WTIA 2009—Tim Draper

November 2008

Economic Nuke

Nuclear Winter

The press painted a grim picture

Investors are looking for direction

Real estate values have plummeted

Stock markets are down

Lending is frozenCompanies are laying

off employees

Consumer and capital spending have

slowed

Monopolies block liquidity:

Government Regulations—Sarbox, The 40 Act, 409ABulge Bracket Distribution Controls—Syndication, Sales, Trading, Investment BankingNasdaq/NYSE Restrictions—Acceptance Hurdles, Fees Big 3 Standards—FAS 157, FAS 141, FASBDinosaur Technologies—Stock transfers, Bloomberg

Liquidity Crisis

Liquidity ProblemsLiquidity Problems

Don’t panic

Don’t cling to the past

Crisis orOpportunity

New game

With great power…It is all up to you!!!!

Best time ever to start a business:Best time ever to start a business:

1.1. People need jobsPeople need jobs

2.2. Existing companies are reelingExisting companies are reeling

3.3. Fewer start-up competitorsFewer start-up competitors

4.4. Newer technologiesNewer technologies

5.5. You are young!!!!!!!You are young!!!!!!!

Companies that started in recessions or depressionsCompanies that started in recessions or depressions

Best time ever to invest venture capital money in USBest time ever to invest venture capital money in US

1.1. Recession/DepressionRecession/Depression

2.2. Low valuationsLow valuations

3.3. Liquidity solutionsLiquidity solutions

4.4. Less competition for VC’s, entrepreneursLess competition for VC’s, entrepreneurs

5.5. New technologiesNew technologies

Inventions in the past 50 years

COMPUTERS EMAILFAX

FIBER OPTICS BIOTECH

SMART PHONES

NANOTECH

PHOTOCOPIER

SEARCH ENGINES

SPACE TRAVEL

JETS CREDIT CARDS ICsMICROWAVENUCLEAR POWER THE PILL

DVRs

VOICEMAIL

SATELLITES

INTERNET WEB BROWSERS

MRIs

DIGITAL CAMERAS

CELL PHONES

Future possibilities

ABUNDANT CHEAP WATER

NON-INVASIVE SURGERY

ENERGY EFFICIENT BUILDINGS

LONG-LASTING BATTERIES

INTERACTIVE EDUCATION

CLOUD COMPUTING

IMMERSIVE 3-D ENTERTAINMENT

FOOD DROPCURES FOR CANCER, AIDS & MALARIA

GENETIC DISEASE PREDICTION

NEAR INFINITE ENERGY SUPPLY

NEAR-THOUGHT COMMUNICATIONS

NEW LIFE FORMS FOOD SUPPLY

CURE FOR HEART DISEASE

SELF-NAVIGATINGELECTRIC CARS

One thing has not changed….

Innovation is exponential and relentless

Companies can post their profile and control access

Investors can peruse, connect with companiesbuy and sell Shares

Matching platform connects buyers and sellers of shares

Springboard to an IPO

Longer term

Xchange will allow companies to raise money through an XPO

Xchange will allow users to trade shares through the system

Springboard to an IPO

Liquidity:

The Cost of CommunismThe Cost of Communism

GDP Per Capita NormalizedGDP Per Capita Normalized

The Cost of CommunismThe Cost of Communism

Growth Rates GDPGrowth Rates GDP

The Sucking Sound of The Sucking Sound of SocialismSocialism

US government spending damps GDP growthUS government spending damps GDP growth

The Sucking Sound of The Sucking Sound of SocialismSocialism

Good WordsOpportunityEarningsBusiness SolutionLet losers dieFreedomFree Trade

Bad WordsEntitlementRightGovernment InterventionBailoutRegulationPatriotism>Protection>Poverty

The Importance of Liquidity:

Human flexibilitySpeed of gratificationFewer desperate buyers/sellersThe deal.

The Deal

Free Trade!!!!!!!!!

Without China:No Semiconductors

Without China:No Flat Screens

Without China:No Memory

Without Computers:No Software

Without Software:No New Media

Zeroed Business ModelsZeroed Business Models

CompanyAmazonParametricHotmail, SkypeOverture, Google, Baidu

EliminatedInventory and A/RExcess Engineering CostsMarketing ExpenseAd Sales Expense

RevolutionsRevolutions

CompanyAmazonHotmailSkypeGoogle, BaiduEBay

RenovatedThe Book StoreThe Post OfficeThe Telephone CompanyThe BroadcastersThe Trading Post

Problem SolversProblem Solvers

CompanyReva, TeslaEnernoc, Solar CityAthenaHealth, QuickHealthSkype, Hotmail, MeeboGlam, KyteTVGraspr,Skygrid, YeePay, MchkWigixMginger, ContextWeb

SolvingTransportation ProblemEnergy ProblemMedical ProblemGlobal Peace ProblemMedia Control ProblemEducation ProblemFinancial ProblemEbay ProblemSpam Problem

Never forget: Entrepreneurs are heroes.

Create new jobsBuild value from nothingMake lives betterRebuild the economy

The Riskmaster (all rights reserved)(Lyrics by Tim Draper)

Invested all his mattress moneyDivorced his Prom Queen hometown honey

Scraping up his alimonyFriends think he’s a little “funny”

Needs a “world class CEO.”Just another million or so

Get him to some real cash flowSo tears and sweat can IPO

For 15 years he’s been out gunnedBankers demanding blood refund

Company’s looking MoribundEven Draper will not fund!

Chorus:

He is the RiskmasterLives fast drives fasterSkates on the edge of disasterHe is the Riskmaster

He’s got a missionCompany vision

An artist’s ambitionGut intuition

Fearless and free employeeNo guarantee for the corporate escapee

Team fights on against the trendHad to lay off his best friend

Called a “recession” seems like “depression.”

Chapter seven. Is this the end?

But then a salesman shouts, “We got it!” The company’s gonna show a profitTo think the papers rang, “quixotic”

The sky has opened astronautic.

Chorus:

He is the RiskmasterLives fast drives fasterSkates on the edge of disasterHe is the Riskmaster

He is on top, on top of the worldAt last they see it. Vision unfurled!

Cashflow landslide!Now everybody wants a piece of his hide.

Court wants him tried. Press wants him fried. Anyone this rich must have lied.

Chorus:

He is the RiskmasterLives fast drives fasterSkates on the edge of disasterHe is the Riskmaster

Thank You

Tim DraperDraper Fisher Jurvetson

Tim@DFJ.com

www.TheRiskmaster.com

To the rescue:

sharespost