The document discusses how early stage venture capital investing is changing, with more data-driven techniques being used and the market becoming more transparent and accessible. Key points include venture capital now focusing more on deal selection than sourcing, the use of metrics and analytics to evaluate startups, and standardized terms in new financings with continuous rounds rather than discrete rounds. Early checks should be small and fast to test companies, with potential to double down on investments that survive into subsequent rounds.

1. @paulsingh
#mentorcamp
THE BUSINESS OF
(TECH) INVESTING
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)
PAUL SINGH
@paulsingh・paul@dashboard.io・dashboard.io

2. @paulsingh
#mentorcamp
500 STARTUPS
@paulsingh・paul@dashboard.io・dashboard.io

3. @paulsingh
#mentorcamp

4. @paulsingh
#mentorcamp
A (R)EVOLUTION IN THINKING

5. @paulsingh
#mentorcamp
SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

6. @paulsingh
#mentorcamp
SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

7. @paulsingh
#mentorcamp
TRANSPARENCY IS
SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

8. @paulsingh
#mentorcamp
WALL STREET
BEAT US TO IT

9. @paulsingh
#mentorcamp

10. @paulsingh
#mentorcamp
“
UBS PROPRIETARY
SATELLITE PARKING LOT
FILL RATE ANALYSIS
POINTS TO AN
INTERESTING CADENCE
INTRA-QUARTER AND
POTENTIAL UPSIDE TO
OUR VIEW.

11. @paulsingh
#mentorcamp

12. @paulsingh
#mentorcamp
“
TWICE A WEEK A SMALL
HELICOPTER CIRCLES
OVER CUSHING’S TANK
FARMS ON AN OIL
INDUSTRY SPYING
MISSION.

13. @paulsingh
#mentorcamp
WALL STREET
ISN’T ALONE
THESE TECHNIQUES ALREADY USED TO UNDERWRITE IN-VITRO
FERTILIZATION LENDING, PAYDAY LOANS, SUBPRIME AUTO
LENDING, HOME/PERSONAL/AUTO INSURANCE AND MORE.

14. @paulsingh
#mentorcamp
IT TURNS OUT,
WE CAN DO IT, TOO
SURPRISE!

15. @paulsingh
#mentorcamp
+ “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.

16. @paulsingh
#mentorcamp
WE CAN DO IT, TOO.

17. @paulsingh
#mentorcamp
WE CAN DO IT, TOO.

18. @paulsingh
#mentorcamp
WE’RE DOING IT, TOO.

19. @paulsingh
#mentorcamp

20. @paulsingh
#mentorcamp
“ VENTURE CAPITAL IS
OPEN TO ATTACK BY
DISRUPTIVE NEW
BUSINESS MODELS AND
TECHNOLOGY.
-- NAVAL RAVIKANT (@naval)

21. @paulsingh
#mentorcamp
dashboard.io

22. @paulsingh
#mentorcamp
dashboard.io

23. @paulsingh
#mentorcamp
EARLY STAGE VC
IS CHANGING
HAS CHANGED

24. @paulsingh
#mentorcamp
STATE OF THE ART IN EARLY
STAGE INVESTING IS NOT
VERY SOPHISTICATED

25. @paulsingh
#mentorcamp
UNBUNDLING OF
ADVICE, CONTROL
AND MONEY

26. @paulsingh
#mentorcamp
USED TO BE ABOUT
CAPITAL, DEALFLOW
AND JUDGEMENT
TODAY, IT’S ABOUT ACCESS.

27. @paulsingh
#mentorcamp

28. @paulsingh
#mentorcamp
INCREASINGLY ABOUT
DEAL SELECTION,
NOT DEAL SOURCING.
IT’S 2013, YO.

29. @paulsingh
#mentorcamp
dashboard.io

30. @paulsingh
#mentorcamp
(500) CHECKLIST
Product solves a problem for a specific target customer
Capital-efficient businesses - operational @ <$1M funding
Primarily internet-based distribution - search, social, mobile, local
Simple revenue models - transactions, subscriptions or affiliate
Functional prototype before investment (or previous success)
Small but measurable usage - some customers, early revenue
Small but cross-functional team - engineer, design/UX, marketing

31. @paulsingh
#mentorcamp
(NEW) FINANCINGS
Standardized terms
No fixed amounts, no closings, no leads
Continuous, not discrete rounds
Prices beginning to float
No Board seats at the earliest stage
Herd mentality and oversubscriptions

32. @paulsingh
#mentorcamp
THE BUSINESS OF INVESTING
IS ABOUT CHOOSING THE
LEAST-WORST OPPORTUNITY
NOT TRYING TO PREDICT THE NEXT GOOGLE, FACEBOOK OR LINKEDIN.

33. @paulsingh
#mentorcamp
THE FIRST CHECK SHOULD
BE SMALL AND FAST
DOUBLE DOWN HEAVY IF THE COMPANY SURVIVES INTO THE NEXT ROUND

34. @paulsingh
#mentorcamp
“
BY ITS NATURE, THE
INTERNET UNDERMINES
ANYONE WHOSE STATUS
DEPENDS ON
PRIVILEGED ACCESS TO
INFORMATION.
-- MICHAEL LEWIS

35. @paulsingh
#mentorcamp
THE PRIVATE MARKET IS
BECOMING MORE
ACCESSIBLE.

36. @paulsingh
#mentorcamp
THE PRIVATE MARKET IS
BECOMING MORE
TRANSPARENT.

37. @paulsingh
#mentorcamp
Demo Day Videos ⟹ livestream.com/500startups
Sample Pitch Decks ⟹ slideshare.net/500startups
Venture Capital 101 ⟹ venturehacks.com/archives
Investor Thoughts:
Brad Feld ⟹ feld.com
Fred Wilson ⟹ avc.com
Chris Dixon ⟹ cdixon.org
Mark Suster ⟹ bothsidesofthetable.com
angel.co/valuations and angel.co/salaries

38. @paulsingh
#mentorcamp
dashboard.io

39. @paulsingh
#mentorcamp
YOUR KEY TAKEAWAYS
Focus on Traction.
Learn to Communicate and Inspire.

40. @paulsingh
ALSO...
#mentorcamp
Distribution > Product
Tactics > Strategy
Notability > Credibility
Get on AngelList
Raise 12-18+ months of funding
Learn the basics of VC economics
Don’t confuse due diligence with progress & probability...
Shameless plug: dashboard.io

41. @paulsingh
#mentorcamp
THE BUSINESS OF
(TECH) INVESTING
THE RISE OF THE ANGELS (AND THE ENTREPRENEURS)
LEARN MORE:
bit.ly/dashboard-weekly
@paulsingh・paul@dashboard.io・dashboard.io