Мark phillips "intoduction to silicon valley"
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Introduction to
Silicon ValleyMark Phillips
CTO
Silicon Valley
2
Distance from San Francisco to San Jose is80 km/50 miles
Sand Hill Road
Silicon Valley – Brief History
• 1891 Stanford University founded by a former Governor of California
• 1939 HP founded by Stanford graduates Bill Hewlett and Dave Packard
• 1950’s Stanford University experienced financial difficulties - leased land to technology companies
• 1951 Stanford Industrial Park established – considered Silicon Valley’s starting point
• 1971 Intel created the world’s first microprocessor (the Intel 4004 Chip)
• 1976 Apple Computer creates the first Personal Computer (Apple – 1)
• 1977 Oracle Founded – IPO in 1986
• 1980 Apple Computer goes public - largest public offering since Ford went public in 1956
• 1984 Cisco Founded - IPO in 1990
3
Silicon Valley – Brief History cont.• 1995 Netscape goes public one year after founding – at
US$1.96 billion, the largest IPO in history
• 1995 Yahoo Founded - IPO in 1996
• 1995 eBay Founded - IPO in 1998
• 1998 Google Founded - IPO in 2004
• 2000 Stock Market (NASDAQ) crashed
• 2001 Lohika Founded - Private
• 2003 LinkedIn – IPO in 2011
• 2004 Facebook – IPO expected in May, 2012
• 2006 Twitter Founded - IPO in 2013?
• 2011 HP now a global company with ~350,000 employees and revenues of US$127 billion
4
1995-2000: Venture capital boom and the Internet/dot-com bubble.
IT and BioTech Companies
5
Top Public IT Companies Rank by Revenue (2010)
Largest VC-Funded Biotech Deals in Silicon Valley
(2010)Company VC Funding # of
Investors
Relypsa Inc 70,000,000 6Solazyne, Inc 60,000,000 11
Pacific Biosciences 59,000,000 2Pacific Biosciences 50,000,000 2
Incline Therapeutics 43,000,000 7Pearl Therapeutics 37,500,000 4
Achaogen, Inc 35,360,900 8CardioDx, Inc 34,565,000 4iPierian, Inc 28,470,400 9
VeraCyte, Inc 28,000,000 4
Company Revenue (US$ millions)
Employees (total)
Hewlett Packard 127,158 324,600Apple 76,283 46,000Intel 43,624 82,500
Cisco Systems 42,361 63,465Oracle 34,479 108,800Google 29,321 32,467
Applied Materials 10,386 13,900Synnex 9,179 10,000eBay 9,156 17,700
Sanmina-SCI 6,503 48,000AMD 6,494 11,000Yahoo 6,325 13,700
Symantec 6,048 18,600Aglient 5,750 18,500SanDisk 4,827 3,469NetApp 4,785 11,800
Juniper Networks 4,093 8,772Adobe 3,969 9,117Intuit 3,554 8,700Nvidia 3,543 6,029
Founded in last ~15 years and employ ~75% of Silicon Valley IT workers.
VC Firms – Overview and
Structure• Venture capital (VC) firms typically finance early stage and
growing companies organized as partnerships:
• General Partners
• Limited Partners
• VC firms are very selective and look to fund growing companies that have promising technology and high growth potential
• With their investment, the VC firm owns significant equity in the company. Liquidity (IPO or acquisition) after 3 to 7 years .
• VC firms create funds with a specific investment focus – i.e. a particular industry or stage of growth
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How does VC funding work?
• Seed/Angel -
• Series A (First Round) -
• Series B (Second Round) -
• Series C (Third Round) - Mezzanine financing -
• Series D (Fourth Round) -
• IPO: Initial public offering or Acquisition
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VC funding is typically categorized as ‘venture rounds’ when certain business milestones are met:
$50K to $500K
$3M to $10M
$10M to $100M
$1M to $3M
$10M to $100M
Top Silicon Valley VC’s• The top 10 VC Firms based on probability of high performance and success:
• Total funding managed by each VC from $135 million to $3 billion.
• Kleiner Perkins (KPCB) was founded in 1972 - the first VC firm to set-up in Silicon Valley.
• Andreessen Horowitz was founded in 2009
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Boom and Bust
• Last 15 years, Silicon Valley has experienced a cycle of relative ‘boom and bust’
• Dot-com bubble started mid-90s and culminated in the NASDAQ crash in early 2000.
• Silicon Valley still one of the top technology centers in the world.
• From 2000 onwards, VC financing gradually revived, diversification: pharma, energy, biotech, farming etc.
• Last year economy in Silicon Valley is improved. Still not at 2000 height of ~1 million jobs
Lohika Confidential 9
Boom and Bust cont.
Job Market:
The number of jobs still at 1995 level.
Since 1995 population has grown by ~20% and the number of unemployed (~100,000 during the recession) is the highest since 1990.
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VC investment: $100.1 Billion
VC Investment: $7.3 Billion
VC Investment: $21.8 Billion
VC Investment: $29.1 Billion
VC Investment: $21.2 Billion
Life at a Start-up in Silicon Valley
• High tech start-ups range from two person founders raising seed money to VC-backed firms with several hundred people – all have one thing in common, they are always looking for MONEY!!!
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Chaotic
No Structure
Sleep under your desk
Self-
Starter Sense of
Urgency
FlexiblePassion for the business
Not afraid to
fail
Risk-Taker
Creative
Results Oriented
‘Company-First’ mindset
Smart
Team Player Takes Responsibility
Office may be a garage, basement or extra bedroomLow pay but
equity in
company
Potential for big
pay-off if successful
Long Hours
Sleepless nights
Fun, open, unstructured work environment
Beer and
Pizza
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