IT Investing

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IT InvestingIts the end of the world as we
know it and I feel fine

• Fred Wilson
• Managing Partner
• Union Square Ventures
• 915 Broadway, New York, NY
• 212-994-7880
• fred_at_unionsquareventures.com

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Whats Happening?
We Are Here
Source Carlota Perez, Technological Revolutions
and Financial Capital
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The Stack
Services
Applications
Management
Infrastructure
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Whats Changed?
Then Now
Fund Sizes 250mm to 1bn 100mm to 400mm
Markets Large Horizontal Smaller Vertical
Product Focus Technical Problem Business Problem
Technology Critical Success Factor Enabler
Data By-product Core Value
Differentiation Technical Approach Suitability, Effectiveness, Efficiency
Defensibility Intellectual Property Switching Costs, Network Effects
Management Team Engineering Driven Sales, Marketing, Operations Driven
Capital Requirements 30-50M 5-15M
Typical Exit Values 250-500M 50-150M
Valuation Metric Technology Position Revenue/Earnings Multiple
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Technology Enabled Services

• Web Services
• Data Services
• Both delivered together are even better

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What do we look for?

• Technology leverage. Can the service scale
  without incremental headcount and capex?
• Service definition. Does the management team
  understand the problem/solution at a deep level?
• Capital efficiency. Can the company be built for
  a small amount of capital?

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What do we look for?(continued)

• Disruption Markets that are being turned upside
  down because of technology
• Examples
• Marketing Media
• Financial Services
• Telecomm

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Its The Data Stupid!
Code is commodity - Data is proprietary
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Our Investments
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How We Do Business

• Partner driven firm
• Small is better than big
• Early is better than late
• We want to be the first investor
• If you dont want our advice, dont take our money

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How to reach us
www.unionsquareventures.com
fred_at_unionsquareventures.com brad_at_unionsquareventu
res.com
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Or Read My Blog