RUBY NATION - 2014 Sean Schofield @uberzealot 

RUBY NATION - 2014 2 About Me !   18 Years Programming Experience !   Creator of Spree !   CEO of Spree Commerce !   Currently Playing the Game 

RUBY NATION - 2014 3 45,000 STORES worldwide…and growing TOP 100 OPEN SOURCE PROJECTS worldwide out of over 10 MILLION 3   

RUBY NATION - 2014 4 About Our Investors !   We’ve Raised $6.5M !   Investors on Both Coasts !   They know how to play the Game 

RUBY NATION - 2014 7 When you play the game of startups, you either win or you die. There is no middle ground. 

RUBY NATION - 2014 8 Why Call This a Game? !   There are Players !   A Distinct set of rules !   Winners and losers 

RUBY NATION - 2014 9 Who are the Players? Founders Investors Employees 

RUBY NATION - 2014 10 Let’s Define Winning !   Winning == Money !   Survival !   Exit 

RUBY NATION - 2014 11 Winning == 10X Return 

RUBY NATION - 2014 12 How do Investors Win? !   Investors Have Investors (LP’s) !   They Want a 20% Annualized Return !   That’s Works out to 3X of Invested !   Investing Large Sums !   Shares are not Liquid 

RUBY NATION - 2014 13 VC’s Need Their Cut !   Management Fees !   2% Each Year !   Fund Lasts 10 Years !   20% of Fund Goes to the GP’s 

RUBY NATION - 2014 14 Then There’s The “Carry” !   VC’s Keep a Portion of the Gains !   Typically 20% (Sometimes Higher) !   This is After the Management Fees !   Sometimes There is a “Hurdle Rate” 

RUBY NATION - 2014 15 Finally There are Losers !   Some of the Companies “Go to Zero” !   Others go “Sideways” (1x-2x Return) !   Winners Need to Offset the Losers 

RUBY NATION - 2014 16 The Math Total Invested $100M Investment Return $350M Carried Interest ($50M) Fund Return (3X) $300M Total Invested $100M Management Fee ($20M) Actually Invested $80M 25% Failures (0X) $0M 25% Sideways (2x) $40M 50% Success (7.7X) $310M Total Return (3.5X) $350M 

RUBY NATION - 2014 17 Some Examples 

RUBY NATION - 2014 18 Hypothetical Company Stockholder Percentage Founder #1 27.5% Founder #2 27.5% Investors 30% Option Pool 15% $10M Investment for 30% Plus 15% Option Pool 

RUBY NATION - 2014 19 Small Exit $20M Sale Assuming, 1x Liquidation Preference 

RUBY NATION - 2014 20 Small Exit Stockholder Payout Percentage Founder #1 $4M 20% Founder #2 $4M 20% Investors $10M 50% Employees $2M 10% $20M Sale Assuming, 1x Liquidation Preference Founder and Employee Numbers Rounded for Simplicity 

RUBY NATION - 2014 21 Middling Exit $80M Sale w/$10M Invested for 30% 

RUBY NATION - 2014 22 Middling Exit Stockholder Payout Percentage Founder #1 $22M 27.5% Founder #2 $22M 27.5% Investors $24M 30% Employees $12M 15% $80M Sale w/$10M Invested for 30% 

RUBY NATION - 2014 23 Big Exit $19B Sale w/$58M Invested for 35% Let’s Change the Assumptions a Bit … 

RUBY NATION - 2014 24 Big Exit Stockholder Payout Percentage Founders $9.5B 50% Later Investors $6.65B 35% Seed Investors $950M 5% Employees $1.9B 10% $19B Sale With $58M Invested 

RUBY NATION - 2014 25 Does That Ever Happen? !   Founded in 2009 !   $58.3M Total Funding !   Acquired for $19B !   They Won The Game 

RUBY NATION - 2014 26 Amazon 

RUBY NATION - 2014 Sean Schofield @uberzealot [email protected] Still Want to Play the Game? You Here