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CONFIDENTIAL
Startup & Venture Lessons
Duke Presentation at Dogpatch Labs
Jay Jamison
Partner, BlueRun Ventures
[email protected] | @jay_jamison | jayjamison.com
CONFIDENTIAL
Agenda
Introduction
Early Stage Valuation Methods
Exiting
VC: Venture or Vulture Capital?
CONFIDENTIAL 3
Introduction
• Duke, BA, English, 1992
• Emory Law School, 1995-96
• MBA, Wharton,1998
• Microsoft, 1998-2007
• Founder, Moonshoot, 2007-10
• Partner, BlueRun Ventures, 2010-Present
CONFIDENTIAL 4
About BlueRun Ventures
• Over $1.0B under management
• Investing out of Fund IV ($240M)
• Focus: Mobile & consumer internet
• Seed & Series A
CONFIDENTIAL 5
What is my job?
• Unearth great dealsFind
• Convince NewCo to take our $Close
• Help NewCo reach full potentialAssist
CONFIDENTIAL 6
Early Stage Valuations
CONFIDENTIAL
It’s a Golden Age for Entrepreneurs….
Cheaper than ever to start a company.
Better resources
• Incubators: Y-Combinator, 500Startups, …
• Resources: Startup Digest, Lean Startup, TC, VB
Technology is easier to learn, access, &c.
• Codecademy
• RoR
• AWS Driving valuations up
CONFIDENTIAL
… And Investors Understand This.
I see lots of great companies that are:
• Capital efficient
• High velocity in coding and releasing
• Product in market with traction
• Clear customer insight on what works
• Battle-tested founding teams
• Clear, concrete ask on what $$$ they need
CONFIDENTIAL
Implication
While we’re in a Golden Age for Entrepreneurs, it is raising the bar
for most very early stage companies…
You need to prove more on very little money, because so many other
start-ups are already doing so.
CONFIDENTIAL 10
Early Stage Valuations
Plain vanilla Series A
• VC: 20-30%
• Option pool: 10-20%
• Founders & Angels keep rest
Items we watch
• Founder incentive must be very high
• Maintaining a clean cap table is important
Founders & Angels
60%ESOP15%
VC25%
CONFIDENTIAL 11
Exiting
CONFIDENTIAL 12
Exits
Stuff beyond your control
• The market
• The corporate politics on the other side
Stuff in your control
• Which founding teams you back
• Staying focused on execution until deal is signed
• Attracting alternative bidders
CONFIDENTIAL 13
VC: Venture or Vulture?
CONFIDENTIAL 14
Venture
• Unique and amazing form of capital
• Helped scale companies that have had massive impact
• And will continue to have an important role
CONFIDENTIAL 15
But, VC is not…
Summer Camp
CONFIDENTIAL 16
Our Aspiration
Adapted from Glenn Kelman, CEO Redfin, describing working w/ Pierre Lamond at his Plumtree.
Then Pierre Lamond, the Sequoia partner on the deal, began working out of our office, acting as the virtual CEO. Pierre made a point of being there the day one of his other companies went public. We looked at a news photo of all the smiling people, who seemed to be living in a gated community, on a planet I would never visit. Then Pierre said “that company was once even more screwed up than you are.”
CONFIDENTIAL 17
Recommended actions
Investigate and reference check any investor
• Past successes
• Past failures
Assess the friendliness of terms
• This tells you a lot about alignment w/ founders
CONFIDENTIAL 18
Thanks & Q&A