Mark Radcliffe gave a presentation on global innovation and trends in Silicon Valley. He discussed how barriers to entry for startups have lowered significantly due to factors like cloud computing and open source software. Venture capital investment reached record highs in 2014, with over $50 billion invested across various stages from seed to late. Major technology trends include increased mobile usage, cloud adoption, and the rise of interconnected devices and the Internet of Things. Software innovations are disrupting multiple industries. Overall, the presentation outlined how innovation is accelerating globally and the startup funding ecosystem has become more complex, while Silicon Valley maintains its leadership position.

1. Silicon Valley in Transition
Global Innovation Summit + Week
February 19, 2015
Mark Radcliffe, DLA Piper, Silicon Valley Office
Mark.radcliffe@dlapiper.com, 650-833-2266

2. Global Platform
 Largest law firm in the
world with 4,200 lawyers in
31 countries and 77 offices
throughout Asia, Europe,
the Middle East and the US
 Ranked #1 among the
world’s leading global law
firms
 More than 145 DLA Piper
lawyers in IP transactions
 1st in Venture Capital and
Private Equity deal volume
 More than 550 DLA Piper
lawyers ranked as leaders
in their fields
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3. Mark Radcliffe
 Background
 B.S. Chemistry, magnum cum laude, University of Michigan
 Harvard Law School (l1996, Distinguished Alumni)
 Practicing in Silicon Valley for over 30 years
 Corporate securities and intellectual property licensing
 US Private Sector Co-Chair (US Department of State/METI),
US-Japan Innovation and Entrepreneurship Council
 Chair, Corporate Venture Group
 Chair, International Startup Group
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4. Disruptive Change
Symbian market share: 60% (2007) to >10% (2011)
We too, are standing on a “burning platform,” and we must decide how we are
going to change our behaviour.
Nokia CEO Stephen Elop (2011)
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5. Silicon Valley in Transition
 Lower barrier to entry for new startups: 90% decrease for IT:
 Lisa Gansky of Ofoto: she raised $60m in 90s but could do the same
company today for $6m
 Factors
 Cloud: no hardware/”rent” software
 Open source software
 Increase in funding sources:
 Individual angels/angel groups/angel syndicates/super angels
 Micro-VC
 Corporations (more than 1,000 are investing)
 Hedge funds/mutual funds
 Decrease in financial venture capital funds from 1225 (2006) to 425 (with
many fewer venture capital funds actively investing)
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6. Major Technology Trends
 Speed of innovation increasing: adapt or die
 Sun
 Nokia
 Open source/collaboration
 Linux (operating system)
 OpenStack Foundation (cloud)
 IT Changes
 Cloud
 Mobile
 Increase in data
 Rise of “interconnected world” (Internet of Things)
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7. “Software is eating the world.”
Marc Andreessen - 2012
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8. 2014 Venture Capital Market
8
$6.1
$5.7
$6.5
$6.2
$6.8
$8.0
$6.8
$6.8
$10.7
$9.7
$10.4
$9.1
$9.2
$10.4
$9.1
$8.6
$9.2
$9.5
$10.1
$10.5
$12.9
$17.2
$13.3
$15.6
873
795
854
896
1,006
1,053
980
1,039
1,315
1,240 1,276
1,229
1,570 1,550
1,444
1,412
1,592
1,564 1,533
1,435
1,416 1,421
1,340
983
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2009 2010 2011 2012 2013 2014
Capital Invested ($B) # of Deals Closed Seed/Angel Early Stage Late Stage

9. 2014 Deal by Stage
9
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
201220132014
Seed/Angel Early Stage Late Stage

10. 2014 Seed/Angel Stage
10
$72
$50
$73
$156
$143
$184
$152
$211
$217
$341
$306
$274
$343
$303
$414
$349
$269
$332
$323
$296
139
102
125
132
217
203
223
234
362
375
370
332
480
391
420
300
329 270
287
180
0
50
100
150
200
250
300
350
400
450
500
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2010 2011 2012 2013 2014
Capital Invested ($M) # of Deals Closed

11. 2014 Early Stage
11
$2.9
$2.6
$2.9
$2.3
$3.3
$2.9
$3.5
$3.7
$3.0
$3.8
$3.0
$2.9
$3.1
$3.7
$3.5
$4.1
$4.5
$5.2
$4.8
$4.6
497
518
485
490
622
554
589
590
662
674
622 624 609
689
632
645
601
625
575
460
0
100
200
300
400
500
600
700
800
$0
$1
$2
$3
$4
$5
$6
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2010 2011 2012 2013 2014
Capital Invested ($B) # of Deals Closed

12. Angel Group Update: Halo Report Q2 2014
Highlights
 Round size drops in angel-only
deals, while syndicated round
size increases
 Median pre-money valuation
continues to rise, jumping to
$3.0M from $2.7M in Q1 2014
Texas breaks into top three
most active regions; Mid-
Atlantic leads in dollars
invested
 Median healthcare round size
jumps by $1M, while median
Internet round size falls by $1M
Most Active Angel Groups
Total Deals Q2 2014 (Alpha
Order)
 Alliance of Angels
 Central Texas Angel Network
 Desert Angels
 Golden Seeds
 Houston Angel Network
 Launchpad Venture Group
 Maine Angels
 Tech Coast Angels
12

13. Median/Mean Angel Round Size Falls in
Q2 2014
13

14. Angels Co-Investing With Non-Angels
Leads to an Increase in Median/Mean Size
14

15. Median Pre-Money Valuation Continues to Rise
Quarter over Quarter Pre-Money Valuation Up
15

16. Q2 2014 Share of Angel Group Deals by Region
16

17. Texas Breaks Top 3 With the Mid-Atlantic
Region Close Behind
17

18. Q2 2014 Share of Angel Group Dollars
by Region
18

19. Healthcare & Internet Remain Stable While
Mobile Down Slightly
19

20. Corporate Venturing is maturing as an
industry
20

21. Investments are up 70% over 2013
21

22. Dollars have doubled over 2013
(Aggregate for deals with CVC participation)
22

23. 2014 Investments
Seed and Series A – D Rounds
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24. Summary
 IT critical in more industries
 Cars: mobile computers
 Smart Phones: displacing PCs and now tablets
 Disruptive technology changes in IT
 Innovation is accelerating in multiple industries
 Startups emerging across the globe
 Funding ecosystem becoming more complex
 Silicon Valley retains its primary position
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