Coller Venture Review Review Coller Venture Coller | December 2019 Venture Review Coller School of Management Tel Aviv University December 2019 Venture Policy and Management New Venture Creation in the Gig Economy Deep Innovation Blockchain – for Better or Worse? Virtual Roundtable University-led Entrepreneurship Trends in Venture Opportunities in the Investment Future Industry Analysis Fashion Technology Letter from the Editor oller Venture Review, the flagship Bridging the dialog between theory and journal of the Coller Institute of practice is particularly significant at a Venture at Tel Aviv University, time when action-oriented entrepreneurs C relaunches with this issue in a must rapidly adapt from the field. This new format. To start, we retain our core presents a rare opportunity to develop focus on bringing together theory and generalizable new insights and feedback practice. We believe that fostering the loops. The imperative is even greater dialog between academics and practitioners when one considers that the substantive is critical to successful and sustainable outcome we seek to address – successful new venture creation. It broadens our and sustainable new venture creation – can perspective and the range of views we can affect life-altering fields including health, integrate into a new synthesis. In its most education, food, agriculture and many others. applied perspective, it helps us engage This is the place to thank Leslie Broudo in new ways of thinking related to the Mitts, our Managing Editor, for her endless conceptualization, financing, and execution efforts and dedication, Josh Lerner, our of innovation and new venture creation. Associate Editor from Harvard Business While our core focus has remained consistent, School, for his insightful comments our approach to tackling the content has and suggestions and Tal Sossover, our evolved. In each issue, starting with the editorial assistant. Special thanks to all our current one, we address four sections: Venture contributors, colleagues, and collaborators Policy and Management; Deep Innovation; worldwide for their dedication and vision. Trends in Venture; and, to support future While the results of our work will not be generations of researchers, Industry Analysis. measurable in weeks or months, we hope Each section includes the perspective this first step can help guide our future. We of both academics and practitioners. welcome any comments and suggestions from In addition, we also report insights from our readers that will help us improve the value the perspective of a Virtual Roundtable, to of Coller Venture Review to its readership. bring together global leaders in a specific Sincerely, field of interest – in this case, university- led entrepreneurship. We expect that future issues of the Journal will include case studies to help isolate best practices, and a reader’s digest of outstanding articles in the fields of entrepreneurship, Moshe Zviran innovation and new venture creation. Editor-in-Chief 01 Coller 4 56 92 Venture Policy and Management Virtual Roundtable Industry Analysis Venture New Venture Creation in the Gig Economy University-led Entrepreneurship Fashion Technology Review 7 3 Steps to Build a Labor Market Freddy Boey 94 The Impact of Technology on for the Gig Economy Deputy President, National University of Singapore the Global Fashion Supply Chain Diane Mulcahy Anjani Jain Jacqueline M. Jenkins Author, The Gig Economy Deputy Dean, Yale School of Management Executive Director of Strategic Planning and Innovation, Fashion Institute of Technology Jonathan Levin 14 The Future of Cities in the Dean, Graduate School of Business, Stanford University Gig Economy Stephen Spinelli Carmen Ferrigno President, Babson College Vice President Communications, Saint-Gobain Corporation Kar Yan Tam Dean, The Hong Kong University of Science and Technology 23 The Challenge Regulating Moshe Zviran Big Tech Platforms Dean, Coller School of Management, Tel Aviv University Eric K. Clemons Professor of Operations and Information Management, The Wharton School, University of Pennsylvania 77 Bringing Entrepreneurial Theory to Practice in the Classroom Michellana Jester Lecturer and Course Faculty Lead, MIT Sloan School of Management 32 82 Deep Innovation Trends in Venture Blockchain — for Better or Worse? Opportunities in the Investment Future 35 Blockchain Revolution Without the Blockchain? 85 Democratizing the World of Hanna Halaburda Venture Capital Associate Professor of Technology, Operations and Statistics, Jonathan Medved Stern School of Business, New York University Founder and CEO, OurCrowd 44 The Darker Side of Blockchain Nouriel Roubini Professor of Economics and International Business, Stern School of Business, New York University 50 Blockchain as a Solution to Cyber Threats in the Smart Grid of the Future Jacob Mendel Head of the Cyber-Security Track, Coller School of Management Coller School of Management, Tel Aviv University Tel Aviv University 03 Overview iv ur Trends in Venture section addresses change 85 in a new venture creation over the last twenty- Democratizing the five years. This issue considers a visionary’s practical perspective on leading change and World of Venture Capital O sharing wealth. Jonathan Medved Jonathan Medved, Founder and CEO of OurCrowd, Founder and CEO, OurCrowd considers not global risk but ways to reduce risk for individual investors. Medved’s democratization of the venture capital investment process helps us to consider how private and traditionally hard-to-access financial Trends in Venture markets can be made accessible equitably, and how even small investors can participate in a future of Opportunities in the transformative and profitable new venture creation. Investment Future 82 COLLER VENTURE REVIEW 83 Democratizing the World of Venture Capital Jonathan Medved Founder and CEO, OurCrowd ince its inception in 2013, OurCrowd has been committed to democratize access to venture If growth opportunities S capital while maintaining best venture practices for a new class of investors. have shifted — not all the The opportunity and time for OurCrowd’s way, but to a substantial innovations are driven by a number of extent — into private factors. These include consistent high returns in the asset class, which nevertheless have markets and ordinary benefitted only a small subset of investors; investors don’t have increasing difficulty in accessing the best deals, as top deals stay private longer and access to them, that’s not then IPO at extraordinary valuations. On top good… It’s hard to give of the above, all but the most sophisticated investors have not been granted standard individuals access to private economic preferences, which are critical markets. Can we have a to offset risk and preserve upside. fund structure to ensure Opportunity and Differentiation that ordinary investors are Compared to other seemingly similar getting the same deal? “crowdfunding” platforms, the OurCrowd platform is distinguished in a number of ways. Testimony to its vision and success in education, it currently has 40,000 accredited investors Jay Clayton from over 180 countries who access highly Chairman US Securities curated individual venture deals and venture and Exchange Commission capital fund. The emphasis is on investing September 19, 2019 relatively large amounts from aggregated individuals and institutions via an LP/ GP structure. Median check size is $3.5M per portfolio deal, with many companies raising amounts beyond $10M. • 84 COLLER VENTURE REVIEW 85 OurCrowd has already invested in over 200 Democratizing Access to Venture JUMP Bikes – aquired portfolio companies and 19 funds, and has had Investing – and Offsetting Risk by Uber in April 2018 36 portfolio exits to date, including leading Increased companies such as Beyond Meat (BYND), Venture capital as an asset class has performed JUMP Bikes (sold to Uber), Wave (sold to well for its investors over the decades, in commitments to H&R Block), and Argus (sold to Continental). fact generally outperforming all other asset classes. And yet, it has been the most esoteric, venture capital OurCrowd often leads its deals; invests most inaccessible asset class even for many and the formation alongside leading venture funds; gets large institutional investors. The number of Board seat representation in a majority institutions that have significant commitments of mega funds – of its deals; purchases preferred stock; to venture is actually rather limited; accredited like the $100B and receives anti-dilution protection, and ordinary investors can only dream. Yet, pre-emptive rights and liquidation particularly as fast-growing companies stay Softbank Vision preferences – just like traditional private longer and seem to take forever to Fund – have venture investors. go public, it is clear that the need to open up The model has proven successful thus access to this closed club of venture investing driven dramatic far. OurCrowd has been recognized by is becoming imperative. The question is growth in venture Pitchbook since 2014 as the most active how to execute on this “democratization” venture investor in the highly competitive in a way that will both benefit the venture capital investments Israeli venture market, achieving this ecosystem and the companies it serves, globally status only one year after its launch. as well as provide compelling returns and protections for a broad range of new investors. OurCrowd – and the idea behind it – might Yale University Endowment, a leading These increased