Both Sides of the Table

AUGUST 28, 2009

My competitors from those days STILL love to talk about how much money we raised in February 2000 (get over it already!). Goldman Sachs (an investor in our company) told us we’d IPO within 18 months for $1 billion so not to take any offers. I acknowledge it was a mistake. We were hot. Until we weren’t.

PR 331

PR Software Review Ireland Germany 331

Both Sides of the Table

JUNE 27, 2011

I know because I did this in early 2000. Don’t Blow Your Wad Early – There is a temptation of startups to announce that they’re “first&# at something so they rush to market with announcements. We rushed to market to be first and got great coverage in the Financial Times (we were in London).

Early Stage 380

Early Stage Stealth Marketing Startup 380

Both Sides of the Table

NOVEMBER 14, 2010

And so it happened that between 2000-2008 I was the biggest buzz kill at dinner parties. When the masses start all running one way without questioning “why?&# – and when it defies any logic I can figure out in my head – I call bullshit.

Florida 299

Florida Technical Review San Antonio Los Angeles 299

Both Sides of the Table

JUNE 5, 2011

It was early 2000. I’ve been preaching the “don’t get ahead of your inherent valuation&# message for nearly 10 years. I raised my A round at a $31.5 million post-money valuation with no revenue. That was market. I saw this kind of pricing when I first entered the VC market in 2007.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Both Sides of the Table

MAY 23, 2012

In 1998 there were around 850 VC funds and by 2000 there were 2,300. By 2000 the total LP commitments had mushroomed to more than $100 billion. So of course returns from 2000-2010 were subpar on average for the industry. In 1998 it was 150 million, 1999 250 million and by 2000 it had crossed 350 million.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Both Sides of the Table

APRIL 15, 2010

I don’t believe that search is the only answer in 2010 as it was in 2000. So my guess is that Tweetup needs to go “multi-stream&# (as in Facebook, MySpace, etc.). There is also another inherent weakness. Now you follow people (publish & subscribe) and you click on the links they share.

Venture Capital 271

Venture Capital Affiliate Valuation San Francisco 271

Both Sides of the Table

DECEMBER 5, 2010

In April of 2000 there were fears that the AOL / Time Warner merger would create a monopoly on the Internet. In 1998 the Department of Justice launched an anti-trust case against Microsoft. People feared they were going to have a monopoly over the Internet due to “bunding&# Internet Explorer with their operating system.

Social Network 297

Social Network Networking Internet EC2 297

Both Sides of the Table

JUNE 22, 2011

I know that most people who are close to them tend to deny their existence, as we saw in the great housing bubble of 2002-2007 and the dot com bubble of 1997-2000. I believe a bubble occurs when a market is willing to pay greater than intrinsic value for an asset class. That asset class need not represent the broader market.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Both Sides of the Table

FEBRUARY 27, 2011

But privately here is what I say every week, “I was at the dot com cocktail party in 99-2000. I decided to stop talking about this publicly because I realized that nobody likes to hear this. We were all drunk & stupid. The hangover was sure painful for everybody involved. 2011 is one big cocktail party all over again.

Southern California 267

Southern California Angel Investor Early Stage Silicon Valley 267

Both Sides of the Table

SEPTEMBER 29, 2009

Just ask anybody who was trying to close funding the fateful week of September 11, 2001 or even March 2000. When venture capitalists scale back investing activities it can be very swift and leave many companies that are in the process of fund raising hung out to dry.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Both Sides of the Table

FEBRUARY 8, 2010

My chips were down in late 2000 / early 2001. They did the same with places like Envestnet (now a major success story), UGO Networks (bought by Hearst), Kyriba (left for dead in 2000 and now raising a major round of capital and growing at a fast clip) and countless others. My story briefly. I had 5 investors at the time.

Venture Capital 288

Venture Capital Term Sheet Cofounder Partner 288

Both Sides of the Table

JULY 27, 2014

Mark pointed out that on the one hand 6 months ago one of Silicon Valley’s best known ibankers told him that SaaS public valuations were the most over-valued since the dot com bubble in 2000. Yet Mark also pointed out that the recent corrections in the public market valuations and the scrutiny new IPOs have undergone is a health sign.

Valuation 309

Valuation Pre-Money Valuation Later Stage Non-Compete 309

Both Sides of the Table

OCTOBER 19, 2009

I had previously raised VC in 1999, 2000, 2001 and 2005. I am very grateful to my friend Zoli Erdos for finding this retro posting for me at web.archive.org. I had kept a personal blog for more than a year and was new at keeping a professional blog.

Venture Capital 274

Venture Capital Term Sheet San Diego Viral 274

Both Sides of the Table

JULY 5, 2011

Look more modern than our previous website, which had a very 2000 feel to it. Anything that works well was her implementation. I did anything that seems kludged – I assure you. Demonstrate the deep relationships we have with the CEO’s with whom we work. We’re almost always the lead investor and usually the most active, too.

Early Stage 260

Early Stage Lead Investor Portfolio Partner 260

Both Sides of the Table

JANUARY 31, 2011

If you became a principal or a new partner in 2000/01 you had a good salary but as it turns out you were very unlikely to see a large upside “carry” return for quite some time. There are many VCs who have been made partner since 2000 and haven’t previously had an exit of their own. Nobody really talks about this.

Entrepreneur 384

Entrepreneur Startup Salary Egypt 384

Both Sides of the Table

NOVEMBER 4, 2010

In 1999-2000 they weren’t doing enterprise-wide installations at Merrill Lynch, Dell and Cisco. What is “disruptive&# is that is also dramatically less expensive. And the providers take a much lower margin – they have nothing to lose, nothing to protect. Enter Salesforce.com. That would have been laughable.

Vesting 376

Vesting Framework Revenue Technology 376

Both Sides of the Table

JUNE 28, 2011

These two trends had a major impact on the computing industry from 2000-2005 but the effects weren’t yet felt by the VC industry. We had to learn how to be better at “load balancing & replication&# – meaning how we managed data across all the boxes since they weren’t centralized on one box.

Venture Capital 334

Venture Capital Software PHP Open Source 334

Both Sides of the Table

MARCH 11, 2010

But there are also problems / risks: - the funding environment might change dramatically – there may never be a next round (see: March 2000, September 11, 2001 and September 2008). - .&# If it works you’re a hero. you may hit unexpected bumps in the road yourself making the next round tough.

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

Both Sides of the Table

OCTOBER 15, 2009

million which closed the first week of March 2000 – a week before the market crashed. Back to BuildOnline, following the staggering decline in public market valuations throughout 2000 we were forced to cut our staff dramatically going from 92 employees to 38 in just one day (and down to 33 a month later). True story.)

Founder 299

Founder Technical Review Startup Venture Capital 299

Both Sides of the Table

JUNE 18, 2010

Founded in 2000 in New Brunswick, NJ. -Customers Include: Reuters, Associated Press, , Dow Jones, Ask.com , healthcare companies, and major investment banks and hedge funds. Competitors: InformationBuilders , DataWatch. Current round: $5.25mm in Series A from.406 406 Ventures. Total raised; $5.25mm plus undisclosed seed.

Venture Capital 225

Venture Capital Non-Compete Vertical Europe 225

Both Sides of the Table

SEPTEMBER 6, 2010

I freely admit this (along with nearly everything between 1999-2000) was a mistake. But I thought I should do a quick post on the topic. Options are gravy - I lived through the first dot com era where we used stock options as a recruiting tool.

Stock Options 294

Stock Options Stock Valuation Liquidation Preference 294

Both Sides of the Table

SEPTEMBER 13, 2009

My Story: The public coming out for my first company, BuildOnline, was in early 2000. Fame and adoration corrupts first timers. And if you’re not careful you might start to believe your own hype. million … yes that was seed in 1999!)

South Africa 310

South Africa Europe Disintermediation Poland 310

Both Sides of the Table

JANUARY 22, 2011

If you became a principal or a new partner in 2000/01 you had a good salary but as it turns out you were very unlikely to see a large upside “carry” return for quite some time. There are many VCs who have been made partner since 2000 and haven’t previously had an exit of their own. Nobody really talks about this.

Entrepreneur 176

Entrepreneur Startup Salary Egypt 176

Both Sides of the Table

FEBRUARY 17, 2011

As anyone raising money in April 2000, September 2001 or September 2008 can tell you that. And finally, it’s worth noting, it’s not all about valuation. Fund raising can be black-and-white. When the spigot slows, the water is gone all at once. It doesn’t feel like that in February 2011.

Pre-Money Valuation 303

Pre-Money Valuation Dilution Valuation PR 303

Both Sides of the Table

MAY 25, 2013

In 2000 our industry had more than $100 billion in LP money. The industry isn’t dying. It is changing. And reinventing itself. And some firms will go under. And others will emerge. That’s normal. It’s a market, after all. By 2009 had reduced to around $15 billion in capital from LPs.

LP 374

LP Later Stage IRR Term Sheet 374

Both Sides of the Table

FEBRUARY 25, 2010

We moved into the legal process and final due diligence in January and February of 2000. Our final closure was the first week of March 2000. We moved into the legal process and final due diligence in January and February of 2000. Our final closure was the first week of March 2000. They accepted my argument.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Both Sides of the Table

DECEMBER 13, 2010

Within a year, by late 2000 / early 2001 consulting firms were firing people en masse. Andersen had lost its long-time CEO, George Shaheen, was hemorrhaging staff and wasn’t exactly known as being an Internet pioneer. Ameet said, “Don’t worry, we’ll be fine, just wait for the next downturn.&#.

Turkey 302

Turkey Differentiation IP Technical Review 302

Both Sides of the Table

MAY 15, 2010

Invidi is based in New York and founded in 2000. Following Microsoft’s addressable advertising trials with NBC in June 2009, many suspect that Google’s investment may have some defensive motivations, as well.

Stealth 285

Stealth SEC Advertising Accredited Investor 285

Both Sides of the Table

JANUARY 16, 2012

I raised money as an entrepreneur, like you, in 1999, 2000, 2001, 2003 and 2005 for two different companies. Our 2000 fund is the single best fund of its vintage. I’ve raised in boom markets and when everybody thought the Internet was a fraud. I’ve raised seed rounds and A-D rounds. Our 2008 fund looks spectacular.

Developer 366

Developer Silicon Valley PR Las Vegas 366

Both Sides of the Table

SEPTEMBER 2, 2009

Coupled with my participating preferred from 1999 and 2000 I had more than $55 million of liquidation preferences. In my first company I had to raise money in April 2001 or die. I took money with a 3x participating preferred liquidation preference with 8% compounded interest annually.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

Both Sides of the Table

FEBRUARY 17, 2010

I was living in Europe in 2000 when the first WAP phones (Wireless Access Protocol) were introduced. Absolute Power Corrupts, Absolutely. These phones were so over hyped. They were going to bring the Internet to your mobile phones ushering in the era of “m-commerce.&# Gag.

Flash 326

Flash Mobile Application Development Cloud 326

Both Sides of the Table

JANUARY 31, 2010

We raised a seed round of capital in 1999 and our first venture capital round was the first week of March 2000 (e.g. But this was early 2000 and our US competitors had already closed rounds North of $45 million. We had a $40 million round lined up to close in the Autumn of 2000. Our first big institutional round was $16.5

Entrepreneur 308

Entrepreneur Silicon Valley San Diego Non-Compete 308

Both Sides of the Table

OCTOBER 9, 2013

But I had been down this road in 2000 and I saw how punishing markets could be when you didn’t sell and had an offer. In hindsight we know the market was sure there (whether or not we would have captured it is a different story). VCs even offered me to cash out seven figures personally not to sell.

San Francisco 405

San Francisco Term Sheet Flash .Net 405

Both Sides of the Table

JUNE 29, 2017

Dating back to Upfront II in 2000 (the single best performing fund in the US for that vintage) 2 of our 3 best returns were driven by companies with female founders / CEOs. We believe this isn’t just a market statement — it is where we will drive huge and differentiated returns.

Los Angeles 287

Los Angeles Las Vegas Venture Capital San Francisco 287

Both Sides of the Table

MARCH 17, 2012

1 week later the market crash of 2000 began and the dot com market began to collapse and financings with it. It was a long day but at the end of the meeting we had a final agreement. The lawyers drafted it within 48 hours and we signed it in 72 hours.

Term Sheet 301

Term Sheet Ireland Cofounder Finance 301

Both Sides of the Table

SEPTEMBER 14, 2016

Even though our 2000 fund was the single best performing fund in the United States for that vintage, continuing to get investments wasn’t possible so we had to rebuild. As venture fell out of favor all three pulled out of the asset class.

LP 150

LP Entrepreneur United States Venture Capital 150

Both Sides of the Table

OCTOBER 3, 2011

Even more interesting is that at GRP Partners (the VC firm where I’m a partner) our two most successful returns from our previous fund [which is ranked as the top performing fund in the country for its 2000 vintage according to Prequin] were both run by women! But then the truth sets in.

Entrepreneur 341

Entrepreneur Venture Capital Open Source Social Network 341