Remove 2000 Remove Cost Remove Down Round Remove Forecast
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In Venture Capital, Should You Be a Momentum or a Value Investor?

David Teten

“You could argue that when they were [raising] oversubscribed [VC rounds], Facebook, Google, Amazon, etc., The reverse also holds: a Value investment can become Momentum, and then follow with a down round. In 2000, LPs invested $104b into 638 funds, but by 2003, LPs’ commitment rate had dropped to just $11b into 161 funds.

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What Most People Don’t Understand About How Startup Companies are Valued

Both Sides of the Table

Valuing any company can be difficult because it requires a degree of forecasting future growth & competition and ultimately the profits of the organization. So inside rounds get delayed and when there are non-participants you often find “recaps” or “structure” or “pay-to-play” provisions.

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