Hec inside venture capital part 1 by @chraynaud
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- Venture capital has its origins in the 1940s when Georges Doriot founded AR&D, considered the first VC fund, which had an investment in Digital Equipment Corporation that returned over 5000x. - In the 1950s-60s, entrepreneurs from Harvard Business School like Arthur Rock and Bill Draper went on to establish prominent VC firms and helped fuel innovation in Silicon Valley. - Venture capital has grown to be a large industry concentrated in the US, with IT being the dominant sector and periods of boom and bust driven by economic cycles. Recent trends include the rise of micro VC funds alongside traditional large firms.
Hec inside venture capital part 1 by @chraynaud
- 1. INSIDE VENTURE CAPITAL February 2016 Christophe Raynaud – Managing Partner & Cofounder
- 2. WHO AM I TO SPEAK ? ? HEC graduate (last millenium) ? Entrepreneur… - Chateauonline - Netboussole - Samaris ? …Turned VC (dark side of the force) - Saeed Amidi (Amidzad partner / plug&play tech center) - Paris Business Angels - ISAI CONTACT : r a y n a u d @ i s a i . Fr / @chraynaud
- 3. WHAT WILL I BE TALKING ABOUT ? ? What is Venture Capital History ? ? What is an investment thesis ? What’s ISAI’s ? ? How do VC/ISAI source/screen opportunities ? ? What makes a great founder ?
- 5. WARNING ? NO BULLSHIT RULE ? NOT THE TRUTH, JUST MY OWN EXPERIENCE
- 8. FATHER OF VENTURE CAPITAL ? FRENCH ENGINEER ? HBS MBA 1922 ? FOUNDER OF INSEAD ? FOUNDED AR&D in 1946 - $4M RAISED - FIRST EVER PRIVATE EQUITY / VC FUND > A FAIL FOR MORE THAN 10 YEARS UNTIL…
- 9. A $70K INVESTMENT IN 1958…
- 10. A $70K INVESTMENT IN 1958… …TURNED INTO A $355M RETURN* IN 1970 * INCLUDING A $2M LOAN ON TOP OF THE INITIAL INVESTMENT
- 11. A $70K INVESTMENT IN 1958… …TURNED INTO A $355M RETURN* IN 1970 > 5000X MULTIPLE > 100% IRR * INCLUDING A $2M LOAN ON TOP OF THE INITIAL INVESTMENT
- 13. HBS ENTREPRENEURSHIP ALUMNI ? DRAPER & JOHNSON (DGA) ? PERKINS (KPCB) - Compaq/Sun/AOL/Netscape/Google ? ARTHUR ROCK (VENROCK) - 3COM/APPLE/INTEL - HELPED FAIRCHILD SEMICONDUCTOR RAISE $1,5M > BIRTH OF SILICON VALLEY
- 14. FROM 1957 TRAITOROUS EIGHT TO 1st TRILLION $ STARTUP
- 15. FAIRCHILD SEMICONDUCTOR ALUMNI ? ROBERT NOYCE & GORDON MOORE (INTEL) ? EUGENE KLEINER (KPCB) ? DON VALENTINE (SEQUOIA) - ATARI/ORACLE/CISCO/YAHOO/YOUTUBE > BIRTH OF VENTURE CAPITAL
- 16. RISE OF AN INDUSTRY
- 17. RISE OF AN INDUSTRY
- 18. RISE OF AN INDUSTRY 99000
- 19. … GIVING BIRTH TO MANY WORLD-WIDE Cies
- 20. … GIVING BIRTH TO MANY NEW INDUSTRIES
- 21. … WITH HUGE SOCIAL/ECONOMIC IMPACT ? 21% OF U.S GDP 2.900.000.000.000 $ (Revenue of US Venture backed Cies) ? 80% OF JOBS CREATED 12.1 MILLION JOBS ( AT US Venture Bascked Cies)
- 24. MATURITY PHASE & RECENT TRENDS ? CYCLES, WAVES & BUBBLES ?BEER INDUSTRY ANALOGY - BIG BRANDS / MICRO VC ? ENTREPRENEURS’ FUND ? BASICS STILL TRUE : - US DOMINATED INDUSTRY - HIT DRIVEN INDUSTRY
- 25. SUSTAINABLE VALUE CREATION IN THE US SOURCE QUILVEST VENTURE
- 26. HYPER CONCENTRATION OF PROFITS SOURCE QUILVEST VENTURE
- 27. CYCLES AFFECT RETURNS SOURCE QUILVEST VENTURE
- 28. VERY POOR RETURNS IN FRANCE
- 29. THE US JUGGERNAUT SOURCE QUILVEST VENTURE
- 30. MORE RETURNS, MORE MONEY SOURCE QUILVEST VENTURE
- 31. 0% 20% 40% 60% 80% 100% 4Q03 2Q04 4Q04 2Q05 4Q05 2Q06 4Q06 Other Business, Consumer, Retail IT Healthcare I.T IS CLEARLY THE DOMINANT SECTOR SOURCE NVCA
- 32. # of Active VC Firms 0 200 400 600 800 1000 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 # of Active VC Firms* GROWTH OF ACTIVE VC FIRMS SOURCE NVCA
- 33. TECH BOOM or TECH BUBBLE ? SOURCE UPFRONTVC / MARK SUSTER
- 34. TECH BOOM or TECH BUBBLE ? SOURCE UPFRONTVC / MARK SUSTER
- 35. TECH BOOM or TECH BUBBLE ? SOURCE UPFRONTVC / MARK SUSTER
- 36. TECH BOOM or TECH BUBBLE ? SOURCE UPFRONTVC / MARK SUSTER
- 37. TECH BOOM or TECH BUBBLE ? SOURCE UPFRONTVC / MARK SUSTER
- 38. TECH BOOM or TECH BUBBLE ? SOURCE UPFRONTVC / MARK SUSTER
- 39. Download slides on twitter/chraynaud