@dragoninnovate /dragoninnovation
Hardware Revolution + VC
Brandeis University Prof. Nandy Scott N. Miller
Dragon Innovation, CEO Bolt, Partner
Waltham, MA
www.dragoninnovation.com
March 31, 2016
Agenda
• Quick Survey • Journey from Graduation to VC • Getting Started in VC • Q&A
Quick Survey
Part 1: Journey to Dragon and Bolt
RoboTuna
6
Robotic Corvette Powered Dino
8
Initial iRobot Expertise
9
Journey from $100,000 to $100 Price
10
My Real Baby ~ 100k
11
Velociraptor ~100k
+
12
Roomba and Scooba
Pre-HW Revolution The “Bake-Off”
• 2008 Layoffs -> Fearless and Connected Entrepreneurs • Falling Cost of Components, esp. Sensors, Processors, and Radios • Proliferation of Smart Phones • New Reoccurring Revenue Business Models • Ability to Reach Millions of New Users in Record Time Through
Social Media • Available Capital (VC, Strategic and Angels)
Adapted from KPCB / Mary Meeker report in Dec 2012
Dawn of the HW Revolution (Phase 1) Changes Become Enablers
Democratization of Phase 1: Idea to Prototype Catalyst: Tools, Building Blocks, Platforms and Knowledge
Crowdfunding ME Parts EE Parts Collaboration Education Accelerator Makerspace
16
Problem We’re Solving: Phase 2
18
19
Dragon Innovation has helped launch and scale over 200 companies since 2009
Dragon Funding Timeline
• Consulting (Bootstrapped) • Identified Crowdfunding Need • Seed Round -> Venture Backed • Product Team -> Dragon Crowdfunding • Pivot to Platform • Acceleration
21
Bolt Timeline
• Founding Team & Vision • Fund 1 • 12 Investments • Fund 2 • Expand Team + Offices
Part 2: VC
Many Ways to Finance a Business
• Part of a Larger Company • Bootstrap (1 yr) • Friends & Family • Angels • VC • PE • Debt • Profit!
Each has their own pros and cons – Pick what’s right for you.
VC 101
• Structure • LP / GP / Associates • Carry + Management Fee
• Segments & Stages • 1 in 20 Grand Slam • Power Law • Long Game and Exits
Typical Seed Process
• Intro • Build relationship / Get Feedback • Build Deck • Iterate • Friend Outside of the Firm • Partner Meeting • Monday Morning Meeting • Term Sheet • Other VC’s (competitive or additive) • Wire Instructions
Deck Format
• Team• Company Purpose• Problem• Solution• Why Now• Market Size• Business Model• Competition• Customer Acquisition Funnel• Traction• Financials• Appendix
Source: Matrix
What HW Seed VC’s Look For
• Working prototype • Traction in the market • Strong technical and business team.
Typically 2 – 3 co-Founders. • Understanding of the market size and
economics. • Reoccurring revenue with path to
$100M revenue in 5 years. • Warm intro.
Resources Venture Deals: Be Smarter Than Your
Lawyer and VC. Brad Feld, Foundry.
Brad’s Blog: Feld Thoughts
Mattermark Fred Wilson’s Blog
Questions
@dragoninnovate /dragoninnovation DragonInnovation.com