Kevin Lawton from TrendCaller have put together this great presentation (embedded below) about the changing landscape of Venture Capital. It shares some good point about the reasons behind why the Venture Capital model is broken and also some ideas on how to respond to this change.

It’s mostly targeted as a road-map for LP’s and Startups to better understand the current issues in VC industry.

Kevin:

This is a presentation I’ve created to help Limited Partners and entrepreneurs alike, wrought from a life in startups and studying the business of innovation. It’s an overview of forces at work, driving sub-par returns in the Venture Capital asset class, and identifies the attributes of VC which will yield viable startups and stronger returns to LPs.

Some of the points in he’s presentation:

• The IPO myth
• Rate-of-change gone hockey-stick
• Effects of rate-of-change on VC
• VC response to rate-of-change?
• Startups need to be adaptable
• The funding pyramid
• Future: 2-staged rocket approach of VC
• Bootstrapping / friends & family
• VC meets capital efficiency
• Market sizing fallacy
• The evolution of venture investing
• The Evolution of VC
• The Open Sourcing of contracts
• Summary: the new face of VC

Here’s one of my favorite point:

Acquirers buy the team & technology, not the VC.  The VC share of the exit is overhead.  Thus, VC returns are inversely correlated to %-owned. -> Beware of VCs who brag about high %-owned!  Poor returns follow…

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