eBusiness Craze and Trends
Alphabet Soup and Building a Business in the eMillennium
By Jennifer Fonstad
[email protected]
www.drapervc.com
Draper Fisher Jurvetson
Leading the VC flock to the internet waters…
- 1st VC investment in the internet in 1994
- Over 80 internet investments-to-date
- $1 billion under management
- 6 funds (I-VI)
- Network Affiliates: LA, DC, NY, UT, OR, TX
- Tremendous success
- Public: GOTO, Netzero, Preview Travel, Interwoven, Tumbleweed, WIT, Kana
- Sold: Hotmail/Microsoft, 411/Yahoo, C2B/Inktomi, Medior/AOL, Abuzz/NYT
Alphabet Soup
DSP IP C2C NSO M&A ISO VML ASP VC CGI B2C B2B WAP IPO XML GAAP
- Too many Acronyms
- What does it all mean?
Peering into The Soup
$7.7 billion into start-ups Q2 99
1000 start-ups funded in 3 months
The Other End of the Alphabet
200 IPOs scheduled in October
(that's 20 per day)
More IPOs in the first half of 99 than all of 95, 96, and 98 combined
Don't forget about M&A: CGMI, Amazon, Cisco, Intel
Building the Business
Whose the customer?
Goto.com - two customers
- Why are they going to buy?
Hotmail - new features, new price
- What's the business model?
NetZero - making the numbers work
- What are the barriers to entry
?
Fogdog
(Hint: It's all about the team) Kana
Lifecycle of a VC backed company
It's all about hitting key business milestones
(See Graph in Powerpoint Presentation)
Funding in the eMillennium
Self or Friends & Family (F&F)
- Risk: you may lose their (your) money
- Risk: may overprice the deal for next round
Angels
- Risk: limited network/time/focus
- Risk: may overprice the deal
VCs: lots of flavors - make sure you get value-add
- Risk: expensive money: is opportunity big enough
- Risk: quality matters
Banks: yes, they do lend to start-ups
Strategic Investors….