Finding the next Waze: The OurCrowd Due Diligence Process

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Breaking down the Waze Investment: Google just paid over $1 billion to acquire the Israeli social driving app.

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Finding the next Waze: An insider view of startup investing and due diligence

How to conduct professional due-diligence

Creating a winning investment checklist

Breaking down the Waze investment: From startup to $ billion exit

Tuesday, July 30, 13

Zack Miller, OurCrowdHead of Investor Community

David Stark, OurCrowdInvestment Associate

Meet OurCrowd’s Team

OurCrowd: 7 months since launch, OurCrowd has invested $17M in 26 startups

Tuesday, July 30, 13

Waze/Google Deal

• >$1 billion• team gets to stay in Israel• Israel and the consumer web

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The investment case for Israel

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The investment case for Israel

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Special Guest:

Gadi MazorOurCrowd

General Partner/CTO

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2008

BlueRun leads $12M round, Magma and Vertex join

Same investors Qualcomm

Ventures: $25M round, $95M

valuation

2010 2011

$30M round inc Kleiner Perkins,

$200+M valuation

2013

Google buys Waze app for $1.1 billion

Waze: Anatomy of a super investment

“Our bet was basically that they could disrupt old-fashioned cartography, and that they were at just the right time to begin trying it.” -- BlueRun’s John Malloy

2.2M us

ers

7M us

ers

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“We’ll also work closely with the vibrant Waze community, who are the DNA of this app, to ensure they have what’s needed to grow and prosper.

The Waze community and its dedicated team have created a great source of timely road corrections and updates. We welcome them to Google and look

forward to working with them in our ongoing effort to make a comprehensive, accurate and useful map of the world. ”

Posted by Brian McClendon, Vice President, Google

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Where to find the next Waze (or, how do I invest in the next $billion exit)??

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Building deal flow pipelineSources of dealflow

• web, email, referrals

• tech events

❖ Resources: TechAviv, Garage Geeks, incubator demo days

• proactive sourcing

• Jeff Pulver’s Twitter investment (just a Tweet away)

❖ Resources: OurCrowd, AngelList, CrunchBase, blogs/articles

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Initial screening process• Elevator Pitch

• (big) * (idea, market, team)

❖ disruptive idea

❖ market > $500M

❖ team = serial

• Coffee Chat with Founder(s)

❖ Blink theory: experience breeds good intuition

• Pitch Deck

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In-depth diligence• Follow-up meetings with

management

• Research: biz plan, competition, industry trends/forecasts, intellectual property, financial projections, HR

• Customer/strategic partner interviews (see handout)

• Industry experts/mentors

❖ Resource: DIY Expert Networks (see Quora, Laughing at Wall Street)

• Scorecarding (see handout)

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The morning after... from investor to mentor

• Can I add value?

• customers/partners/hires/investors

• perfect balance

• annoying <--> helping

• aligned expectations

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How will OurCrowd identify the next Waze?

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...the 6 point investment checklist

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So, how does Waze score?

1. Great team

2. Large market

3. Easy to understand

4. Traction

5. Sponsorship

6. A good deal

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#1: Great team

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AE-Squaredfounders have sold 3 companies

between the two of them

Case Study: AE-Squared’s great team

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#2: Large market

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Fireblademultibillion dollar market of

website securityanti-bots, anti-scraping

Case Study: Fireblade’s billion dollar market

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#3: Easy to understand

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Abe’s MarketAmazon for green products

Case Study: Abe’s Market is easy to

understand

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#4: Traction

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KelaExisting customers include

Fortune 100 + top hedge fundslarge pipeline

250% revenue growth YoY

Case Study: Kela’s traction

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#5: Sponsorship

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Argo/ReWalktop Israeli venture capital investors (Pontifax, Israel HealthCare Ventures, SCP

Vitalife)

Case Study: Argo’s sponsorship

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#6: Good deal

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Parkoinvestment made at good

valuation

Case Study: Parko’s early stage valuation

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Summary

• Waze exemplifies a new type of Israeli startup

• Conduit, Wix, Mobileye, GetTaxi

• Finding quality angel investments requires a formal process

• OurCrowd is helping make investing in startups easier and accessible

➡Now, for accredited investors and hopefully in the near future, open to all investors

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Any questions?

Zack Miller, Head of Investor Communityemail: zack@ourcrowd.comphone: +1.914.401.6422

Tuesday, July 30, 13

Accredited investor?

Register now

OurCrowd.com

Sign up

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Tuesday, July 30, 13

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