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Startup & Venture Lessons

Duke Presentation at Dogpatch Labs

Jay Jamison

Partner, BlueRun Ventures

jjamison@brv.com | @jay_jamison | jayjamison.com

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Agenda

Introduction

Early Stage Valuation Methods

Exiting

VC: Venture or Vulture Capital?

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Introduction

• Duke, BA, English, 1992

• Emory Law School, 1995-96

• MBA, Wharton,1998

• Microsoft, 1998-2007

• Founder, Moonshoot, 2007-10

• Partner, BlueRun Ventures, 2010-Present

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About BlueRun Ventures

• Over $1.0B under management

• Investing out of Fund IV ($240M)

• Focus: Mobile & consumer internet

• Seed & Series A

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What is my job?

• Unearth great dealsFind

• Convince NewCo to take our $Close

• Help NewCo reach full potentialAssist

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Early Stage Valuations

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It’s a Golden Age for Entrepreneurs….

Cheaper than ever to start a company.

Better resources

• Incubators: Y-Combinator, 500Startups, …

• Resources: Startup Digest, Lean Startup, TC, VB

Technology is easier to learn, access, &c.

• Codecademy

• RoR

• AWS Driving valuations up

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… And Investors Understand This.

I see lots of great companies that are:

• Capital efficient

• High velocity in coding and releasing

• Product in market with traction

• Clear customer insight on what works

• Battle-tested founding teams

• Clear, concrete ask on what $$$ they need

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Implication

While we’re in a Golden Age for Entrepreneurs, it is raising the bar

for most very early stage companies…

You need to prove more on very little money, because so many other

start-ups are already doing so.

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Early Stage Valuations

Plain vanilla Series A

• VC: 20-30%

• Option pool: 10-20%

• Founders & Angels keep rest

Items we watch

• Founder incentive must be very high

• Maintaining a clean cap table is important

Founders & Angels

60%ESOP15%

VC25%

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Exiting

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Exits

Stuff beyond your control

• The market

• The corporate politics on the other side

Stuff in your control

• Which founding teams you back

• Staying focused on execution until deal is signed

• Attracting alternative bidders

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VC: Venture or Vulture?

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Venture

• Unique and amazing form of capital

• Helped scale companies that have had massive impact

• And will continue to have an important role

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But, VC is not…

Summer Camp

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Our Aspiration

Adapted from Glenn Kelman, CEO Redfin, describing working w/ Pierre Lamond at his Plumtree.

Then Pierre Lamond, the Sequoia partner on the deal, began working out of our office, acting as the virtual CEO.  Pierre made a point of being there the day one of his other companies went public. We looked at a news photo of all the smiling people, who seemed to be living in a gated community, on a planet I would never visit. Then Pierre said “that company was once even more screwed up than you are.”

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Recommended actions

Investigate and reference check any investor

• Past successes

• Past failures

Assess the friendliness of terms

• This tells you a lot about alignment w/ founders

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Thanks & Q&A