@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

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My Real Baby ~ 100k

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Velociraptor ~100k

+

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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

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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

Scott@DragonInnovation.com