Technology Launch from Seed Funding to Liquidity Event

Transcription

1 Technology Launch fom Seed Funding to Liquidity Event Tammi Smoynski Diecto, Intel Capital Intel Copoation Septembe, 2010 * Othe maks and bands ae popety of thei espective ownes Intel Capital Oveview Taditional Ventue Funding Cuent Ventue Envionment Pitfalls to Get to Commecialization 2

2 Intel Capital Mission Make and manage financially attactive investments in suppot of Intel s stategic objectives STRATEGIC FINANCIAL A Stage Agnostic and Long-Tem Investo 3 Technology Focus Mobile Intenet Client Enhance mobile platfom capabilities though WiMAX eco-system enabling, mobile apps & content famewok, comms / compute SoC elements Digital Home Content distibution ove IP, digital media, gaming, education, connected home applications Digital Entepise MVS (Manageability/Vitualization/ Secuity), Cloud Computing, Stoage & Infomation Mgmt, vpo / PES, HPC. Softwae and Sevices Application and Infastuctue Sevices, Intenet and Cloud Computing, Softwae fo CMDs, Visual Computing fo gaphics intensive softwae. Consume Intenet Web-based consume apps, sevices and infastuctues (social, e-comm, seach, advetising) Manufactuing, Memoy and Digital Health Advanced Mateials, Fab Equipment, EDA Tools; Memoy Ecosystem & Disuptive Technologies; Digital Health Apps & Devices Clean Technology Distibuted Geneation and Stoage, Tanspotation, Consumption Efficiency, Tansmission and Distibution 4

3 What Intel Capital Repesents Among the lagest investment oganizations in the wold Global each,,p pesence, and undestanding Insights and expeience in emeging makets and technologies Commitment to company building Tadition of isk taking, innovation, and excellence Unmatched diffeential advantages Vast access to capital 5 Intel Capital Investments Since 1991 Dollas Invested $639M $1.59B $327M $9.5B+ New Investments 77, $554M 62, $436M 25, $100M 1,050+ Companies Intenational Dollas 56% Excluding VMWae 62% Excluding Cleawie 50% 35% Exits 11 IPOs, 23 Acquisitions 2IPO IPOs, 19 Acquisitions 2IPO IPOs 13 Acquisitions 175 IPOs, 241 Acquisitions 6

4 Intel Capital Oveview Taditional Ventue Funding Cuent Ventue Envionment Pitfalls to Get to Commecialization 7 Life Cycle of a Stat UP (Educational Puposes Only) Idea Business Plan/Investo Deck Seed Capital Bootstapping, Fiends/Family and Angel Funding Institutional Funding Ventue Capital: Seies A Seies? Ventue Debt Bank Loan/Line of Cedit Liquidity Event = Investos able to get cash back IPO o M&A o shut down Institutional Funding -> Liquidity Event < 10 yeas 8

5 Ventue Capital Follow the Cash (Educational Puposes Only) LIMITED PARTNERS Pension Funds Wealthy individuals. CALL funds VENTURE FUNDS Kleine Pekins Sequoia. INVEST, with new Lead START UPS ALLOCATE: ~5% FUND = Committed Cash 10 YEAR LIFE EXITS: IPO (BEST) M&A (GOOD) Shut down 9 Limited Patnes (Educational Puposes Only) Monthly $5M Contibutions Pe 2008 $1 BILLION $100M PE & VC 10% $100M Real Estate $100M Intl Equity $100M Commodities $100M Hedge Funds $100M US Equity $100M Intl Bonds $100M Bonds $100M Money Maket $100M Cash Monthly $7M Payout to etiees Monthly $1M Contibutions 2009 $510M $70M PE/VC 13.7% $10M Real Estate $30M Intl Equity $50M Commodities $10M Hedge Funds $50M US Equity $30M Intl Bonds $70M Bonds $90M Money Maket $100M Cash Liquidity Issues Monthly $4M Payout to etiees 10 = etun

6 Limited Patnes (Educational Puposes Only) Told VCs to not ask fo money (liquidity issues) Then educed EXISTING commitments (allocation issues) Reduce amount you will send in futue Reduce amount you aleady sent = equie VC fims to sell shaes in seconday maket Not making NEW commitments (both liquidity & allocation) NET-NET: Reduction in $ available fo Ventue Investing 11 Stat Ups (Educational Puposes Only) Stalled evenue amp New funding difficult Lots of Inside ounds slow painful pocess Cut wok foce, pay cuts, wost case, shut down Delayed EXITS (IPOs, M&A) 12

7 Ventue Fims (Educational Puposes Only) Impact fom LPs VCs unable to time when LPs would send funds in LPs educe commitment levels Impact fom stat ups: Revenues pushed out, now need cash Altenative funding souces died up, VCs only place fo cash No liquidity events: no cash coming back in to VCs Impact fom othe VCs: No new investos to pice/invest lage $ in companies VCs unable to suppot follow on ounds 13 # VC Fims & VC Capital Raised Declining (Educational Puposes Only) 09, tend continued Souce: Wall Steet Jounal June 5, 2009 fom National Ventue Capital Association Note: Active ventue capital fims that have aised funds in the last eight yeas 14

8 Intel Capital Oveview Taditional Ventue Funding Cuent Ventue Envionment Pitfalls to Get to Commecialization 15 Now vs. Tech Bubble Cuent economic situation is wose as impacts all sectos acoss eveyone aound the globe Sequoia s Oct 2008 pesentation was a good wake up call stat ups moved faste to cut costs Valuation came down on deals given less VC competition Competition fo stat ups educed as companies went out of business 16

9 Fundaising Still Tough, Though Not fo Evey VC Fim Pospect Ventue Patnes has secued $180 million... tageted at $250 million Pospect Ventue Patnes IV LP would be half the size of its pedecesso, which h closed at $500 million in (VentueWie, 8/18/10) Menlo Ventues Fund XI, which came to maket this summe, has a $600 million taget and $800 million had cap, a steep dop fom its $1.2 billion pedecesso aised in (VentueWie, 8/27/10) Institutional Ventue Patnes has closed its lagest-eve ventue fund at its had cap of $750 million, up fom its taget of $600 million. (VentueWie, 8/31/10) 17 Legacy VC Funds Need Exits Ventue fims ae facing ticking time bombs embedded in thei fund documents. The ventue industy is eaching the end game on the huge wave of funds it aised duing the dot-com bubble. Fom 1999 to 2001, 1,203 ventue funds closed on $178.7 billion, and many of these funds still hold companies that investos think have potential. U.S.-based ventue investos cuently have 3,929 U.S.- based companies in thei potfolios that eceived thei initial equity investment seven o moe yeas ago, accoding to Dow Jones VentueSouce. That epesents 28% of all U.S.-based potfolio companies of U.S. VCs. (VentueWie, 8/27/10) 18

10 Many VCs Shifted Focus Many VC fims have shied away fom high capital equied, ealy stage deals Once known moe fo semiconductos and systems, Mogenthale Ventues has been moving moe into Intenet and consume technology investing in ecent yeas. (VentueWie, 9/7/10) 19 Ealy Stage Chip Deals >$40M funding difficult to do when secto out of favo Must be fugal Look fo altenative funding (SBIR, DARPA, etc.) May be equied to show woking device befoe Seies A (unhead of back in the 90s) VCs may want opeational expeience on mgmt team Focus on poducts with ASP > $5.00 in high volume, undestand pice eosion Maket segment > $500 million Focus on 10x technical impovement when in cowded spaces 20

11 Intel Capital Oveview Taditional Ventue Funding Cuent Ventue Envionment Pitfalls to Get to Commecialization 21 Novel technology is not itself sufficient to get something to commecialization and a successful liquidity event. 22

12 Reseach vs. Commecialization Reseach Commecialization Team Constaints Cost 23 Reseach vs. Commecialization Reseach Commecialization Volume High Volume Manf Cetifications/ Waanties 24

13 Reseach vs. Commecialization Reseach Commecialization Competition Maketing / Channel Poduct Featues 25 Examples of Hadwae Stat Ups Founded Out of Univesity Analog Devices (MIT, 65) -> IPO in 69 Qualcomm (UCSD, 85) -> IPO in 91 Akustica (CMU, 01) -> Acquied 09 by Bosch Micoeacto (UCB, 02) -> Acquied 09 by Pall Silicon Clocks (UCB, 04) -> Acquied 10 by Silicon Labs Solynda (Stanfod, 05) -> Filed fo IPO in 12 09, cancelled IPO in

14 In Conclusion Tough funding envionment Real innovation can get funded deam big Be pactical -> be fugal Good Luck! 27

15 Back Up 29 Examples of MEMS M&A Date Taget/Issue Desciption Buyes/Investos Aug-00 Silicon Light Optical MEMS poducts fo display, light Cypess Semiconducto Machines Cop. modulatos, and maskless lithogaphy May-04 Kavlico Cop. MEMS tessue / tempeatue t / tilt sensos fo Schneide Electic S.A. automotive, aeospace, militay, and industial applications Oct-04 Iidigm Display Low powe MEMS-based display technology QUALCOMM Inc. Cop. fo mobile handsets Dec-04 Humiel, S.A. MEMS humidity / tempeatue sensing solutions fo consume and industial Measuement Specialties Inc. applications Dec-06 Reflectivity Inc. MEMS light valve device fo pojectos Texas Instuments Inc. Dec-07 Intesema Sensoic MEMS pessue sensos fo consume, Measuement Specialties SA S.A. automotive, ti medical, & industial i maket. Inc. Aug-08 Infineon BAW Filte MEMS high pecesion RF filteing fo wieless Avago Technologies Limited Biz applications May-09 LV Sensos MEMS tie pessue senso Atmel Aug-09 Akustica MEMS micophone Bosch Nov-09 Kionix, Inc. MEMS acceleometes fo consume maket Rohm Co. Ltd 30

16 Example of IPOs IPO Date Name (ticke) Desciption Dec-07 MEMSIC (NasdaqGS:MEMS) MEMS-based inetial sensos Filed S-1 Invensense MEMS-based gyos 31 Intel Capital: Investing in Success VA Linux Systems 32 * Othe maks and bands ae popety of thei espective ownes

17 Intel Capital: Recent Exits IPOs Meges & Acquisitions US China US (USA) Acquied by Cisco (USA) Acquied by Ideto (Sweden) Acquied by Sun Taiwan Japan Koea (India) Acquied by GTL (Isael) Acquied by NDS Goup (USA) Vietnam US US (Koea) Acquied by Analog Devices (USA) Acquied by Vigin USA Acquied by Macovision Chile Koea India (Isael) Acquied by Netwok Appliance (Isael) Acquied by Micosoft (India/UK) Mege Koea US (Isael) Acquied by PMC-Siea (Fance) Acquied by Comvese 33 * Othe maks and bands ae popety of thei espective ownes