2. 40 Years…
in 90 Seconds
70‟s – videographer, television production, cable TV
80‟s – serial entrepreneur, teleconferencing, satellites
90‟s – technology licensing, intl. business
development
3. Creating Regional Wealth
Silicon Valley
Ireland
Sweden
Munich
Cambridge
Taiwan
Israel
Bangalore
Sophia Antipolis
MAJOR OBSERVATIONS:
4. The Second Decade of the 21st Century…
Post-“Naughty” High-Tech Generation
Living in the New Digital Economy
• Google, Explorer, Firefox, Chrome, Baidu
• facebook, LinkedIn, Twitter, Weibo, Pinterest
• iPhone/iPad, Smartphone apps
• Amazon, Ebay, Online sales – $1.5 Trillion
• YouTube, Daily Motion. Hulu, Yahoo Video
• E-Commerce ( NZ $3.16B in „12, up 19%)
5.
6. SF/Silicon Valley: My Take
• Thousands+ Bay Area Angels
• Almost 1/2 of USA (Ad)venture Capital
• 75+ Incubators + Hundreds of Events
• Dotcom and Social Media “HUB”
• SF is China‟s port of entry into the USA
• Early adopter, vanguard, “bellweather” locale
7. New Zealand: My Take
• Go/Grow Global Mentality (NOT a market)
• Internet/Mobile Startup “BOOM”
• Gov. $upport -- NZVIF and NZSCIF
• MSI/TechNZ R&D Investment Legacy
• Smart, Helpful Global KEA Network
• Dedicated Kiwi Landing Pad
8. How does the ecosystem work?
How are the people flowing?
How is the money flowing?
What‟s hot and what‟s not?
Postcard from the Valley
9. Silicon Valley Is Still King.
U.S. Venture Investment Activity 2Q2012
10. CAPITAL ORGANIZATIONS
EDUCATION
Mentors
Research/IP
Engineering & Science
POLICY
Intellectual Property
Investment
Immigration
Mergers & acquisitions
Public markets
CULTURE
Market
ENVIRONMENT
ECONOMY
START-
UPS
ENTRE-
PRENEURS
PRODUCTS
INFRASTRUCTURE
Communications
Transport
Hubs
Services
Consultants
Tech Industry
Large acquirers
Employee bases
Tolerance for failure
Reward for innovation
Meritocracy
Buy early
Buy later
The Silicon Valley
Ecosystem…
Angels
Super-Angels
Small institutionals
Large institutionals
Banks
Investment banks
11. ENVIRONMENT
ECONOMY
CAPITAL
Angels
Super-Angels
Small institutionals
Large institutionals
Banks
Investment banks
ORGANIZATIONS
EDUCATION
Mentors
Research/IP
Engineering & Science
POLICY
Intellectual Property
Investment
Immigration
Mergers & acquisitions
Public markets
CULTURE
Buy early
Buy later
Market
START-
UPS
ENTRE-
PRENEURS
PRODUCTS
INFRASTRUCTURE
Communications
Transport
Hubs
Services
Consultants
Large acquirers
Employee bases
Tolerance for failure
Reward for innovation
Meritocracy
…Is a System of Cycles
Tech Industry
13. …As does the Money
What
Money
Appears
When?
Idea
Prototype
MVP
First Customers
Initial Growth
Market Viability
Breakout Growth
Market Dominance
14. What‟s the Money Looking For?
Idea
Prototype
MVP
First Customers
Initial Growth
Market Viability
Breakout Growth
Market Dominance
Friends & Family
Angels
Super-Angels
Small Institutionals
Large Institutionals
Mid-stage Capital
Later-stage Capital
Public Markets
That Was “Then”…
This is an
over-
simplification,
but for
purposes of
illustration…
15. What‟s the Money Looking For?
Friends & Family
Launchpads
Angels
Super-Angels
Small Institutionals
Large Institutionals
Mid-stage Capital
Later-stage Capital
Public Markets
…This Is Now
Idea
Prototype
MVP
First Customers
Initial Growth
Market Viability
Breakout Growth
Market Dominance
16. Incubators, Accelerators,
Hubs & Habitats
Y Combinator
500 Startups
TechStars
AngelPad
Kicklabs
Founder Institute
I/O Ventures
Plug & Play
Techstar
The Hub
…and many more
17. Low-cost infrastructure
Barrier-to-entry nears zero
Launchpads can be efficient
One of the ramifications of “Abundance”
Social networks fuels adoption
Never easier to create a brand more rapidly
– or to destroy it
IPO>M&A>Acqui-Hire
Human resource is the scarce commodity
Large-scale VC model is widely regarded as broken
Too much money chasing too few exits
What‟s Changed?
18. Cloud
Mobile
Social
Security
Big Data
Quantified Self
Key Trends Rule in the Valley
19. The current many Chinas
China has over 33 provincial level
administrations:
23 provinces
5 autonomous regions
4 municipalities directly under Central Govt.
(Beijing, Shanghai, Tianjin and Chongqing)
+ “One country, Two systems” Hong Kong
20. China: My Take
• Obvious huge market opportunity, - 1.4 Billion
• Driven by the Priorities of “Five- Year” plan
• Partnering/relationships are “mission critical”
• Cashed up companies and possible investors
• Seeking innovative solutions/Western “know-
how”
• NZ Central in the heart of Shanghai
21. Doing Business in The China Market
Show up and build “quanxi”
Choose your partner wisely
Commit to engage your China team
Design an organizational culture
Focus on the knitting
“One bite at a time”
22. Designing your right business model
Perhaps B2B, MaybB2C, but not C2C
Develop trust/leverage local know how
Customize to local market conditions
Learn the “new” chemistry w/ your clients
Discover how to “work” with government
24. The Multiple R‟s of Biz/Dev
Relationships
- Cultivating the right professional contacts
Reciprocity
- Crafting “quid pro quo” / win-win scenarios
Rationale
- Thinking strategically (“in different boxes”)
Rapport
- Establish trust/do business with global integrity
25. What do you think are
the 1, 2 or 3 things that
Angels and/or VC investors
take into consideration most
when looking at possible
investments in New Zealand
companies or businesses?
26. Suse Reynolds
Chairwoman, NZ Angel Association
The top three things for an overseas investor are not too
dissimilar from what a domestically based angel would look for…
#1 A market disrupting product or service
&
#2 An awesome team to execute.
The third factor is where the difference might be…
#3 An understanding and appreciation of the need to be based
in the target market, i.e. the USA - both from a legal and strategic
perspective.
27. Mike Handcock
Founder, Entrepreneur X-Factor
#1 The team and their backgrounds
#2 The scope of the vision to be global
#3 The current partners and network
28. #1 Diversification. I see angels shifting from a model of 5 - 10
investments a year and wanting to watch over their money to a
model of 15 - 40 investments a year…We don't mind having a few
placed around the world so that we hedge our bets against bad
economies, etc.
#2 The US market is “overheated”. – over-seas is where to find new
business ideas that are emerging as well as new market opportunities.
#3 Can the team successfully scale the company by creating customers
and generating revenue in a foreign market?
Ralph Marx
Founder Acteva -- Serial Entrepreneur,
US Angel Investor
29. #1 An investor‟s capability to scout promising deals and do proper due
diligence locally, thus, minimizing risk both in and from markets that may
not be familiar
#2 - market runway and scalability for entrepreneurial investments in
fields that are not easily copied, particularly in niches where IP
protection is iffy and competition is fierce
#3- ability to exit investments in startups or emerging
companies through local or regional trade sale or IPO within 7 years
Rebecca Fannin
Founder, Silicon Dragon Ventures
Writer, Forbes Magazine
Author, Silicon Dragon&Startup Asia
30. #1 Is the opportunity of sufficient scale
to warrant a VC investment?
#2 Is the legal framework of the country suitable for
VC investments?
#3 Can the company move its HQ to the US, and form a
Delaware corporation to hold the IP and assets?
David Smith
Author, From Zero to IPOFounder, Tynax,
and the Silicon Valley Business School
31. Katherine Barr:
General Partner, Mohr Davidow
Ventures
#1 Does it fit within the purview of my firm? (i.e, have we told
our LPs that we are going to make international investments?)
#2 Am I willing to take on the additional load of being distant
from my investments – travel for board meetings, and/or partner
with someone local who gets the investment landscape (and has
the ability to do great due diligence),
#3 What is the opportunity cost of making this international
Investment versus a local investment, given that I'm trying to
invest in the best of class companies, international or non?
32. Gary Bolles
SF Entrepreneur, Founder, Eparachute,
Executive Producer, Zeitgeist
#1 is who's watching over the investment? - which usually means
needing a local, trusted investor with skin in the game.
#2 Reduction of risk, -- usually means a replicable business model
in a large market or, an entrepreneur with a strong track record of
past exits.
#3 uniqueness + scalability in a proven market, poised to break out,
with partners lined up to speed entrance into overseas markets.
33. Catherine Robinson
Director, Kiwi Landing Pad, San Francisco
#1 People – are they passionate? Do they speak with authority
about their market, can show the potential slice of the market
they are targeting + have a strategy to achieve their projections.
Are they “investable”?
#2 Visas + in market status - If the company is not based
in the market, can they show tangible reasoning and ability
to deal with this?
#3 Momentum and validation – “REAL” numbers that support
product validation and show that an investment will accelerate growth.
37. What NZ Inc. has done/ is doing
and needs to do more…
Establish incubators
Cultivate angels/more early risk capital
Increase global collaboration –partner/license
Import thought leadership
Create beachheads/landing pads
Plan offshore in-market visits
Nurture our ecosystem
38. Reid Hoffman
Founder, Linkedin
Angel Investor, Greylock Partners
Author, The Startup of You
“I invest in the same 3 themes that I‟ve been doing for the
last 9 years, - networks, platforms and marketplaces.”
“Every individual needs to think about themselves as the
entrepreneur of their own life. How do you invest in
yourself? How do you establish good plans and
strategy?”
“How do you take intelligent risk? How do you adapt to
the future? If you do not do this, you are at serious
risk.”
