THURS 0915 VersaceBallroom Aaron

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Slide2: 

Setting the Global Venture Capital Scene Streamed Session 2 Early Stage

Slide3: 

SPEAKER CHAIR Allan Aaron Partner Technology Venture Partners

Global Scene: 

Global Scene

Trends: 

Trends “ The data clearly demonstrates that the venture capital industry is evolving to a global business model where the pursuit of opportunities will not be restricted by geographic boundaries. The new business model will be complex, extremely competitive and will require VC firms to develop broad global networks…technology and entrepreneurial communities are the real winners” Global Trends in Venture Capital 2006 – Deloitte Touche Tohmatsu

Positive Technology Trends: 

Positive Technology Trends Previously emerging technologies commonplace Broadband; converged portable devices; digital entertainment; wireless; low cost high performance computing and storage. Nascent geographic markets exploding China, India and other parts of Asia generating massive demand New business models being validated Online advertising bigger than radio, consumer and business magazines, outdoor and cinema Media and content Traditional media to Web, tools and technologies for user generated content Software at much lower cost Open source, modular software development techniques, software as a service Home and entertainment Games consoles, media centers, LCD screens, MP3s, wireless networks Generational change New generation of consumers grown up using mobile phones and the Web

Top Investment Sectors: 

Top Investment Sectors Energy is the most likely sector to see highest increase in investment focus Source: DTT/EVCA Global Survey 2006

Positive Australian Trends: 

Positive Australian Trends Growth in R&D spend ($12bn in 2003). Strength in Biotech (NHMRC) and ITC (NICTA) and others (public sector R&D) Second most competitive location for ICT research1 Highly skilled, low cost engineering talent (50% US/UK) Large sophisticated market (third largest ITC market in AsiaPacific and 11th largest globally). Expenditure 6.4% of GDP is ahead of UK, Canada, China and Japan Strong legal and accounting framework Linkages to Asia – immigrants, education, proximity 1. Economic Intelligence Unit 2005

Venture Capital Investment (2005): 

Venture Capital Investment (2005) Source: Thomson/AVCAL 2006 ; DTT – Global Trends 2006

Global Investment: 

Global Investment Source: DTT/EVCA Global Survey 2007

Reasons and Impediments to Global Investment: 

Reasons and Impediments to Global Investment Reasons Higher Quality Dealflow Emergence of Entrepreneurial Environments Risk Diversification Access to Foreign Markets Impediments IP concerns - China Regulations too strong - USA Regulations too lax – China/E. Europe/India Unfavourable tax – Canada/W. Europe Source: DTT/EVCA Global Survey 2006

Funds raised (Australia): 

Funds raised (Australia) Source: Thomson/AVCAL 2006

Average Fund Size (Australia): 

Average Fund Size (Australia) Source: Thomson/AVCAL 2006

Number of New Funds (Australia): 

Number of New Funds (Australia) Source: Thomson/AVCAL 2006

New Investments (Australia): 

New Investments (Australia) Source: Thomson/AVCAL 2006

Returns (Australia): 

Returns (Australia) “more than two-thirds of Australian VC money was raised in “crash” vintages or is too early to produce results vs 25% for the USA” Vintage comparisons indicate “Aussie VC is similar to top quartile US VC”1 Source: Thomson/AVCAL 2006 ; (1) Leading Australian Fund of Funds

Returns (USA/Australia): 

Returns (USA/Australia) Source: Thomson/AVCAL 2006 ; DTT/NVCA Global Survey 2006

Where did we come from?: 

Where did we come from? It all started in the USA Europe caught on late Asia is starting now

Where are we today?: 

Where are we today? The USA is no longer dominant New technologies, markets, competition are fully global But : Venture Capital is retreating

Stock Markets over the past 10 years: 

Stock Markets over the past 10 years

Where are we headed?: 

Where are we headed? Key issues for future success : Restore exit valuations Foster R&D Attract Talent

Conclusion :: 

Conclusion : All cycles have an end What is Venture Capital about ?