This is going to be BIG.

OCTOBER 12, 2020

Right on time, I’ve got a company from my first fund doing a roadshow right now that could net a big exit by the end of the year. I took my last LP meeting the first week of March and clearly, I didn’t close anyone that I had met with at that time. Not everyone produces LP money with the snap of a finger—not even Alan Patricof.

LP 136

LP Technical Review Software Review Valuation 136

David Teten

NOVEMBER 23, 2020

They provide retail clients with sophisticated risk management tools that previously only ultra high net worth investors could access. . I was previously a Partner at two different VC firms, neither of which had any contractual LP mandate to invest in diverse companies. Net Promoter Score from Founders we back. Firm revenues.

Venture Capital 60

Venture Capital Partner Technical Review Cofounder 60

Both Sides of the Table

JANUARY 5, 2010

If your idea is so amazing that it warrants my hard-earned angel money or the money of my LP investors from our fund then why should I take a risk on you if you won’t take a risk on yourself? Partners in VC funds only wanted to fund entrepreneurs who had a certain percentage of their net worth tied up in their venture. Why should I be?

Entrepreneur 293

Entrepreneur CTO Hire South America Salary 293

David Teten

DECEMBER 3, 2019

Tim Friedman, Founder, PE Stack , said, “If I could offer one piece of advice to today’s managers, it would be to take the time to understand the demands of the modern institutional LP. We are also seeing technology evaluation as an increasingly important part of LP operational due diligence.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

View from Seed

OCTOBER 29, 2014

The nature of LP investors can vary widely, but the bulk of the capital in the VC ecosystem comes from large institutions like pension funds, endowments of universities and hospitals, charitable foundations, insurance companies, very wealthy families (aka family offices), and corporations. Advisory Firms. Why Write About This Now?

LP 335

LP Private Equity Institutional Investors Venture Capital 335

Agile VC

OCTOBER 29, 2014

The nature of LP investors can vary widely, but the bulk of the capital in the VC ecosystem comes from large institutions like pension funds, endowments of universities and hospitals, charitable foundations, insurance companies, very wealthy families (aka family offices), and corporations. Advisory Firms.

Venture Capital 279

Venture Capital LP Private Equity Institutional Investors 279

Both Sides of the Table

MARCH 12, 2017

Again, I suspect they would be more concerned today about net neutrality, cyber security, immigration and trade more broadly. Below is the full deck with a lot more data and insights and if you missed the recently published LP Survey Results you can find them here.

Venture Capital 277

Venture Capital Artificial Inteligence LP Valuation 277

David Teten

JUNE 1, 2011

To maximize value and sale price, wider net is better There is a lot of un-invested capital sitting in funds and outside-in it is hard to tell the internal dynamics, so casting a wide net increases chances of a good outcome. Zubin Avari, Charter Oak Equity LP Christopher A. End up approaching 20-30 strategic and 50 financials.

Private Equity 122

Private Equity Deal Flow Equity Developer 122

Feld Thoughts

MAY 28, 2014

The advantage, for all the investors (the VCs and their LPs), is that $100m gets put to work as invested capital, rather than just $85m. Our view as a firm is that a successful VC fund has a net return of at least 3x to the LPs. That means that if an LP invests $1 in the fund, they get back $3 over time.

Management 150

Management .Net LP Venture Capital 150

VC Adventure

MAY 5, 2022

Traditionally LPs have viewed this as positive. The fund is investing profits, the LP is paying fees on what effectively becomes a smaller fund (in my example above, if the fund invests 110% of the fund, LPs were actually paying a 1.8% management fee).

IRR 116

IRR Metrics Valuation LP 116

This is going to be BIG.

SEPTEMBER 19, 2012

Several GA members have made introductions for me to high net worth and family office investor contacts. One investor, who had previously been successful launching a NYC tech company in the late 90's took one of my career classes at GA. Another GA community member introduced me to the team at KEC holdings.

LP 112

LP New York City New York Chad 112

Hunter Walker

JANUARY 17, 2019

It’s pretty basic but is meant to give managers (and their potential LPs) a sense of how many companies will be in the fund, ownership targets, dilution assumptions, reserves strategy, exit expectations and ultimately, a target return for the fund. This exercise is also known as “let me show you how we get to 3-5x net.”

Portfolio 104

Portfolio Forecast Dilution LP 104

Both Sides of the Table

OCTOBER 14, 2015

I spoke at Michael Kim’s excellent annual Cendana VC/LP conference today. ” It goes like this: What is your net burn rate? Here’s my take away. This will be seen as a watershed moment in the wake-up call and rationalization of our industry. What is your cash balance?

Burn Rate 150

Burn Rate San Francisco Private Equity LP 150

Hunter Walker

APRIL 4, 2014

Part of our presentation will be portfolio financials, which, because we’re relatively new, aren’t exceptionally volatile (LP speak: most of our investments are still carried at original value since no additional fundraising has occurred). high net worth individuals. family offices. other venture/private equity shops.

San Francisco 100

San Francisco Private Equity LP Syndicate 100

Both Sides of the Table

JUNE 8, 2014

The problem that I’ve seen historically in cities like Los Angeles, San Diego or Seattle is that their historic high-net-worth individuals didn’t come from the tech startup world. Our fund has more interest from potential LP investors than our fund needs. Money is the easy part.

Silicon Valley 390

Silicon Valley Kansas City Startup Venture Capital 390

Start Up Blog

APRIL 29, 2013

The net effect of all this, is that being authentic is now becoming a cost of entry, rather than a point of difference. Maybe it is the soft crackle of an LP record that has enabled vinyl LP sales to increase year on year for the past 19. But the excitement of a simple authentic brand is waning somewhat.

Uruguay 123

Uruguay Technical Review Vertical Las Vegas 123

The Equity Kicker

JANUARY 19, 2016

7/ Net/Net: VC is a hard f **g business but simplification in press makes it seem glamorous & easy – almost swashbuckling. NotGlamorous. — Mark Suster (@msuster) December 14, 2014. I’ve seen Mark post a few versions of this tweet over time and wanted to write a post about it.

Europe 60

Europe IPO LP Venture Capital 60

Babbling VC

JANUARY 7, 2011

Net returns may have been in line as many EU VC's like to argue but the sums going in and coming out paled in comparison to US deals. Conversely you could blame the LP's (limited partners: the investors in venture funds) and say they are the one's not risking it enough. Unfortunately, all ships do not rise with the tide.

Finance 76

Finance LP Europe Valuation 76

David Teten

JULY 12, 2017

GPs strategically invite trusted [Limited Partners and others] to co-invest, often based on the LP’s ability to add value or when the amount of capital required to complete an attractive transaction is larger than they are able to invest alone.”.

Syndicate 60

Syndicate Syndication Institutional Investors LP 60

Both Sides of the Table

APRIL 3, 2010

As a reminder, VC funds are comprised of money from LP’s (Limited Partners) that include university endowments, pension funds, high-net-worth individuals, insurance companies and large corporations. In a single fund of $100 million you might have 30 difference LPs.

Pre-Money Valuation 226

Pre-Money Valuation Venture Capital LP Term Sheet 226

Hunter Walker

FEBRUARY 25, 2018

One consistent LP complaint I hear about new’ish fund managers is that they forget a bunch of fund construction and portfolio modeling decisions are connected. And to get to a target return of 4-5x net, it means we need to return 5 * $90 million (ie $450m) to our investors. a fellow VC asked me after my previous post.

Product 82

Product IRR LP Seed Stage 82

Genuine VC

OCTOBER 11, 2011

I hypothesized that, “Perhaps a contrarian statement in this environment: but even though there’s been a dip in fund size due to broad economic factors and LP appetite, it wouldn’t surprise me if the truly top firms raise even larger funds over the coming decade.”

Venture Capital 150

Venture Capital Seed Stage Entrepreneur LP 150

Agile VC

NOVEMBER 13, 2012

a VC fund’s entire portfolio in aggregate, net of management fees and carried interest) a good return from an LP’s perspective would be 2.5-3.0x So at a fund level (e.g. typically, which in most cases would to >20% IRR.

LP 154

LP Portfolio Venture Capital IRR 154

Austin Startup

JUNE 26, 2019

Turns out my network (of politicos and do-gooders) is not one of accredited tech investors (meaning they meet income and net wealth thresholds and choose to make investments at all, and specifically in startups). Do you want someone already making $12–17/hour watching your kid to make less (so a LP can make their returns…)?

Silicon Valley 54

Silicon Valley Startup B2C Sweat Equity 54

This is going to be BIG.

JULY 30, 2015

One of the first things I did when I joined the venture asset class as a lowly institutional LP analyst in 2001 was to build the VC fund cashflow model. I'd say no--they're taking money from the same endowments, high net worths and pension funds as everyone else. Just about every analyst who looks at fund investing has built one.

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

thebarefootvc

MARCH 8, 2012

While the initial fund is $120M we will have access to ru-Net’s (the Russian LP) $700M of capital to support growth of portfolio companies and opportunistically invest at later stages where we can add value beyond capital.

Silicon Valley 69

Silicon Valley Ghana Venture Capital India 69

David Teten

AUGUST 21, 2019

Companies Lighter Capital has funded on average have negative 14% net margins.” not because of LP objections or moral concerns, but because the pool of potential M&A buyers is greatly limited. A company with that mindset is dramatically less risky, because it’s not dependent on the financing markets for continued viability.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Startup Lessons Learned

MAY 4, 2021

Or what advice would you give to other CEOs who are contemplating where they should net out on that question? But I'd say, actually now, it's had a net positive effect on our hiring, and we have people joining who just understand what they're getting into, and they understand what the mission of the company is.

IPO 113

IPO Cofounder Technical Review Government 113

K9 Ventures

DECEMBER 10, 2011

If you’re a venture fund outside of the Valley — even if you’re in Boston or New York, chances are you’re going to have to broaden the net. Likewise if you’re an LP, you have to make sure you have reasonable exposure to Valley investments. It’s a simple density/deal flow issue.

Silicon Valley 124

Silicon Valley San Jose Portfolio Cofounder 124

K9 Ventures

NOVEMBER 30, 2008

The money that the GPs and other employees of the firm invest comes from Limited Partners (LPs) — typically the big university endowments, retirement funds, charitable organizations, family offices and high net-worth individuals. The LP perspective. Industry averages for the management fee are expected to be around 2.5%

IRR 48

IRR Venture Capital LP Early Stage 48

K9 Ventures

DECEMBER 10, 2011

If you’re a venture fund outside of the Valley — even if you’re in Boston or New York, chances are you’re going to have to broaden the net. Likewise if you’re an LP, you have to make sure you have reasonable exposure to Valley investments. It’s a simple density/deal flow issue.

Silicon Valley 112

Silicon Valley San Jose Portfolio Cofounder 112

abovethecrowd.com

APRIL 20, 2016

One response from the LP community might be to demand commitments from new funds that prohibit inside-led rounds and cross-fund investing. If you over-fund the industry, aggregate returns fall. Writing huge checks to bloated multibillion dollar VC funds could easily exacerbate the problems that already exist.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

This is going to be BIG.

MAY 16, 2016

Mattermark just posted a short report full of such statements and the former 21 year old institutional LP analyst in me (the job I got my VC start in over 15 years ago) flipped his s**t upon close review. Here's everything wrong with this dataset: 1) Sounds big, but really isn't.

Venture Capital 66

Venture Capital IRR LP .Net 66