EMW/2023

Disclaimer

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 EMW/2023

Keynote agenda

— Lessons from public markets

CET) Crt rd ett —

Coatue Prediction Reality

Resilient economy
but are we out of the woods?

+20%
but market internals more mixed

Indeed!

Correct!

“Year of Efficiency”

AI
Inflation subsiding

Record-low unemployment

European energy crisis averted

End of China’s Zero-Covid

Founder pivot: Year of Efficiency

Dawn of a new technology: AI

Inflation subsiding

Record-low unemployment

European energy crisis averted

End of China’s Zero-Covid

Founder pivot: Year of Efficiency

Dawn of a new technology: AI

Inflation subsiding

Record-low unemployment

European energy crisis averted

End of China’s Zero-Covid

Founder pivot: Year of Efficiency

Dawn of a new technology: AI

Inflation subsiding

Record-low unemployment

European energy crisis averted

End of China’s Zero-Covid

Founder pivot: Year of Efficiency

Dawn of a new technology: AI

Inflation subsiding

Record-low unemployment

European energy crisis averted

End of China’s Zero-Covid

Founder pivot: Year of Efficiency

Dawn of a new technology: AI

Inflation subsiding

Record-low unemployment

European energy crisis averted

End of China’s Zero-Covid

Founder pivot: Year of Efficiency

Dawn of a new technology: AI

S&P 500 Nasdaq
SORSRgrEIRIgEReEI "
(oSIgS elated : 3

Not so fast... ar
Eo A - =

== “Pump the brakes’|

 aE Fagin | Founders Imovation EMW/2023
Public market intemals more mixed: Only tech is rebounding...
> 2023 YTD RotumsbySector
wn

son
©ou,economy stocks weak

wo
-

oe Tech
wn
Industrials & RealEstate. ‘Staples
&Utiities HealthCare Financials Energy

a a
 — agi | Funders novation EMW/2023
... and breadth is narrow outside of the “Magnificent 7”
— $8 500 YTD Performance

CEvesor von GC &

o | OMeta amazon r=sin ;
on
® “Magnificent 7"
account for ~85% of
20% the YTD SPX return!

: 493 Other
Gonsttuonts
aSons ron ozs sors or22 wns
COMUE 35 ESSE ett a oe rerem ee ae
 wicrs RERER Feene | Founders movatn EMW/2023
Economic-sensitive sectors suggest pressures remain

— BeMCndoOl — Rogonal Banks — Tansportaion Stocks ——» Reta Stocks

" = ®» mn =m ow» mn mw mw ow =m =
(CORTUE Smtamareemmtnmetnsmemes Baers noreonSoaea tet e—————— So ote o——— osMn FoeSat Wht UOT
 Aa " EMW/2023
New Market Regime: Era of free money is indeed over!

‘The Rulesof Free Money — 5% Risk Free Rate

vavcmnged Abundance of Growth — Potential for Lower Growth

Bubble Valuations Rational Valuations

Capital Innovation & Execution

Drives Growth Drive Growth

Growth at All Costs Profitable Growth

 Wai ie Fenders Ioavagon EMW/2023
Tech valuations back to earth
—— Tech Public Market Multiples —Software
& Internet
CE ——— we
mmE

- Wh/ =
:
i.

Ps i a
fon
(

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.

b
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:- "---T [ro
ILL oe et etme ete eam {4
nef
ra ox
-“ Software Stocks| *

- ES 06 0 208 29 220 El ES ES o

CORTUE 725 EE
STR FER oner om em he rm et on
 a Le EMW/2023
Growth is harder to come by
SoftwareCase Study
—EMCloud Index(68Companies)
— 5Growth
netNow AFR
- arom

massiveroversal
oo 2007 2018. 2019 2020 221 202 2028
COMTUE 55725 re otim rh et eti to rt
 a rounders ovaten EMW/2023
Market is demanding profitable growth
Intemet CaseStudy —CoatueUS Intemet Universewith $1B+Market Cap
— Share Price Retums.

‘Cumulative Retums Value Recovery

pti Hom Vag
Loupe Honor Ne
sc 20 yore
©) zn ®
Ea rege]tho
pores 1
a
Em
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TORTURE So aesei Somaeam se ettsee ea ams ee aSSR SoroEASA MP UGE EH
 eo EMW/2023
Leading founders pivoted hard
ro i
°o ‘We've cut about 80% of Twitter can operate without
Twitter'sstaff” any employees...?

[oT curioLair
oe ° “Flatter is faster, leaner is better’ Fewer people enables
better and faster execution

a © “Tho most iy portant thing is to.

Keep the most mportant thing Astrongcoolsbeter than
the most important thing” ia

COMIUE 32 EE Sms a et re tro eeie

 Wi th i CR EMW/2023
Strong founders rewarded — Unprofitable Tech still in penalty box
US Intemet Case Study
——> Eficiency Winners vs. Reformers vs. Unproftable Tech
= 2022 2023
The Big Reset “Year of Efficiency”
Earp:Nustrative

aon MagaCop Gye

ooMeta
wo “Refor . Uber
n (Ashopity

oon i

unprottatie
a BE ws a nz a
COTE 5 FETn
EE SB ET em ee
 mm EMW/2023
Market is sensing the beginning of a potential new supercycle
34 amon
EM O@ mcg fsbo 3 aA
oO » NOKIA Goode fencer Huet MYTH, gp
cee et Byasbans 0OMeta @OpenAl

Generative
Avtiicil
Moe Glow Inteligence
Deaap
Prat eve R
wes To)
Networking
vo
Marans

TE par en a
 Today Today
$3T $1.3T

iPhone 4S (2012)
AWS Broken Out (2014)
$300B $150B
iPhone (2007)
AWS Launched (2006)
$100B $15B
Pre-iPhone Pre-AWS
$50B Market Cap $6B Market Cap
 CE EMW/2023

Was NVDA Q2 Eaming Beat the Breakout Moment for the Al Age?
DA F224 Rone =
sno
JansenHuang
rien ® 1, nonceo
I [] Analysts did
4 p not see this
’ y coming?!? “Generative Al is driving
a] exponential growth in compute
presi GomoryGute You're seeing the beginning
a NVDAP/E of a 10-year transition.”
Stockis +200% YTD girezer Aner za: - May 24, 2023 during 1Q earnings
mea ® 85x = 48x
6508 MarketC:
•
SORE]
do we go
from here?
 EMW/2023

The scale looks relatively balanced to us...

tin nn
vee correo
Cen trae

CE

COMUE ees ee eee eeee ere

 EMW/2023
Key Concemn 1: Equity valuations slightly expensive
NT SPX PrE 5 SPXEPS Forecast
= as Ifcorrect, would be an
incredibleshallow %
eamingsrecession 5) |
19x hd
= 0
vo
= ws -
R
EDIE fo @
Procout 5% N
joao
“a mw awe mu ms ae mm Cie am mw wn ms om me
ATE te
 EMW/2023
Key Concem 2: Economy not out of the woods yet
— 10-Year / 3-MonthUSTreasuryYieldSpread

~59% of surveyed
Sik ‘economists believe
on wo will entera
recessioninthe
et 12 months
son
aon

©vtgcurv imarsionsrave
fon
Tesora 060
proceeded 9of thepast 9

erTne sew Mem mes sem em me Sen wea

PR CH seEp
 EMW/2023
Key Concem 3: Magnificent 7 trade at a premium
Wananted dueto Al future?
—— “Magrifcant 7" Market Cap and Proft Contribution to SPX

ra
on
- kot cop
Contation
‘Significant ©
and
po increasing
i premium to
Contribution actual
ha underlying
profits
 EMW/2023
Is it crazy that Tech dominates like oil did in the Industrial Age?!?
—— Shareof the Biggest Sector i the US
P=
© Tech what Oil was in the Industrial Age?

I AroTechprofitpools justasconcentrated
ais thecontrol verof? |g
Technology & |
o> ‘Communications :

Finance&
a Real Estate

Materials
0 1820 1840 1860 1880. 1900. 1920 1940 1960. 1980 2000 2020
 Where Will We Land On This Matrix in 6 Months?

INFLATION

3%

ECONOMY

4.5%
Al could be the @
balloon that lifts :
ipERc ce nen &
through the next _
decade! P Lo
eG
rom | “Al caning the market”|
 EMW/2023

Keynote agenda

— Implications for founders

el —
 Too many unicoms requiring too much capital? EVMWzaz2
> 10YearsAgo > Totay
Unicorns 44 EE 1,350

Approx. Value ~$100B ETT ser | wS2sT

% Public MC 12% 16% | 8%

[Cate tl

CORIUE Sienrestatmmm tesa neSm Seer aoe oor eee omer oe oe Ee —————————"—
 EMW/2023

Investors have many investment altematives today...

Risk-free rate: ~5%

Unicorns Need
GARP: Buy Meta or Google at o to Earn Investor
~20x P/E Capital Against
These Alternatives
Al Growth: Buy NVDA at
~50x P/E

commu ER ASR ee
 EMW/2023
There are fewer exit & financing options today
Us Technology
POCourt
IPOs. 1

Funding REVIT er
Sources 55 unicorns under
of normal IPO
markets

oe ww aw wn we em
CORTE SS SER SAA ee 2m im me
 EMW/2023
There are fewer exit & financing options today
Global Tech MAA Volume8)
ssn

Joss $6208.

Funding RI wn
Sources

Se

201 20 221 2 zed

 EMW/2023
There are fewer exit & financing options today
VCFunding($8)

[20% f=]

soso

Funding
Sources = ane rr] ee
i
3158 J Ut

Fron [RE Toscans

EEE a)
TT eltrioteeepenitent
—
 EMW/2023
Scaled private assets raised & re-priced in-line with public markets
— % Dace fom Peek Vekatons
Food detvery Payment Processing nna

Public ~D DOORDASH [@ square Tencentiii

-66% -76% -54%

. stripe -47%
Private Linstacart SHEIN
-69% Klarna. -85% -34%

commu RB Tr ar 2 Wii
 EMW/2023
But many unicoms not vet re-priced and may never get new capital
— 9% of Unicoms that Raised or Exited by Quarter

’ 2016 Cohort

70¢

- D penfewerexits &
new financings for
on bubble cohort

20%
Tort bi Cort

Uricomshave -38monthsof unwayleft~momentoftruth tlto come

CONTE SET TEE ES SEE EERIE rr ot ms ra 0 mt rer
 EMW/2023

So, what does this mean for founders?

2021: Bubble 2022: Crash Today

Fundraising Feemoney © .
zeownang Funding avalab
© JAIN
Exit Any unicorn Closed Need scale
Options. can IPO © IPO markets. © to IPO

vrs —Can'tire © Hing

MG freeze
© mm Labor market looser:
Invest in every Guta costs Invest in
memes pi © wine © an tt
aver
Key
reac Q) oro © Me
Chiefof Strategy / Head of

~~ ~~ ~~

eB ee ere See
 EMW/2023
How to win & eam path to liquidity?

[SE
(@ Scale

Growth
AI
•