Nivi · October 8th, 2010
This is Naval’s keynote from Capital Factory‘s demo day. It’s called The Rise of the Angels, but it should be called The Rise of the Entrepreneur. It’s excellent.
Here are the slides. Make sure you check out Slide 8 for a draft Entrepreneur’s Bill of Rights. And Slide 20 for Naval’s prediction that spectacular fraud will occur in angel investing.
Some of my favorite quotes from the presentation:
The venture industry has already changed.
Venture capital is a business and is open to attack by startups with disruptive new business models and technologies.
Less meeting; more tweeting.
Thanks to Joshua Baer for inviting us to give the keynote.
Topics Presentations
Absolutely one of the best presentations I’ve seen as an entrepreneur.
Most important for someone like me with a new startup is that it gave me confidence. So many of the presentations I witness are intensely focused on the challenges entrepreneurs face; they seem designed to discourage rather than encourage. After Naval’s presentation, and indeed the entire Demo Day lineup, I felt certain that I could succeed and I left the event armed with valuable tools to do so.
I highly recommend this to anyone starting a new venture. Many thanks to Naval for presenting it, and to Capital Factory for giving me the opportunity to witness it.
With the recent economy, it has been interesting to watch how one goes about acquiring funding. It has forced people to be creative and quite entrepreneurial. We recently published an article that talks about a new source of funding from the “Super Angels”. Here is that article, I hope you find it interesting. http://bit.ly/ad0a8g
Enjoy!
Naval, really great presentation, I’ve been recommending it to everybody as “the startup talk of the year”. Oh, and thanks for putting the slides immediately below it in the post, much appreciated! 🙂
But… I do wonder whether the real backstory here isn’t so much the rise of the entrepreneurs as the fall of ‘smart money’. From talking with active UK angels, most seem to be de-risking their portfolio by capping individual investments at ~£20k (~30k USD): but this kind of ‘probabilistic investment strategy’ (i.e. lots of small investments, don’t look too closely, stay off the board) is pretty much incompatible with the whole ‘smart angel strategy’ (fewer & bigger investments, hands-on mentor-style involvement, etc).
All the same, I think it would be wrong to characterise this as a cartoon battle between ‘smart money’ and ‘dumb money’: rather, it’s more like a debate between ‘hands-on money’ and ‘hands-off money’. So, perhaps the kind of entrepreneur-centric “Bill of Rights” you discuss is simply how things have to be in order for entrepreneurs to work with the new breed of ‘hands-off angels’.
I suspect that LinkedIn and Twitter have pretty much invalidated smart money’s ‘I’ll open my Rolodex‘ value-add: and that countless big fails have turned serial angels away from big per-company investments. Things go in cycles, for sure: but sometimes Big Ideas are shown up to be bad ones, too. Super-angels aside (who play by different rules), would you agree that this is probably all a symptom of the death of the ‘smart money myth’?
Naval,
This is one of the most insightful overviews I’ve seen. I would like to embed this as a feature at our site and ask you some followup questions.
Our syndication deal with YahooFinance goes live this week, and I’d love to get you involved.
Thanks!
Damien
Naval, you are not only a great presenter with a deep knowledge and experience in the VC industry but you are also a very decent and civilized guy who rightfully believes that fairness and transparency are key in the relationship between entrepreneurs and investors.
Naval,
Thank you for this wonderful presentation. Yes the tables have turned. I think we should thank Linus and Richard Stallings for creating the platform for the open source movement which resulted in a lower cost software startup model which turned the tables on the VC’s.
This changes everything.
-no onerous vc terms
-no complex legal documents requiring vastly overpaid lawyers
-linear funding streams rather than ones that look like step functions
-faster time to funding
-no inexperienced associates at VC firms filtering out startups
-no rolodex requirement for intros
Finally fairness and transparency are the rules of the day.
However, there is a down side to this development and that is that the fakes will get money and the investors will get burned and they will then become more conservative.
I think that the corollary to this presentation is one for investors that addresses the investment decision making process. Educating the new investors is just as important as the paradigm shift we are seeing away from investment capital.
Startups that burn investors will hurt the entire process. It is important that the investors make the right choices so that they stay in the game.
Please consider a job as the secretary of the treasury or chairman of the SEC where you could straighten things out for the country. Seriously!!!! 🙂