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Alex Osadzinski at New Connect Club - www.ncclub.pl
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Alex Osadzinski+1 (650) 854-9500
alex@trinityventures.com
Venture Capital(Almost) everything you wanted to know
but were afraid to ask
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Agenda
Who I amHow (California) venture capital worksWhat VCs look forWhat VCs bring to the tableWhy startups are funUS/Europe differences
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Me
6 venture funded startups$234B total outcomes
1 large company1 turnaroundCEO, COO, GM, VP Eng/Sales/Mktg7 years at Trinity
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Trinity Ventures
Founded 1986$1.3B under managementInvesting $300M Trinity IX fund11 investment professionalsEarly stage IT technology investing
….and…
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Size
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How venture capital works
VentureFund
LimitedPartners
GeneralPartners
PortfolioCompanies
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Valley of deathValuation
Time
EnthusiasmOptimism
Reality
Results
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Outcome
VentureFund
LimitedPartners
GeneralPartners
PortfolioCompanies
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Measurements
IRR2x return in 1 year is 100%But only a 2x
Absolute return3-5x in 3-5 years5x in 4 years is 50% IRRNeed to have a thesis for the 10x
LPs want absolute return and IRR
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What VCs look for
Disruptive technologyDisruptive business modelsFast executionCapital efficient executionExplosive growthAwesome entrepreneurs and team builders
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What VCs look for in a company
TeamTechnologyTraction
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Compare
Entrepreneurs – what I look for
Trust and respectTrack recordConfidence, skill, poiseCollaborative natureRealism (especially in financials)Desire to take on venture capitalWheelbarrow test
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Technology
Trade secret or patented IPSecret sauce – must be hard to replicateNot a one-trick ponyRoadmapLeverages the pastOften times evolutionary
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Traction
Big marketsAll markets seem to be $1B
Large addressable market – the real TAMBowling pin analogy is trueCrossing the chasm is true
Deal flow
At Trinity3000 plans/referrals -> 500 1st meetings -> 50 actively “worked” -> 10 investments
Deals come fromVCsPortfolioPersonal/firm networksTrusted sources
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Bay Area stats
400,000 people in technology20,000 entrepreneurs
India, China, France, UK, …
6,000 business plans3,000 startups200 funded120 first-time CEOs
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After the investment
Active board participationFollow-on roundsTeam buildingM&AIPO
What do I do all day?
Leave home 7:30am, get to office 7:42am!300-400 emails5-8 company meetings, 1 hour eachBoard workConferences, beauty contests, panelsLeave work 7pm, get home 7:12pm, or……dinner, usually with a candidate
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Where do I do all this?
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Silicon Valley vs London
Better weather Lower taxesEverything is (much) cheaper……..except insane house pricingVibrant tech business environmentVery focused, driven, intense, freneticSomewhat isolated from reality
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Europe vs US (VC) business
EuropeLarge fragmented marketSophisticationIntrospection and doubtDiffuse infrastructureCultural biasesGovernment regulationNo virtuous circle yet
USHuge marketNaiveteSupreme confidenceTight infrastructureCultural biasesGovernment regulationVirtuous circle
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Why startups are fun
SpeedFocusAgilitySizeGrowthPersonal responsibility
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Venture capital is…
Simple in conceptComplex in executionGetting tougher all the timePlays a unique role in businessIs unique in Silicon Valley…..and…..Is the best job in the world
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