)

•  Harvard MBA 1998, Yale BA, both with honors. •  @dteten


ff Venture Capital (ffvc.com)

•  Institutional angel-stage technology fund •  Over 180 investments in over 70 companies since 1999 •  First investments typically $75-$500K at valuations of <$5m pre-money •  Extensive resources to support portfolio companies’ growth, with 20

employees •  Prominent investments include:

Cornerstone OnDemand (IPO); Quigo Technologies (sold to AOL for reported $340m); Indiegogo; Klout; 500px; HowAboutWe


ff Venture Capital: Over 180 investments in 70 companies since 1999

Investments as of July 17, 2013 Only logos of active companies whose investment from ff VC is publicly disclosed are shown.


ffVC has invested in 8 women co-Founder/CEOs out of 38 new companies since December 2010. By comparison, women are about 5% of tech startup founders.

Investments as of July 17, 2013 Only logos of active companies whose investment from ff VC is publicly disclosed are shown.

http://www.forbes.com/sites/women2/2012/04/09/why-women-continue-to-lag-behind-men-in-the-startup-community-and-what-we-can-do-about-it/"


Info is private Inspired by Robert Bruner, Applied Mergers & Acquisitions, page 186

Info is public

Sweet spot of highest returns

Customers pay high prices

Customers pay low prices

Few competitors Many competitors

ffVC invests where other people are not playing.


Angel investing is a high-return activity.

•  Angel mean IRR ranges from 18% to 54% across 12 studies1

•  47% of angel investments exited at a loss, vs. 64% of VC investments2

•  Angel and VC rates of “home run” investments (IRR > 100%) are roughly equal 2

1 Historical Returns in Angel Markets, Right Side Capital Management, and other sources listed at http://techcrunch.com/2012/11/17/how-institutional-limited-partners-can-avoid-limited-returns/

2 Is It Worth It?, Journal of Business Venturing, http://www.crab.rutgers.edu/~richmich/NVF%20Spring%202013/ROR%20on%20VC.pdf http://www.flickr.com/photos/alancleaver/4375850315/sizes/m/in/photostream/


Harvard Business School Alumni Angels Global has grown dramatically since 2007.

•  Members are Harvard affiliates; invest in companies regardless of school affiliation

•  Over 800 members in 11 chapters globally •  Members invested in over 90 companies


Harvard Business School Angels of Greater New York (HBSAlumniAngels.com/NY)

•  In two years invested $2.3m in 16 companies. •  $52K average individual check size. •  Second largest angel group in tri-state area. •  Launched Venture Capital Access Program, focused on helping women

and minority investors raise capital from our network.


65%

35%

60%

40%

56% 45%

51% 49% 46% 54%

2010 2020 2030 2040 2050 White Non-Hispanic “Diverse” Population

America’s Growth

America will be a majority minority country shortly after 2040.

United States Department of Commerce


Venture Capital Access Program helps women & minority entrepreneurs raise capital from HBS Alumni Angels

partnership with the Marathon Foundation (TMF), a subsidiary of the National Association of Investment Companies.


VCAP Pilot Program Achievements - 2012

Media Coverage

Venture Capital Access Program Pilot Program – 2012 Results


Caveat: I’ve just begun my parenting career, so all my thoughts may be 100% wrong…


Caveat: Entrepreneurs ≠ Easy-to-Parent Kids


Caveat: We can’t possibly do everything for our kids that we’d like to do.

http://farm6.staticflickr.com/5019/5485513402_7a5052d997_z.jpg


1. Think different, be different


ffVC is seeking entrepreneurs playing in the white space.


2. “Play is the work of children” (Jean Piaget)…. so let children play as leaders.


Take leadership on the playground.

http://farm3.staticflickr.com/2470/5826718940_47ff606512_z.jpg


ffVC documents and spreads best practices across our portfolio.


3. Provide role models. You are the average of your 5 closest friends.

http://www.flickr.com/photos/25802865@N08/3178448986/


There are few people on TV, movies, or pop music that I view as role models. So we minimize our kids’ exposure.

http://farm2.staticflickr.com/1184/1360710739_923eae708c_z.jpg?zz=1


ffVC Mentor Network and Online Community supports our companies.

Karen Bantuveris, Founder/CEO of VolunteerSpot, PTA board member


4. Play individual sports as well as team sports.


ffVC uses a many-to-many team model, not the conventional VC hub-and-spoke model.

•  Accounting & finance •  Application development •  Best practices •  Community development •  Connections •  Discounted services •  Engineering •  Mentor network •  Public relations •  Recruiting •  Social media practices • Strategy


Any questions ?

Sign up for our mailing lists: ffvc.com

teten.com

Twitter: @ffvc

@dteten


Disclaimer

This Presentation is for the exclusive use of the recipients to whom it is addressed. References to the “Presentation” includes any information which has been or may be supplied in writing or orally in connection with the Presentation or in connection with any further inquiries in respect of the Presentation. This Presentation is not intended to serve as basis for any investment decision. While the information contained in this Presentation is believed to be accurate, the Preparers have not conducted any investigation with respect to such information. The Preparers expressly disclaim any and all liability for representations or warranties, expressed or implied, contained in, or for omissions from, this Presentation or any other written or oral communication transmitted to any interested party in connection with this Presentation so far as is permitted by law. In particular, but without limitation, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, estimates, forecasts, analyses or forward looking statements contained in this Presentation which involve by their nature a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied in this Presentation. By its acceptance hereof, each recipient agrees that none of the Preparers nor any of their respective Representatives shall be liable for any direct, indirect or consequential loss or damages suffered by any person as a result of relying on any statement in or omission from this Presentation, along with other information furnished in connection therewith, and any such liability is expressly disclaimed. Except to the extent otherwise indicated, this Presentation presents information as of the date hereof. The delivery of this Presentation shall not, under any circumstances, create any implication that there will be no change in the affairs of ff Venture Capital or HBS Alumni Angels after the date hereof. In furnishing this Presentation, the Preparers reserve the right to amend or replace this Presentation at any time and undertake no obligation to update any of the information contained in the Presentation or to correct any inaccuracies that may become apparent. This Presentation shall remain the property of ff Venture Capital and HBS Alumni Angels. This Presentation does not constitute a recommendation regarding the shares in ff Venture Capital or HBS Alumni Angels. No securities commission or regulatory authority in the United States or in any other country has in any way opined upon the accuracy or adequacy of this Presentation or the materials contained herein. This Presentation shall not form the basis of any contract. The distribution of this Presentation in certain jurisdictions may be restricted by law and, accordingly, recipients of this Presentation represent that they are able to receive this Presentation without contravention of any unfulfilled registration requirements or other legal restrictions in the jurisdiction in which they reside or conduct business. Date at your own risk.


Geo Time Period Study Total

Investments Exited

Investments IRR US 1994 -

present Band of Angels Website FAQ 240+ 63 54.0%

US 2010-11 Sohl: “The Angel Investor Market in 2011: The Recovery Continues” Unknown Unknown 18-28%

US 2009-10 Sohl: “The Angel Investor Market in 2010: A Market on the Rebound” Unknown Unknown 24-36%

US 2008-09 Sohl: “The Angel Investor Market in 2009: Holding Steady but Changes in Seed and Startup Investments”

Unknown Unknown 23-38%

US approx 2004-09

DeGennaro & Dwyer: "Expected Returns to Angel Investors" 603 434 33.0%

UK 2000-08 Wiltbank: "Siding with the Angels: Business angel investing - promising outcomes and effective strategies"

1080 406 24.6%

US 2007-08 Sohl: "The Angel Investor Market in 2008: A Down Year in Investment Dollars But Not in Deals"

Unknown Unknown 22.0%

US 2006-07 Sohl: "The Angel Investor Market in 2007: Mixed Signs of Growth" Unknown Unknown 27.7%

US 1990-07 Wiltbank & Boeker: "Returns to Angel Investors in Groups" 3,097 1,137 31.4%

US approx 1999-07

Villalobos & Payne: "Startup Pre-Money Valuation: The Keystone to Return on Investment"

117 117 24.3%

UK 1961- 1996 Mason & Harrison: "Is it worth it? The rates of return from informal venture capital investments"

372 128 37.4%

Average Angel Returns from Twelve Studies

Historical Returns in Angel Markets, Right Side Capital Management, and other sources listed at http://techcrunch.com/2012/11/17/how-institutional-limited-partners-can-avoid-limited-returns/

Date post:	23-Sep-2014
Category:	Business
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