1. An Insider View On The US Funding Landscape and hacking the Silicon Valley fund-raising process Yaw Shin Yeo 18 February 2014

2. Quick Background Senior investment manager with Infocomm Investments (IIPL) Relocated to the Valley in late 2011 to launch and oversee all of IIPLs activities in the US. Responsible for IIPLs US investments. Previously led the MOF technology team that oversee the central government infrastructure and IT operations 3. 2013 : $29.2 Billion in 3,354 Deals Stable dollar ow; more seed deals"2013 marked the fifth straight year of record deal levels behind the continued surge in seed venture capital deals. Venture capital funding increased in each successive quarter of 2013, hitting a six-quarter high in Q413.5 4. 2013 : M&As decreased by 5% while IPOs went up"2013 was an active one for U.S. venture capital-backed IPOs, topping 2012s IPO tally by 55%. Healthcare firms get credit for driving the IPO boom. There was no upward momentum in venture-backed M&A, which dropped by 5% on a year-over-year basis.Note: Venture-backed IPOs in this report covers public offerings of companies headquartered in the U.S. 2013 saw 81 total IPOs with at least one U.S. VC investor that trade on U.S. exchanges.25 5. New York Startup Scene is Rising with ~50% increased yoy funding"New York saw its venture capital funding amount accelerate nearly 50% on a year-over-year basis boosted by notable rounds to startups including Quirky, AppNexus and Fab. California and Mass. funding levels in 2013 remained mostly consistent from a year ago.13 6. Pre-Money Valuation Going Up"Source : PitchBook 7. Personal Observations" General investor fatigue in some Consumer sectors? Social. E-Commerce. Travel. Music. TV. Gaming. Pendulum is swinging to Enterprise and hardware. " SaaS. Online-to-Ofine. EdTech. Security. Wearables. Virtual Reality. Connected Devices. Robotics. Big Data. Internet of Things. Drones. Bitcoin. Marketplaces. Bifurcation of venture : micro-VCs and billion dollar funds.VCs are out fund-raising. Fresh capital inows?Corporate venturing is returning.Wall Street joining the fray. 8. This is all very interesting, but how do I raise the money from VCs?Photo Credits : Andrew Magill 9. Do you really need venture money?" Many sources of capital : BootstrapKeeping a day jobFriends and FamilyCredit CardsCrowdfundingAngelsVenture Capitalists Bloomberg. Broadcom. SAS Institute. Viber. 10. Venture Economics 101" The VCs promise Raise money from LPs (pension, endowment, SWFs) to invest in startups (of a specic stage and geography) and generate 15-20% IRR over a 10-year cycle. $300M fund is expected to return $1.2 Billion at 15% IRR The typical VC batting average: 6 breakeven or failed 3 minor exits returning 2-3x 1 breakout success Go Big or Go Home mentality 11. So, what does this mean for me?" With money comes obligations. Two reasons for VC money (Chris Dixon): Going for the billion dollar opportunity Raising money is absolutely necessary or will signicantly accelerate growth VC is a local business most of them are not allowed to invest in international startups unless the founders are prepared to re-locate. There are a few exceptions. Look for Southeast Asia track record or pan-Asia (not China) investment strategy. 12. Are you sure you still want to raise money from US VCs? 13. Finding the Investors" Hustle. Hustle. Hustle. Work your network. Dont cold-email. Referral sources : Lawyers? Recruiters? VCs? Portfolios? Entrepreneurs? Corporate executives? Dont take VC intros from VCs who rejected you. Never tell the VCs who else you are talking to. Find the right partner. That matters more than the rm. Be specic when you ask for referrals. Do your homework. Make a list. Have some practice meetings at the start. 14. Evaluating the VCs" Investment appetiteFund sizeEarly stage? Growth stage?BandwidthSector preferenceReputation of the rm and individualStrategic value-addMatching expectations Personal chemistry Always reference check. Dont go in blind! 15. Getting the VC to Commit" Social Proof. Validation. Momentum. Scarcity. Urgency. Line meetings up within a short timeframe. Show commitments if you have them in the bag. Validation. If there are people who the VCs know and are willing to vouch for you, mention them. Create buzz. Have your existing investors and advisers talk you up. Ride on your PR. Stand out from the crowd. Having an inside champion is powerful. Find a new partner or hungry principal thats looking to close his rst deal.Goal : Get to that rst termsheet. 16. One last slide" Think of it as a sales process. Sell the opportunity.Dont just pitch the idea. Pitch yourself.Be thick skin. Get used to Nos. Remember the odds. Its not the batting average that matters. You just need one homerun. Read your legal docs. Dont outsource to your lawyer. Its not done till the money is in the bank. Dont raise party rounds. Fewer investors (3-5) better than too many (15-20). 17. Good Luck! /> Yaw Shin Yeo yaw at infocomminvestments.com www.linkedin.com/in/yawshin/