FinTech -InnoTribe Startup Challenge Mike Sigal

500Startups (US)

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Since July 2010

500 Startups is the World’s Most Active Early-Stage Investor

5 OCT 17 3

$390M+ in Capital Committed 1,800+ Portfolio Companies

San Francisco

Silicon Valley

Los Angeles

Mexico City

New YorkMiami

Sao Paulo

London Istanbul

Tel Aviv

Riyadh

Bahrain

BangaloreKualaLumpur

Bangkok

Ho Chi Minh CitySingapore

Tokyo

Taipei

Seoul

People

Countries Where We’ve Invested

Primary Geographies

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5 Unicorns ($1B+ in valuation)* indicates company that has already exited

40+ Centaurs ($100M ~ $999M in valuation)* indicates companies that have already exited

A Selection of Current Portfolio Wins

Companies are a select sampling of investments across 500 Startups funds and at least one 500 Startups fund has invested in one or more rounds of financing for each of these companies. The valuations listed herein are estimated as at June 30, 2017 based on 500 Startups Valuation Policy. These numbers provide a snapshot of estimated valuation as at a particular time and may change. Further detail with regard to financing of companies listed on this slide can be found on Crunchbase. A full list of 500 Startups companies is available upon request.

5 OCT 17 4

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Platform for Transforming Financial Services

Early-Stage VC Fund• Investing globally in enablers & disruptors

across Financial Services

FinTech Accelerator Program• Curriculum, Mentors & Access to drive

growth

Corporate Innovation Services• Advisory, Education & Deal-Flow to drive

CONFIDENTIALCONFIDENTIALSource: https://www.cbinsights.com/blog/fin-tech-funding-growth/

World’s Most Active FinTech Investor since 20122 Unicorns220+ Portfolio Companies 9 Centaurs26 Countries

“Inspire us by giving us a view into what’s going on outside our market.”

AllLife

Ant Financial

Ethic

Finova Financial

Mycroft

Mira

Market Cap: $14B to $400B in 12 months

https://coinmarketcap.com/

ICOs: 234 raised $3.7B to date in 2017

Venture Capital: $127B (KPMG)

IPOs: US$132.5B (E&Y)

Crowdfunding: $739M (Statista)

CoinSchedule

Hedge Funds: 90 new funds in 2017

What’s REALLY going on with Crypto…

Bitcoin made financial services sexy to geeks…like http:// made information sexy in the 90s and VoIP made communications sexy in the 00s.

Digital Transformation of Financial Services has only just begun

Media1 Travel2 Retail3 Telecom4

$368B of lost revenue between 2012& 2018

&

$50B VC into Fintech. 10x in 5 years.

5 OCT 1720https://www.cbinsights.com/research/report/fintech-trends-q2-2017/ (Charts in Appendix 1).

44+ countries are trying to generate an Fintech Innovation Economy

Luxembourg is not leading…yet

“We know disruption is coming. How do we change our skills and mindset to be the disruptor, not the disrupted?

Less than 1% of startups generate significant returns

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Innovation fails

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The big idea: #StartupEmpathy

The startup ecosystem has 80 years of generational expertise achieving outsized returns from innovation despite low success rates.

Applying this expertise to corporate innovation to drive operational excellence, talent development &predictable results.

Don’t learn to Fail Fast. Learn to EXPERIMENT CHEAP

Startups (and innovation projects) are collections of risks

“A startup is an organization formed to search for a repeatable and scalable business model”

- Steve Blank

Complete Team

StableTeam Large TAM

GreatProduct P-M Fit Difficult to

copy

Customer willpay

Manyusers

Viable unit economics

Startups win funding as they eliminate key risks

Angel Pre-Seed Seed Post-Seed Series A/B Growth Exit / IPO

Each is a discrete stage & circumstance for the startup and VCRisk decreases with each stage (in theory) Returns & opportunity are reduced at each successive stageAvailability of business data is higher at each successive stage

Startup stages from Startup Commons 3.0

Risks are eliminated in a predictable sequence

Angel Pre-Seed Seed Post-Seed Series A/B Exit / IPO

User Feedback

Development Velocity

Sign-ups

Activations

DAU/MAU

NPS

RevenueRetention/Churn

MRR/ARR

CAC

CLTV

Activations Users engaged

DAU/MAU Daily/Monthly Active Users

Conversion % of users that pay

Retention/Churn

% of users retained/lost

Team

Users

MRR/ARR Monthly/annually recurring revenue

CAC Customer acquisition cost

CLTV Customer lifetime value

For more metrics: Andreesen Horowitz (a16z): 16 Startup Metricshttp://a16z.com/2015/08/21/16-metrics/

Profitability

Stage

To be great, hack VALUE before GROWTH

Value Seeking

Unlock a new product value proposition with

the potential to delight a large number of

attractive customers

Growth Seeking

Accumulate attractive customers with

increasing speed and predictability

(Capital Efficient) Truth SeekingAnn Miura-Ko, Partner, Floodgate Ventures

“To the extent that we can control the future,

we do not need to predict it.”

EffectualCausal

“To the extent that we can predict the future,

we can control it.”

Learn to think like entrepreneurs, not managers

Causal Reasoning: Managerial Thinking

Distinguishing characteristic: Selecting between given means to achieve a pre-determined goal

Given Goal

M1

M2

M3

M4

M5

Effectual Reasoning: Entrepreneurial Thinking

Distinguishing characteristic: Imagining possible new ends using a given set of means

E1

E2

E3

E4

E5

Given MeansM1 M2 M3

M4 M5

Creative Causal: Gateway to entrepreneurial thinking

Distinguishing characteristic: Generating new means to achieve pre-determined goals

Given Goal

M1

…

M5

M6

M7

Learn to frame challenges properly

Objective

As mission commander,

I want to lower CO2 levels

So that our guys can avoid asphyxiation

Challenge

As mission commander,

I want to find a way to connect the square-shaped and circular openings in the ducting

So that our guys can avoid asphyxiation (e.g. rapidly)

Experiment

As mission commander

I want to find a way to:• Make X• Fit into the hole for Y• Using nothing but Z

So that our guys can avoid asphyxiation (e.g. rapidly)

“How do we recapture all the resources we’re spending on compliance so we can invest in innovation?”

RegTech Market Context

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4.96B in RegTech

COCCOCOCCOCCOCOCCCCOOOOCOOOOOOOOOCCCCCCCCCOCOCCOCOCOCOCOOOOOOCOCOCOCOCCCCCOOCOOOOOOCOCOOOOOCOCOCCOOOOOCOCOCOOOCOOOCCCOCOOOCCCCOOOOOOCOCCCOOOOOOCOCCOOCOOOOCOCCOOOCOOOOOOOOCOCCCOCCCCOOOOOOCCCCCOCCOCOOOOCOOCCCCCCCCOCOOOOCOOCCCCCOOCCCCOCCCCCCOOOOCOONFNNNNNNNNNNFNNNNNNNNFNFNFFFFFFFFFFFFFFNFNNNNNNNNNNNNNNNNNNFNFNFFFFNFFFFFFFNNNFNNNFNFNFNFNNFNFNFNFNNNNNFFFNFFFFNFFNFFNFNFFNNNFNFNNFNFNNFNNNFFFFNFNFNNNFNFFFFNFFFFFFNNNNNNNFFFNFFFFFFFNNNNNNNNNNNNFFFFFFFFFFNNNNNNFFFFFFFFNFFNNNNNNNNNNFFFFFFFNNNNNNNNNNNNNFFFFFFFNNNNNNFNNNFFFFFFNFFFFNNNFFNFFFNNFFNFFFFFNFFNFFFIDIDIIIDDDDDDDDDDDDDDDDDDDDIIIDDDDDDDDDDDDDDDDDDDIDIIIDDDDDDDDDDDDIDDDDDIDIIIIDDDDIDDDDDDIDDDDIDIIIDDDDIDDDDDIDDIIDIIDDDDDDDIDIDIDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDDIDDDDDDDDDDIDDDDIIIIDDDDDDDIIIDDDIIIDDDIIDDDDDDENENEEENENENENENEEEENEENENENENENENENNNNNNNNENNNNNNNENEEEENEENEEENENNNNNNNNNNNNNNENNEEENENEEENENNNNENENENENNNNNENENEENENENNNNNENENNENNENNENNENENEEEEENENNENNNNENENEEENNNENNNNNENNNENEENENNENNNNNNNNNNNENENENENEEEENENNENENNNNNEENENNENNENENNNNNNENEEENEEENNNNENNNNEENNNNEENEEENNNNNNNNEENNNNNEEEENNNNNNNEEEEENNNNNNNENEENNNNEEENEENNNEEEEEENNNNNNEEEEEEENNNEEEEENEENNNNEEEEENNNTITTITITTTTTITITITTTITITITITITTITTTIIIITTTTTTTTITTITIIITITTTTTTITITITITITITTTTTTTTITITIITITTTITTTTTTTTTITITITTTTTTIITTTTIIITTTITTTTTITTTTTTTTTTTTTITTTTTITTTTTTTITTTTTTTTTTTTTTTTTITTTTTTTTTIITTIITTTITIIIALAAAAAAAALALAALAAALALALAALALALLLALALALLALLAAAAAAAAAALALALALLLLLLLALAALALALALAAAAAALALALLLALLLAALALAAAAAALLLLLLLLLALAAAALAALALAALALLALLLLLLLALLAAAAAAALAAAAAAAALLLLLAAAAAAAAALAAAAAAALLLLALAAAAAAAALLLLLALALAAAALLLLLLLAAAAAAAALLLLAAAAAAALLAAAAAALAAALLALAAALLLALLLLLLLLLLLLALAAAAALLAAAAAALLLLLAAAAAAAAAAALLLLLLLLLLLALLLLLLLLLLL

RegTech Media Mentions

Think like an entrepreneur…

E1

E2

E3

E4

E5

Given MeansM1 M2 M3

M4 M5

…about RegTech in Luxembourg

Knowledge of RegTech is explodingCustomers• 3882 Funds• 320 Insurance/Reinsurance orgs• 143 Banks

Funding“Luxembourg Model”#StartupEmpathy

Given MeansM1 M2 M3

M4 M5

The Luxembourg RegTech Challenge

As The Luxembourg Community

We want to- reduce the cost of compliance for funds globally- become the domicile of choice for RegTech startups

So that we can participate in the hyper-growth of Financial Service Digital Transformation

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Thank you.Mike SigalPartner, 500 Fintech / Co-Founder, Upside Partners