up global brasil - global trends in startup ecosystem
DESCRIPTION
Presentation to SEED http://seed.mg.gov.br/en/, Demo Day. March 19, 2014TRANSCRIPT
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Global Trends in Startup Ecosystem
March 2014
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Agenda
• What is a Thriving Community?
• Baseline Market Factors
• Trends
• In Early Stage Investing
• In Markets
• Q&A
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About Dave
• Serial Entrepreneur - Five Startups, 2 sold, 1 closed, 2 Active.
• Board Member - Mid Market Companies, six exits
• Former VC - $250M Intl Fund
• VP Programs & People at UP Global
• Husband & Dad @DaveParkerSEA www.UP.co
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About UP Global
• Founded Merger of Startup Weekend and Startup America
• Non Profit team of 50 people in Sao Paulo, Mexico City, Delhi, London and HQ in Seattle
• Committed to the right programming at the right time to increase your odds of success and speed your process
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2013 Facts815
102
467
74k
3,50
EVENTS
COUNTRIES
CITIES
ATTENDEES
ORGANIZERS
815
102
467
47k
3.5k
2016 CITY GOAL1000
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What is a Thriving Community?
• Startup Density & Community Driven
• <1 Year Old Companies
• 1-5 Year Old
• Tech and Information and Communications Technology (ICT)
• Community Metrics will predict Macro Economic Metrics - but over time
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Thriving = Startup Density
• For cities over 1MM population (greater metropolitan area), good “thriving” startup density is ~225 startups (1-49 employees) per 100,000 people.
• For cities btw 500k - 1MM, ~175 startups (1-49 employees) per 100,000
• For cities btw 250k - 500k, ~150 startups per 100,000 Prior to 2013 there was no widespread data on startups, all publications are within the last year. US City data only as provided by Kauffman & Konscal
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Linking Young Firms & Job Creation
• Young High Tech and ICT businesses, as opposed to small business play an outsized roll in job creation
• Differentiating growth oriented startups from other young and/or small business is critical
• High tech start lean - but grow so rapidly that it offsets job losses from early stage business failures
• Majority of growth is <1 year and 1-5 year old companies
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Watching Your Numbers
• Census Data for Self Employment ≠ Entrepreneurship
• # of Incorporations vs. High Growth
• Employment #s
• Investment/Exits
• Tax Rev
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• Startups are mobile - they will find a way, even if it means moving, once they move, they aren’t likely to return
• Policies may be Causation or Correlation
• Factors in our control
• Factors out of our control
Challenges to Thriving Communities
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How Corporations Help
• Engage with new companies - yes there is a risk, but they could provide innovation
• Pay <15 days
• Be a subject matter expert
• Be a connector
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You don’t get to start as Silicon Valley today
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unless you started in 1971
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Timeframe to Thriving Community?
• Average time from Venture Investment to Exit is 4.7-7 Years (Venture Source)
• Angel Investment to Exit is 7 Years (Angel Capital Association)
• All Major Venture funds have a 10 Year LLP agreement
Regardless of the data - it’s going to take a while
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Is the Investment Worth It?
• Top 10 Metro (MSA) US Areas in 1990 were still in the top 20 in 2010
• Once you built it, you should be able to keep it
• Successful entrepreneurs re-invest in the market
• “Paypal Mafia”
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Factors in Our Control
• Creating Startup Density
• Encouraging programming lead by the community, e.g. Meetup, Startup Weekend, Startup Weekend NEXT,
• Accelerators - 165 worldwide, massive growth
• Angel investments
• Standard term sheets, open source legal documents
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Factors Out of Our Control
• Culture - need to embrace failure as part of success
• Ex: not viewing failure as an outcast - UK
• Legal - Incorporation laws that don’t punish risk takers
• Ex: “piercing the corporate veil” - Singapore
• Tax - that encourage investor to get of the sidelines
• Ex: Convertible Debt - Hungary
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Event Density
Low
High
Boulder
SJCNYC
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Common Y Axis Factors1. Leadership 2. Engagement & Diversity 3. Talent 4. Network Density 5. Entrepreneur Culture 6. Mentors & Coaches 7. Capital 8. Corporate Engagement 9. Support Services 10. Government Support
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Trends in Early Stage Investment
• Growth of Accelerators - vs. Incubators
• 165+ WW that provide investment
• Women Entrepreneurs
• Early Investment
• Crowd Funding
• Simple Term Sheets/docs
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Trends in Markets
• Knock offs - with large markets - Easy Taxi
• Consumerization of IT - DropBox
• Break up of Marketplaces - Craigslist to Gazelle
• Open Source - Github
• Wearables - Fitbit
• Over the Horizon - Big data (for Startups), Internet of things
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Note to Startups!
• Office Hours tomorrow!
• Please read, http://dkparker.com/2013/02/19/buy-you-coffee/
• Come prepared
• Know what your next biggest challenge is before tomorrow
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What if?
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Every miss cost $1M?
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What if we changed the game?
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Join us at StartupWeekend Favela - http://riofavela.startupweekend.org/
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Thanks!
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Sources
• Brad Feld, Startup Communities • THE MOST ENTREPRENEURIAL METROPOLITAN AREA? Jared Konczal,Senior Analyst, Kauffman Foundation • PATH-DEPENDENT STARTUP HUBS - Dane Stangler, Ewing Marion Kauffman Foundation • Tech Starts: High-Technology Business Formation and Job Creation in the United States - Ian Hathaway, Kauffman
Foundation • What makes city entrepreneurial - HBS
!
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Section Title 2 Section Title 1