The document discusses differing views on the current state of Silicon Valley and venture capital funding. It outlines arguments that Silicon Valley may be coming to an end due to dominance by large tech companies, as well as counter arguments that there are more opportunities now due to more users online, ubiquity of mobile, and new industries being disrupted. While seed funding is up, later stage funding is more difficult to obtain. Los Angeles is emerging as a new startup hub but still lacks local venture funding. The future remains uncertain due to various "wild cards" globally.
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Optimistic vs pessimistic case for entrepreneurs
1. “End of Silicon Valley” vs.
“Morning in VC”
Which Is It?
Mark Suster @msuster
2. Want to Cover Where We’re at in the Cycle ….
Plus the Stuff People Always Ask About
VC Funding Environment
Valuations
Status of Los Angeles
Are There Too Many Fucking Accelerators?
4. David Sacks Mark Suster
watch http://bloom.bg/TLP1IA watch http://bloom.bg/TJZ5h
Just sold Yammer to Microsoft IE vs. Netscape, AOL/TW
for $1.2bn merger, Google monopoly, FB /
Twitter / Instagram
Facebook, Google, Apple,
Microsoft will dominate Edge is smart
Only succeed at edge of forest But Box.net, Dropbox, Yammer
6. David Sacks
silicon valley may be coming to an end .. You have
to find an idea that
(1) Escaped attention of major Internet companies,
which are better run than ever before
(2) Capable of being launched and proven out for
~$5M
(3) Protectable from the onslaught of those big
companies
How many ideas like that are left?
7. Steve Blank
Sobering that most of true disruption:
•Tesla Motors,
•SpaceX,
•Google driverless cars,
•Google Glasses
Created by just 2 people Elon Musk &
Sebastian Thrun
8. Founders Fund
“…shift away from … transformational
technologies & toward more cynical,
incrementalist investments broke venture
capital.”
9. Peter Thiel
There won’t be a “Facebook of mobile” or a
“Google of mobile”
There will be Facebook & Google.
10. Facebook has lost more value in market cap than
Lehman did through the whole financial crisis
Down
•$52 billion
•54%
And Price / Earnings is still 115
28. The VC market has been right-sized – only 98 first invested
$1 million per quarter in 2011
29. The majority of LP money still going to seed & mega
funds
Market Gap
$25-75m $200-300m $500m-$1bn
A, B
A, B C-E
C-E
Seed
Seed Round Round
Round Round
29
30. And the Market Not Sure About LA Venture
Capital
•Ad-Tech & eCommerce (low margins, low multiples)
•Won’t Silicon Valley VCs just fly down and fund best
companies?
•Regional funds never worked
•Marketing muscle of NYC
But perception is starting to change
31. A, B Round Crunch Has Already Begun
Seed
Deals
A, B
Round
VCs
31
32. There’s a Narrative of Haves & Have Nots
Valuation
Meh Insensitive
•“10 million users is
the new 1 million”
•“They haven’t really
reached ‘escape
velocity’”
32
33. And People Privately (and Publicly) Calling Bullshit
YC Vinod Khosla
•Uncapped Notes “I Feel Sad For Y
Combinator
•$12m Pre Money Companies That
Get So Much
•Party Rounds Hype”
33
35. Now that we’re out of the “infrastructure phase” of the Internet,
more big startups being created outside of Silicon Valley
Recent Non-Silicon Valley Successes
Quattro
Quattro
Groupon
Groupon Gilt Groupe
Gilt Groupe
Admeld
Admeld
HDI
HDI Foursquare
Foursquare
LivingSocial Etsy
LivingSocial Etsy
TrueCar
TrueCar KickStarter
KickStarter
Maker Studios
Maker Studios StackExchange
StackExchange
Demand Media
Demand Media
ShoeDazzle
ShoeDazzle
Beachmint
Beachmint
NastyGal
NastyGal
36. We Are Unique … Necessity is the Mother of
All Invention
We Invented the Incubator Model – Idealab
We created monetization on the web
o Overture
o Applied Semantics
o Affiliate Marketing
o Lead Generation
We are poised for the big Internet video boom
o Maker Studios
o Machinima
o Big Frame
o Movie Clips
o Fullscreen