FinTech - InnoTribe Startup Challenge. Mike Sigal 500Startups (US)

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2 FinTech - InnoTribe Startup Challenge Mike Sigal 500Startups (US)

3 500 Startups is the World s Most Active Early-Stage Investor $390M+ in Capital Committed 1,800+ Portfolio Companies Since July 2010 People San Francisco Silicon Valley Los Angeles Mexico City New York Miami London Tel Aviv Riyadh Istanbul Bahrain Bangalore Bangkok Kuala Lumpur Seoul Taipei Tokyo Ho Chi Minh City Singapore Primary Geographies Countries Where We ve Invested Sao Paulo ID 5 OCT 17 3

4 A Selection of Current Portfolio Wins 5Unicorns($1B+ in valuation) * indicates company that has already exited * 40+ Centaurs ($100M ~ $999M in valuation) * indicates companies that have already exited * * * * * * Companies are a select sampling of investments across 500 Startups funds and at least one 500 Startups fund has invested in one or more rounds of financing for each of these companies. The valuations listed herein are estimated as at June 30, 2017 based on 500 Startups Valuation Policy. These numbers provide a snapshot of estimated valuation as at a particular time and may change. Further detail with regard to financing of companies listed on this slide can be found on Crunchbase. A full list of 500 Startups companies is available upon request. ID 5 OCT 17 4

5 Platform for Transforming Financial Services Early-Stage VC Fund Investing globally in enablers & disruptors across Financial Services FinTech Accelerator Program Curriculum, Mentors & Access to drive growth Corporate Innovation Services Advisory, Education & Deal-Flow to drive ID

6 World s Most Active FinTech Investor since Portfolio Companies 26 Countries 2 Unicorns 9 Centaurs Source: ID

7 Inspire us by giving us a view into what s going on outside our market.

8 AllLife

9 Ant Financial

10 Ethic

11 Finova Financial

12 Mycroft

13 Mira

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15 Market Cap: $14B to $400B in 12 months

16 Is: 234 raised $3.7B to date in 2017 Venture Capital: $127B (KPMG) IPOs: US$132.5B (E&Y) Crowdfunding: $739M (Statista) CoinSchedule

17 Hedge Funds: 90 new funds in 2017

18 What s RELY going on with Crypto Bitcoin made financial services sexy to geeks like made information sexy in the 90s and VoIP made communications sexy in the 00s.

19 Digital Transformation of Financial Services has only just begun Media 1 Travel 2 Retail 3 Telecom 4 & $368B of lost revenue between 2012 & 2018

20 $50B VC into Fintech. 10x in 5 years. (Charts in Appendix 1). 5 OCT 17 20

21 44+ countries are trying to generate an Fintech Innovation Economy

22 Luxembourg is not leading yet

23 We know disruption is coming. How do we change our skills and mindset to be the disruptor, not the disrupted?

24 Less than 1% of startups generate significant returns

25 Innovation fails ID

26 The big idea: #StartupEmpathy The startup ecosystem has 80 years of generational expertise achieving outsized returns from innovation despite low success rates. Applying this expertise to corporate innovation to drive operational excellence, talent development & predictable results.

27 Don t learn to Fail Fast. Learn to EXPERIMT CHEAP

28 Startups (and innovation projects) are collections of risks A startup is an organization formed to search for a repeatable and scalable business model - Steve Blank Complete Team Great Product Stable Team P-M Fit Large TAM Difficult to copy Customer will pay Many users Viable unit economics

29 Startups win funding as they eliminate key risks Startup stages from Startup Commons 3.0 Angel Pre-Seed Seed Post-Seed Series A/B Growth Exit / IPO Each is a discrete stage & circumstance for the startup and VC Risk decreases with each stage (in theory) Returns & opportunity are reduced at each successive stage Availability of business data is higher at each successive stage

30 Risks are eliminated in a predictable sequence Stage Angel Pre-Seed Seed Post-Seed Series A/B Exit / IPO Team Development Velocity User Feedback DAU/MAU Users Sign-ups NPS Activations Revenue Retention/Churn MRR/ARR CAC Profitability CLTV Activations DAU/MAU Users engaged Daily/Monthly Active Users MRR/ARR CAC Monthly/annually recurring revenue Customer acquisition cost For more metrics: Andreesen Horowitz (a16z): 16 Startup Metrics Conversion % of users that pay CLTV Customer lifetime value Retention/Chur n % of users retained/lost

31 To be great, hack VUE before GROWTH Value Seeking Growth Seeking Unlock a new product value proposition with the potential to delight a large number of attractive customers Accumulate attractive customers with increasing speed and predictability (Capital Efficient) Truth Seeking Ann Miura-Ko, Partner, Floodgate Ventures

32 Learn to think like entrepreneurs, not managers Causal Effectual To the extent that we can predict the future, we can control it. To the extent that we can control the future, we do not need to predict it.

33 Causal Reasoning: Managerial Thinking Distinguishing characteristic: Selecting between given means to achieve a pre-determined goal M 1 M 2 M 3 Given Goal M 4 M 5

34 Effectual Reasoning: Entrepreneurial Thinking Distinguishing characteristic: Imagining possible new ends using a given set of means E 1 Given Means M 1 M 2 M 3 M 4 M 5 E 2 E 3 E 4 E 5

35 Creative Causal: Gateway to entrepreneurial thinking Distinguishing characteristic: Generating new means to achieve pre-determined goals M 1 M 5 Given Goal M 6 M 7

36 Learn to frame challenges properly

37 Objective As mission commander, I want to lower 2 levels So that our guys can avoid asphyxiation

38 Challenge As mission commander, I want to find a way to connect the square-shaped and circular openings in the ducting So that our guys can avoid asphyxiation (e.g. rapidly)

39 Experiment As mission commander I want to find a way to: Make X Fit into the hole for Y Using nothing but Z So that our guys can avoid asphyxiation (e.g. rapidly)

40 How do we recapture all the resources we re spending on compliance so we can invest in innovation?

41 RegTech Market Context

42 ID 4.96B in RegTech ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID ID

43 RegTech Media Mentions

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45 Think like an entrepreneur E 1 Given Means M 1 M 2 M 3 M 4 M 5 E 2 E 3 E 4 E 5

46 about RegTech in Luxembourg Given Means M 1 M 2 M 3 M 4 M 5 Knowledge of RegTech is exploding Customers 3882 Funds 320 Insurance/Reinsurance orgs 143 Banks Funding Luxembourg Model #StartupEmpathy

47 The Luxembourg RegTech Challenge As The Luxembourg Community We want to - reduce the cost of compliance for funds globally - become the domicile of choice for RegTech startups So that we can participate in the hyper-growth of Financial Service Digital Transformation

48 Thank you. Mike Sigal Partner, 500 Fintech / Co-Founder, Upside Partners This publication contains general information only, and none of the member firms of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collective, the Deloitte Network ) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication. As used in this document, Deloitte means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see for a detailed description of the legal structure of Deloitte USA LLP, Deloitte LLP and their respective subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright 2017 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited