Scaling Venture Capital How we work with VC’s and startups

@MikeReiner

A bit personal: Story about scaling A little history: Cloud and VC’s How we work with VC’s and Startups

A story about scaling Can you scale a country?

Virtual Citizen?

A story about the cloud and VC’s Why do investors care?

“Amazon changed the VC industry. This is mind boggling. That online book company. Not … or anybody else. Amazon. 100% of the credit.”

Mark Suster, serial entrepreneur and MD at GRP Partners

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1995          1996          1997          1998          1999          2000          2001          2002          2003          2004          2005          2006          2007          2008          2009          2010          2011  

1995 – .com Technology Startups require physical hardware and

proprietary software to build their business

Typical Series A

Spent on…

Innovation

5-10M • $2.5: marketing, sales, etc.

• $2.5M on infrastructure

• Not a lot, since experimentation was costly

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Typical Series A

Spent on…

Innovation

1995          1996          1997          1998          1999          2000          2001          2002          2003          2004          2005          2006          2007          2008          2009          2010          2011  

2000: Rise of Open Source Open source software drove technology costs down by 90%,

which spurred innovation in technology

3-5M • Less on Software– LAMP

• More on development

• Still on infrastructure

• A lot more, as experimentation is less costly now

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Typical Series A

Spent on…

Innovation

1995          1996          1997          1998          1999          2000          2001          2002          2003          2004          2005          2006          2007          2008          2009          2010          2011  

2006: Enter the Cloud Pioneered by Amazon Web Services - drove total

operating costs down significantly

500K-3M

• Staff – the battle for talent

• Customer Acquisition

• Explosion in experimentation, innovation, and Startups

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1995          1996          1997          1998          1999          2000          2001          2002          2003          2004          2005          2006          2007          2008          2009          2010          2011  

2007: Micro VC / Seed Cloud led to explosion in the number of Startups and the

emerging of “micro VCs”

Angels

Incubators

VC’s

Angels unite in ‘Super Angels’ for Seed investments thru VC-like setup

Boom in incubator programs, with

micro investments, mentoring, etc.

Venture funds that back early-stage

startups with <$1M

…rapid pace of innovation

Why do VC’s care? More deals

Shorter time to scale

Faster time to revenue

Lower ‘burn rate’

Higher valuation at exit

Portfolio Package

How we work with VC’s and startups How can we help?

How can our BD team help VC’s 1 - Scale and reduce costs 2 - Deal flow and due diligence 3 - Exits and portfolio review

How can our BD team help startups 1 – Connections to top VC’s EMEA 2 – Get connected within Amazon 3 – Feedback on fundraising and architecture

Not biased: “We win when you win – and only when you win”

Understanding the VC – 3 tips 1 – Approach before you need money 2 – Fundraising takes time 3 – Manage expectations

I saw the angel in the stone and carved until I set him free. Michelangelo

Thank You Reach out and let us help @MikeReiner reinermr@amazon.com