What You Should Know About Biden's Administration as Startup or a VC
The United States has inaugurated a new president last week. And even though we try to stay as a-political as possible we are aware that Joe Biden's policies will affect our favorite and rebellious startup world. So we prepared this article to review what to expect of 2021, share with you what are we excited about, and what to be conscious of new taxes, new rules, immigration law, and industries that will be propelled in the next 4 years. Disclaimer: We are not pro-Trump neither pro-Biden. We are pro-technology and mission-driven entrepreneurs. This is an important time for the whole world as the US plays a massive role in macroeconomics and sets the tone for many conversations happening around global climate change and social crisis. As well as decisions around which technologies will fly or die in the next decade. Biden has been a long-time favorite of a Silicon Valley community. We remember Sam Altman, best known as the president of Y Combinator, contributing $250K to support the democratic party. Now Biden is bringing "one of us", a person from venture capital, to the White House. Ron Klain, an attorney who serves as EVP at venture investment firm Revolution, now will serve as Biden’s chief of staff. This fact gives us hope for the strong backing of a VC and innovation ecosystem from the White House. Below are 5 main areas, that we believe will have the mightiest impact on the innovation economy. Taxes Big tech companies have done very, very well during the Trump years. Apple and Alphabet—got special treatment in the Trump Tax cuts of 2017, where their corporate income tax rate dropped from 35% to 21%. Democrats are likely to push for higher taxes for high earners and businesses, including via increased capital gains taxes and raising the corporate tax rate back up to 28%. As Fastcompany states: A Biden tax plan could change the venture capital business model. Right now, the wealthy people who invest money in the funds of VC firms can pay a lower capital gains tax rate on some of the proceeds they earn from the fund’s investments. But Biden’s tax plan would tax long-term capital gains as ordinary income for people earning more than $1 million per year. If that happens it means that less money will go into VC funds, and as a result, we will see smaller funds, with less capital and even harder terms for startup founders to get capital. We are assured that funding won't be getting easier and the whole VC business model might be shifting towards a more hands-on approach and chasing profitable companies with fewer multiples but higher chances of bringing a return. Immigration policy The previous administration has cut down immigration of all sorts, including the H-1B visas for highly skilled workers. In contrast, Joe Biden released a policy statement pledging to reform the H-1B system and remove limitations on the number of green cards issued. As well as provide fast-tracked green cards for foreign students who receive a doctorate-level degree in STEM fields and a job offer upon graduation. We might experience international brains flowing to US startups again! A 2013 study by the National Venture Capital Association found that one-third of U.S. venture-backed companies that went public had at least one immigrant founder. Another study found that immigrants helped found more than half of U.S. unicorn startups. If you were considering moving your startup or yourself to the US - this year will be a good time for doing that. Inclusion Tech, historically a male-dominated industry, started a march towards diversity and inclusion a few years ago. 90% of our calls with VC investors are still with white males. But we also meet more and more female founders and diverse teams. Biden supports the trend and now we are seeing a huge transition from Trumps' white male administration into a diverse Bidens' team. We believe that a startup community and the whole world will benefit from seeing more female role models and people of color making massive decisions, handling power, and bringing new opinions to the table. If you still not taking advantage of diversity in your team, you should do it now! Cleantech breakthrough As we were mentioning in the video released in early 2020 Cleantech and Health tech are the areas of focus. Although, there is no solid plan on cleantech yet, as Crunchbase News columnist noted in her most recent article, many of the cleantech areas that Biden talked about early on in his campaign, include more pedestrian-friendly infrastructure and electric cars. The former vice president has mentioned the beginning of phasing out of carbon-producing industries like coal while putting significant federal resources into developing renewable energy sources like solar and wind. Salut to our cleantech startup founders and investors! In our company we choose to focus on impact-positive companies, including cleantech and healthtech mid-2019, 2021 is just a year to recommit to it and go big! Cleantfounder can also look into government grants and support. Healthtech focus Biden is a regular visitor of a big tech conference - StartupHealth and has clearly been indicating his support to the healthtech industry. Biden and Vice President Kamala Harris stated that dealing with the virus is their No. 1 priority. It is hard to heal the economy when people are getting sick. There is a big chance that the COVID-19 vaccine will be widely distributed at the market very soon, but this pandemic highlighted massive problems with the US healthcare system. Luckily more than $10 billion were invested in disrupting every corner of healthcare will be put to work in the next years and we will see a positive change in the quality of life, disease treatment, and prevention, accessibility of healthcare. We would say both public and private companies will be experiencing interest among investors, high valuations, and high growth. All 2020 we spent selecting and accelerating health tech startups, and we will continue doing so. Of course, there is more to this conversation, but we want to know WHAT are you most excited about for the next 4 years? Drop us your predictions in the comments!
21 Legendary Pitch Decks that Raised more than $40B
Every fundraising starts with the investors' presentation, or as we call it in startup world Pitch Deck. Your deck can either open doors for you, or be forever lost in the "look later" folder. Let's learn for the best, and apply it to your startups. Want help creating your Pitch Deck? Our team is happy to do it for you! Book a FREE call with CEO, Anastasia Green today. 1. Facebook Core takeaways:
1. Determine growth drivers to increase the number of users. For Facebook, the growth driver is the number of member schools. The increase in users is a consequence of the correct use of a growth driver. Determine your growth drivers. 2. Expansion plan based on growth driver. Very clear mission/goal for the next 4 months. 3. Highlight the purchasing power of your consumers. Monetization is just a matter of time. 2. Airbnb Core takeaways: 1. A short intro that describes the project and gives an understanding of the whole deck is a real art. Airbnb intro gives an idea of the problem, market, and even approximate size of it. 2. The less text the better. Try not to overload the slide with a lot of information and text. Show - don’t tell. Slides like bullets. 3. One core business model. Don't tell you to have three different products and four business models. 4. The simplicity and clarity of the Airbnb’s pitch deck made it one of the most popular references for entrepreneurs around the world. 3. Buffer Core takeaways: 1. The deck is based on traction and numbers - users, paid users, revenue, growth rates, milestones. 2. Show rapid growth. In Buffer's case, it was a 5% churn and good LTV, that allowed them to acquire new users. 3. Describe your teams' achieved results to date by each core team member. It's always a good idea to show traction as often as you can. 4. Square Core takeaways: 1. The team is a huge asset and leverage. It's wise to show the management team on the first slides if they have a great background in the industry. 2. The deck is focused on a business model with detailed financial assumptions showing their annual revenue and growth rate. 5. Linkedin Core takeaways: 1. The deck focuses on why LinkedIn is different than other social networks and shows extended analogy with other services and how they were transformed into more advanced ones. 2. Impress investors by showing that your previous growth commitments were wrong – you just exceeded them multiple times or achieved them in a shorter time. 6. Mint Core takeaways: 1. The clear value proposition for customers and prospective partners. 2. Lots of attention towards competitors, risk, and precautions, defensibility. If you operate at a competitive market with big guys, you should have a clear vision of how to defeat yourself. 3. The deck also responds to the main investor’s concern – the exit strategy. 7. Mapme Core takeaways: 1. Social proof and traction trumps all. If you have a strong viral effect, do not hesitate to put it in front. 2. The short deck answers the questions about traction, go-to-market strategy, business model. 3. If you have a demo that clearly shows the product - definitely use the demo. 8. Launchrock Core takeaways: 1. If you have great traction put it first. 2. The deck demonstrates how the product works and how it can be used in different cases. 3. Strong accent on viral effect and recommendations. People promote what they like and what resonates with them but also promotes LaunchRock. 9. Mixpanel Core takeaways: 1. The first 6 slides are talking about problems, solutions, and competitive advantage but briefly and clearly. The 7th slide vividly confirms that everything said before is a fact. 2. The deck provides numbers of sales KPIs, marketing funnel metrics, and presents clear expansion plan. 3. Financial history affirms the effect by providing the names of the previous investors. 10. Moz Core takeaways: This pitch deck can be used as a template by an already established company. If you are able to present accurate estimated revenue, revenue run rate, average customer lifetime value, cost of paid acquisition, then follow this template. 11. Buzzfeed Core takeaways: 1. The numbers are the best attractors. If you have big numbers don’t be afraid to put them on the first slides. Millions of users visiting the website on a monthly basis and reputable quotes are the best signals for investors. 2. Many slides refer to description of the platform and giving information on what is inside. 3. Good projects are born at the intersection of industries. Buzzfeed shows that they operate on the intersection between Media and Ads and thus explaining why competition is not very tough. 12. Youtube Core takeaways: This is Youtube’s pitch deck to Sequoia Capital (one of the most established VC investors). The company goal was to be the primary outlet for video content, and it succeeded in doing just that. Obviously, Youtubes' goal to dominate the niche was strongly supported by traction. This deck is a great example of how a focus on one "North Star" feature can lead you to $1.6 billion acquisition by Google. 13. Manpacks Core takeaways: 1. An outstanding fun design that helps to explain the project. 2. Social proof. Testimonials show that the problem exists and the solution is great. 3. An investor can be a customer and vice versa. 14. Foursquare Core takeaway: Use screenshots to show how App is working and how users gaining value from it. A picture worth a thousand words. 15. Dwolla Core takeaways: 1. One of the best ways to show that a startup solves existing problems is to put a story or a person who faced it. Dwolla tells a story of how the founder who created the solution not to pay $50,000 a year in credit card fees ever again. 2. When disrupting the existent market be ready to show secret sauce and uniqueness (what can be shown without signing the NDA). 16. Zenpayroll (Gusto) Core takeaways: This isn’t a simple startup deck. It is a holy grail, a template you can use and replicate easily by filling in the blanks. The company raised $6 million with this deck. 17. Wealthsimple Core takeaways: 1. The deck is simple and short. 2. The description gives full knowledge of what startup is and of what they do. 3. It is important to find a gap in a large market and it really great when the gap is also huge. 4. The additional slides have useful tips regarding fundraising on seed stage. 18. Canvas Core takeaways: 1. Analogies and visualization help to understand your business the fastest. 2. Show how and who you are helping. 3. Create a new market or solve an old problem in the existing market in a new way. Canvas doesn’t create a new market but it resolves old problems on the huge market by creating new solutions. 19. SteadyBudget Core takeaways: 1. If you have traction - use it. 2. Show how the problem is solved now and why you have a better solution. 3. Use screenshots to demonstrate functionality and visualize your statements. 20. Fittr Core takeaways: What's under the hood matters. The attempt to replace fitness trainers with the App is not unique. But Fittr says that they have a special feature inside to make workouts plans better and better by using unique AI technology and social motivation that will keep users on track. 21. Swipes Core takeaways: Social proof. References in well-known authoritative media can be a good way to back up a story. Pitch Deck can either open investor's doors for you or shut them down from the first slide. If you want to increase your chances of getting funded - let our team poor our experience and knowledge in creating more than 120 pitch decks into your company investors presentation.
How to create Investor Pitch Deck that gets you funds
he critical task of any modern businessman to succeed is to raise funds. You may have the best idea in the world and have the perfect plan to implement it, but unless you can convince investors that that's the case - it will be virtually impossible to create a successful project. And one of the best tools that can help you raise funds is a Pitch Deck - a brief (no more than a dozen slides) presentation of your business plan. Why is a Pitch Deck so important? When you interact with an investor for the first time, you have no more than half a minute to make an impression and lay down a foundation for cooperation. A Pitch Deck is an extremely condensed and time-efficient way to present your company or project. But only if you do it right. How do we know? We work with Pitch Deck for more than 10 years now. We've designed and built more than 120 Pitch Decks for our businesses and clients. And these Pitch Decks allowed our customers to be accepted in accelerators like 500 startups, YCombinator, Techstars, to pitch to Tim Draper Show and to get investments from Andreesen Horowitz, Launchpad and others. We are constantly in contact with more than 400 VC funds, family offices, and angel groups, which provide us with feedback, so we know precisely what is fundable and what isn't. How to build a fundable pitch deck for your startup? There are 3 main rules. Follow the standard - the deck should have 10-12 slides. Anything extra - use cases, in-depth technology overview, detailed metrics, and so on - should be moved to the appendix and presented during your meeting with the investor. First, you have to get the investor interested. Keep it simple—one point per slide and no unnecessary elements. You should get people interested in a glance. So everything should be visually clean and straightforward. Avoid common mistakes: Don't use vague words like "Huge," "Great," "Hard," and so on. Use precise numbers. Don't get too technical. If people don't understand what you're talking about - they won't be impressed. Don't focus on the distant future and makeup billions in revenue out of thin air. Show your current traction and expected metrics for 1-2 years maximum. But what should these slides be? Well, we've figured out. based on our experience, that the optimal Pitch Deck structure is as follows: Elevator pitch. Basically, it is the introduction. You should answer the three most essential questions about your startup: "What?" "Why?" and "For Whom?". And you should do most simply and straightforwardly possible: no technical language, no showing-off how smart you are and so on. The Problem. What issue does your project address? You should not only describe the problem but prove that it is real (using numbers, not vague words) and specify, who struggles with that problem the most. In other terms - define your target market, Your Solution. Explain how you will solve this problem. The perfect way is to explain it in one sentence and in a couple of others - to explain why it is the best option. Your Product. Give investors a sense of what your product does. Don't go deep; key features will be enough for now. SCreenshots, mock-ups, and short videos are the way to go. Market Volume. You must specify the volume of the market you try to get into. In most cases, investors aren't interested in markets smaller than $1 billion. However, be careful with the numbers - if you screw up here, you won't get another chance. So don't lie - the data can be easily checked. Your Business model. Explain how you are going to make money. If you plan for multiple sources of income, talk only about the main one. Again - keep it simple. You'll get your chance to get into details. Your competition. Everyone has a game, don't even try to pretend that you don't. Competitors may be outdated or not compete with you directly, but they are there. Also, try to identify a real advantage that makes the competition unfair in your favor. Your current traction or plans to get more traction. That slide's content is hugely industry-specific. However, the typical requirement is that you should show your current traction and strategies for development, or if you have not yet, show your plan to reach your targets. Again - speak in numbers. Your Team. Introduce investors to your team. A couple of sentences per each of half a dozen or so key people are enough. Don't talk about hobbies and personal life - only skills, experience, and team cohesion matter for now. How much are you raising? Explain how much money do you need and how it will be spent. Be ready to explain every point. A typical question is something like, "How much will you pay this specialist per hour?" Wait, but here only 10 slides are listed! Exactly. Sometimes some points (Product, for example) require more slides to cover. So 2 of 12 are reserved for this purpose. Does it look like creating a good Pitch Deck is quite hard? Well, it is. Don't worry, we'll help you. We've prepared a series of articles that explain every point in detail. Also, you can contact us, and we will help you to build a fundable Investor Pitch Deck.
There is a massive gap between what startup founders understand and what investors usually mean in the process of pitching. To bridge the gap Koalition team constantly creates content, like our Youtube New Leaders Show for example. And today in a humorous way we want to translate some of the common responses that VC gives startup founders and the meaning behind them. Ready? Let's go. The response: It's not a fit for us.
How to read: Son, I don't get whatcha doing..and it looks like you have no idea either. The response: We will pass on this opportunity. How to read: I don't see enough market and you don't look like people who can create it. The response: Let's stay in touch. How to read: Right now this seems like a pass, but if somebody famous invests I'll follow blindly. The response: Send me your deck. How to read: I think it's not worth my time, so I'll forward it to my analyst and he/she will look when get some spare time. The response: Keep me up on your updates. How to read: Keep me up on your updates, for God's sake! Founders and VCs are often driven by different intentions and are coming from completely different backgrounds. It's not a surprise you can always get lost in translation, but we hope our content will help you be more confident and successful in your fundraising! Subscribe to receive updates.
How AirAsia will Become a One-Stop-Shop for Travel
Sharing the corporate venturing insights from Joanna Ibrahim from RedBeat Ventures – VC arm of AirAsia. Anastasia Green, a partner at Koalition, asked Joanna how the startup can get funding, how much to count on, which problems are they currently solving and where we'll see AirAsia in 30 years from now. Joanna, you are flying between the US and South East Asia, scouting startups, talking internally to the team, and identifying investment priorities. Could you please describe how does the innovation ecosystem work in AirAsia? Who are the stakeholders, and how can the startup approach it the best way? Innovation in AirAsia happens on multiple levels, and it starts internally. While interacting with the vendors, the staff comes up with ideas on how to improve operations, and those ideas go to the management. Or sometimes it can be top-down, where the management comes to push innovation through the organization. In the last two years, we set up a subsidiary that acts as a corporate venture. Now we are going out to source new ideas from the market and bring it back to the organization. In the process, we meet with the employees from different teams to understand what are their challenges and plans. Having that understanding, we go out and source for specific solutions that could meet any of the internal requests. Since I've been with the organization for quite a while and know the operation well, we would work with startups to test ideas and see if they can stretch their minds to find how to apply their applications to our scenario. Once we see a fit, we will sell these ideas or solutions to the relevant internal stakeholders and make sure there is adoption and follow through. What tools and channels do you use to find startups? We've been putting ourselves out there quite aggressively in the last two years. We attend conferences; we attach ourselves to the universities. We also work closely with the embassies representatives in Malaysia because they tend to have access to the startups in their respective home countries that they can introduce. We work with the Australian Trade and Investment Commission, Department of International Trade of British High Commission, as well as theFrench Trade Commission. They also have a mission to bring startups to Southeast Asia. We have limited resources, so we try to be smart. We work with accelerators, for example, Plug&Play and 500 Startups, and other VCs and Corporate Ventures / Corporate Innovation teams. Sometimes it's hard to squeeze in all the events in our calendar. But we have to be out, selecting what's relevant and we don't want to miss out if there's something good. Among all the channels you source your deals from, which ones you find the most effective? The accelerators have an extensive network. They are close to the startup ecosystem and it is in their mandate to promote the startups in their programs, so they would be a good party to work with. But rather than having startups being pushed to you, what is more, important is to define what you really want to look at. By doing so, your search is more targeted and you can be very efficient in your interactions as well. RedBeat Ventures being only in our second year, we are still learning In the first year we were very generic. We were open to anything. Right now, we are more specific in our search criteria. We look to value-add our ecosystem and our portfolio. So, if you offer us something that we already have or can build ourselves, the chance of a meaningful outcome is very low. We also take time to spend time to make people understand what are our pain points, where we are coming from, and often, we curate the list of startups before we schedule the meeting. What kind of startups are you looking for? Is it mostly a partnership, something that you can integrate inside of the company, or it's more venture investments? When we go out and meet people, we look at them through three categories: commercial, partnership or investment. Most common, we would be looking for startups that we can connect to the organization for a commercial deal - startups that can provide a solution to a particular pain point we have. If the startups fit nicely with our strategic vision and the impact of the commercial deal is huge for us, then we will take the discussion up a notch to explore more strategic collaboration or even a potential joint venture. And then there's an investment. We try to separate investment decisions. There is a dedicated team that looks into this. When we consider a startup for investment, it has to pass our investment criteria, especially on our financial expectations. Once we believe that the startup has growth potential and the ability to generate the return profile we are looking for, then we will start the investment negotiations. What would be the criteria for the startups that are ready for the investment? Many CVC (Corporate Venture Capital - auth.) firms are very strategic – they only invest in strategic matters. For us, it's a financial focus first. We want to make sure that whatever we invest in, we'll get a return. For us to invest in a startup, show us your growth and financial potential first. Then, we look at strategic potentials. Where possible, we like to give capital to startups and also be in the position where we are able to help them grow - it is our way to mitigate our investment risk. Strategic potential does not necessarily mean we have to use the product, but we have the tools and resources required by the startups. If a startup requires a product-market fit validation, they can do a proof-of-concept with us and get direct feedback on how they can improve their offering. For example, for early-stage IoT or asset tracking startups, they can conduct testing with us and our engineers can work together to make their product development better. If a startup requires customers, we look at how AirAsia can provide traffic to their platform, or if a startup wants to create awareness, we can work together to leverage AirAsia brand and marketing campaigns and so on. What would be the process and time necessary to decide on an investment deal? The process is straight forward. Talk to us and send us your pitch deck. The difficult part is trying to get a slot to talk to us. Timing is essential because as a CVC, we have our corporate hat to wear as well. There are times in the year where we're busy with other corporate activities, which means investment work will take not be the top of our priority and therefore, deals that come in would go in the "can we look at it a little later" pile. For example, right now, we have a board meeting coming up and we would be busy preparing for the board meeting, so we can only look at startups once the meeting is over. The best time to approach us would be in the mid to end of the quarter. Do you have a strategy for the number of deals you have to make per year or it just depends on what you're seeing on the market? Right now, we are still in the midst of raising our fund and it hasn't closed yet. So, any investments we make would be on balance sheet and we would be selective - more skewed towards strategic. Once our fund is up and running, then we will have a ticker where we need to invest within a specified period. But, for now, it's very much opportunistic or whatever we feel very strongly about. Could you share what's the average check that startup can count on from AirAsia? We typically disburse anywhere between half to one million. Depending on the stage and terms, we may consider to increase it to two million. Which areas AirAsia is looking to innovate, and problems are you trying to solve? When it comes to investment, we have a specific mandate. We look at consumer tech in the travel and lifestyle space, logistics and fintech. We also look at the technology enablers for example in the area of artificial intelligence, machine learning, augmented/virtual reality, drone technology and so on, as long as they have a use case within the three verticals of interest. We look at startups between post-seed to series B. Our management typically likes series B, being more stable and more convincing. However, as part of the investment team, we would like to go slightly earlier, where valuation is cheaper and the potential upside is massive. We like when the company already has an MVP, ideally with a few ongoing proofs-of-concept. We believe this is the point where we can add the most value to the startups. We are not a technology company, so we would leave the product development to the founders. But once they have a ready product to go to the market, we can work together to refine the business model and scale-up. If you're interested in coming to South East Asia and have no idea where to start, we would be a good landing pad because our business is here. We not only exist in one country but we have home bases in Malaysia, Thailand, Indonesia, and the Philippines. Our network covers over 150 destinations. We have customers and distribution channels spread across the region. We know the market, and can help you navigate the cultural differences and the stakeholders within the countries. What are some of the most promising technologies you see in the travel and lifestyle industries? We are always on the lookout on how we can improve our revenue streams, reduce cost and improve customer experience. There are a lot of interesting things in the AI and machine learning space especially in the area of personalization, pricing optimization, and in-destination activities. To have a good recommendation and revenue management engine, it's all about how best we can use the data. In addition to that, there are also a lot of potential applications in the area of IoT and AR to provide better services and improving efficiencies. Have you stumbled upon a radical technology or innovation in the space that you think will work? Well, if you talk about radical, to what extreme would you want to discuss? (laughing - auth.) I saw companies working on supersonic aircraft or electrical aircraft. That's extreme. When we see startups in that spectrum, they really stretch our brain - a bit on the moonshot side. If we look at regular operations, technology and innovation do not necessarily need to be radical. It is about their adoption from one area of application to another, and how they improve over time. For example, revenue management is nothing new. It is quite straightforward - using data to forecast demand and determine the right pricing level that can maximize revenue potential. However, you would be surprised to know that there are only a handful of companies that does this specifically for airline tickets. And how good they are is very much dependent on how complex their prediction algorithm is and how many input variables they can accept for forecasting... We think the adoption of voice AI technology will be huge. Most applications will be voice-activated. Also, one area worth nothing is the application of humanoid robots in the service industry. It is amazing what they are designed to do these days and how closely they resemble a human. The solution is not cost-friendly right now, but it would be interesting to see the level of adoption once the cost is reduced. Given the futuristic look, where do you think AirAsia will be in 30 years from now? We are already pivoting today. Right now, 80 percent of our revenue comes from aviation. The business of transporting people from point A to point B and 20 percent comes from ancillary businesses. We want to flip this. We are starting to embark on a journey where we expand our scope of core business not to only cover the aviation, but the entire travel and lifestyle ecosystem. So, in about 20 to 30 years from now, the AirAsia brand will be synonymous with a one-stop travel and lifestyle platform. The brand promise will not just be about being the lowest fare airline anymore, but about the experience, the convenience, and the seamless customer journey. Go to AirAsia to get inspired, plan your trip, book your flight, hotel, and activities, experience the trip, shop and share your reviews. We are going to be much more customer-centric. Since the lowest prices are given these days; the competing value in the future will be the experience itself. To get introduced to Jonna from AirAsia Corporate Ventures, please send your blurb and Pitch deck here.
How Adidas Ventures is Driving Innovation to the Sportswear Industry
Anastasia Green, Partner at Koalition, interviewed Milos Ribic, Director at Adidas Ventures. Being on the frontline of innovation, Adidas launching shoes into space, introducing recyclable materials, and so much more. We asked Milos about the trends and challenges of the sportswear industry, opportunities for the startups, and where Adidas will be in 30 years. Listen to the full conversation in our podcast series. Adidas is a large company with several innovation departments. Could you please help us understand how startups can best approach Adidas? It depends on the startup's model or the service they're creating. The number of businesses under the Adidas group is extensive: ranges from manufacturing to the digital experience. Each entity has its priorities and the horizontal venture system. We're looking for ways that can help us scale and exponentially grow specific priorities for the brand. Today that boils down to two buckets. One is around materials innovation. Since the brand's strategic priority and belief is sustainability for the world, we are driven by the success of using recycled plastics for product creation. We're looking for new materials that don't use natural resources or have very minimal contact with them. We want to maximize sustainability impact and therefore use venture as a tool that helps to scale the volume. The second focus is around engaging younger consumers and, more broadly, the sports ecosystem. Today, the attention of any consumer is a luxury. Finding the right method that mobilizes consumers or creates an engaged community around sports is very much needed for all brands, including Adidas. If the startup is doing product innovation, where should they go? Where do they send their Pitch deck? If you're looking at the product as a material, then the process first starts with understanding the product properties and sending the sample to our team to test. When it comes to sustainability, there are creative startups with resourceful data that are reaching out to the Venture team or the R&D team directly. If it's material for the footwear or apparel, it's better when the connection is established directly with the R&D team because they have the set up to test the properties of the material to determine whether it's sufficient and can do what it promises. Also, to check whether we can create products out of it in the desired volumes, that is in line with the sustainability priority of the brand. Many steps come after that, but the Venture team is not part of discussions in the beginning. It's engaged once mapping and the cost analysis is being done, and the early-stage feasibility study has been completed. What about digital solutions? Where do I go If I've built the most engaging app for Generation Z? First of all, if it's the most engaging app, then Adidas will know about it already! But if it's an app that is doing something related to sports or fashion, or engaging new audiences, founders can approach the Ventures team or Fashion team. Some teams are focused on fashion alone. They'd like to do a pilot to see if this app is going to engage Adidas consumers or a specific demographic as strong as it claims. Same for the sports side. The Ventures team helps to create a potential pilot and test if we can make a better outcome for a specific fan group within a particular sport. What are you looking for in startups? The preference for the startup in the material space is to be running a technical process from the start, being able to go first with the properties of new material, and then potential use cases. Through that pitch, the successful way to go forward is to stand out with the technical background of the team. It can help more than just focus on sustainability. When it comes to fan engagement, it's the ability to start with metrics. For example, when it comes to a new area, like Generation Z, we can determine a rational WHY particular "Gen Z" population likes the specific product and engages with it. Metrics will convince us that the team has thought through the product and how to determine its demographics best, and they have likely done several pilots. Also, we see that second and third-time entrepreneurs are much faster in the ability to create a product and create a fast engagement with it. We look at both metrics and speed. It sounds like tough criteria for the startup. What's in it for them? The harder the beginning is, the greater the pay-out. After going through those initial stages, you can unlock strong revenue potential for a startup. Our job on the Venture side is to reach revenue point, not only for the brand but also for the startup. Creating that very known output that startups can expect. Most of the start-ups are afraid to collaborate or get funding from the corporate venture. Can you elaborate on what they can be afraid of, and what can be reasonable? Every corporation has a different model, and I can't comment on all of them. In a space like pharmaceutical, biotech, even material science, there is a lot of IP that startup can't scale without a bigger partner. In some instances, the growth of AI applied in replacing processes enables creative ways for startups to grow and not to work with the corporation. They can be good enough on their own. I can understand why they can be resistant to it. In consumer goods, I haven't seen that case yet. In most consumer goods, having a touchpoint with more than just a vendor is powerful, and can be extremely beneficial for a startup. In many ways, it depends on a relationship that is being built. It certainly creates a better opportunity for startups to raise additional funding, to hire other teams, and to use it as a strong case to recruit more customers, and minimize the sales cycle down the line. Since consumer goods usually is a high cash flow industry, the speed at which startup can crack into that cash flow and be a part of it even in the tiny time scale creates a massive advantage today. Does that mean startups get a chance to bring the product to the consumer faster with the help of big partners like Adidas? What are the potential challenges? We've done many cases successfully, but in many cases, after rounds of pilots and limited releases, we decided not to pursue the deal. Big brands do spend quite a bit of money on numerous segments that touch consumers, because they can, and because it's essential. And sometimes, it's too high a requirement for a small. If the startup can't bring additional resources when we're not yet open to be a part of a funding round, the challenge may arise. Sometimes it's a technical challenge when the solution didn't meet our minimum requirement or scaling of the product didn't work. Can you describe the nature of your work as a Corporate VC? What are the success criteria, and what are the biggest challenges? I would say the success criteria is that both startup and, in our case, the brand can create a new revenue as a result of the partnership. That's an absolute win for everybody. But that also creates a challenge for the startup. The sales cycle can be extensive, and working in a bigger entity internally requires following our process. When, on the other hand, traditional VC can write a check faster. Not that we can't do it, but since the brand has been around for seventy years and especially the past ten plus, we had a chance to create a vast portfolio of all kinds of consumer engagements. Some have worked, some haven't. So many learnings came to place. We like to test things and see the effect of the product on our consumers. If we'd go forward with that solution, then we understand how or where else we want to deploy it. After that, we'd come and invest. This process takes time, and that can become a challenge. This approach doesn't line up with the speed at which traditional VCs can write checks; there're different incentives in line. Can you talk about the industry? What are the technologies looking like the most promising ones? The common thread is that if you look at Generation Z and younger, attention span is being smaller. Attention turns into a luxury, something that everybody strives to win, especially on a consumer goods side. Another trend is that they're questioning how and where the cloth comes from, that can be footwear that can be fashion. "Gen Z" uses fashion as a way of expression and a way of expressing their own beliefs and what they stand for. In retrospect, it's a very positive trend. When it comes to the technologies and materials side, this trend is driving us to test more, to look for more materials that don't utilize natural resources. We don't want to victimize the use of natural resources and we want to be as fast and efficient as we can. On the sports side, we see the whole term of "sports" has now expanded to include even esports. That took an important notice from the traditional news sports entities, and everybody is trying to see what they want to do with it and how. Some are more aggressive than others. That's a trend that I think will be growing and it's a pretty exciting one because it's truly global. Do you see any development of digital goods for sports brands? Quite a bit! I think it's a big matter within fashion, luxury fashion, and sports. There's a trend for people only to own the digital version of a good that they either can't afford or can't have access to, but with digital goods now, they can. It's interesting because that creates more ownership. For the brands, it creates an opportunity to see and understand how consumers interact with such products. There's much learning on both sides and much exciting progress! I think that is a rising trend, and it's something that I think will even further connect Generation Z and create even greater social inclusion. What is the most radical innovation you've stumbled upon recently in your industry that you think will work? The most recent that I hope will work is enabling professional and "amateur" athletes who are playing in college-level, to be able to monetize themselves as brands. I think that offers exponential growth that hasn't happened before. College athletes, equally, men and women, are powerful revenue drivers for respective schools and sports programs they represent and play for. Now they may have an ability to take part in that new revenue creation or even be able to drive it themselves. I believe it's beautiful and step in the right future. On a professional side, athletes being able to so-called tokenize their contracts and allow anybody to invest and engage with them. I think that's the choice that athletes should have, they should be able to create ownership in what they do. In 2013, Adidas changed its slogan from award-winning "Impossible is Nothing" to "Adidas is All In." If you would give, let's say 20-30-year shot, what do you think the company will stand for? I think to make the world as environmentally cleaner as much as possible, minimizing the waste that comes from fashion, using more recycled materials beyond plastic — completely getting off of any virgin or natural resources — showing consumers how it's possible. Introducing a new way of running the business that I hope will spread across other industries beyond just fashion. There's a lot to be said around gender equality and social inclusion as a whole. Use sports as a connecting thread beyond borders, across many cultures all over the world. And be able to show that, with as an example of equal pay, female athletes can also be equally paid across continents, across the sports. To get introduced to Milos Ribic from Adidas Ventures, please send your blurb and Pitch deck here.