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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
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Finding the next Waze: The OurCrowd Due Diligence Process

Aug 17, 2014

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Economy & Finance

OurCrowd

Breaking down the Waze Investment: Google just paid over $1 billion to acquire the Israeli social driving app.
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Page 1: Finding the next Waze: The OurCrowd Due Diligence Process

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

Page 2: Finding the next Waze: The OurCrowd Due Diligence Process

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

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Page 3: Finding the next Waze: The OurCrowd Due Diligence Process

Waze/Google Deal

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

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Page 4: Finding the next Waze: The OurCrowd Due Diligence Process

The investment case for Israel

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Page 5: Finding the next Waze: The OurCrowd Due Diligence Process

The investment case for Israel

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Page 6: Finding the next Waze: The OurCrowd Due Diligence Process

Special Guest:

Gadi MazorOurCrowd

General Partner/CTO

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Page 7: Finding the next Waze: The OurCrowd Due Diligence Process

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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Page 8: Finding the next Waze: The OurCrowd Due Diligence Process

“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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Page 9: Finding the next Waze: The OurCrowd Due Diligence Process

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

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Page 10: Finding the next Waze: The OurCrowd Due Diligence Process

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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Page 11: Finding the next Waze: The OurCrowd Due Diligence Process

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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Page 12: Finding the next Waze: The OurCrowd Due Diligence Process

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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Page 14: Finding the next Waze: The OurCrowd Due Diligence Process

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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Page 18: Finding the next Waze: The OurCrowd Due Diligence Process

#1: Great team

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Page 19: Finding the next Waze: The OurCrowd Due Diligence Process

AE-Squaredfounders have sold 3 companies

between the two of them

Case Study: AE-Squared’s great team

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Page 20: Finding the next Waze: The OurCrowd Due Diligence Process

#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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Page 30: Finding the next Waze: The OurCrowd Due Diligence Process

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: [email protected]: +1.914.401.6422

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Page 32: Finding the next Waze: The OurCrowd Due Diligence Process

Accredited investor?

Register now

OurCrowd.com

Sign up

blog.OurCrowd.com

OurCrowd Newsletter

Tuesday, July 30, 13