Both Sides of the Table

JULY 29, 2015

I saw this in 2001-2003 and in 2008-2010. You find out those that have the fortitude to work out a new way forward, who can handle recapitalizations or downsizing or shutting down business lines or hiring whole new teams.

South Korea 150

South Korea Italy Recapitalization Germany 150

Both Sides of the Table

DECEMBER 18, 2009

This was soon after the bursting of the dot com bubble – in early 2001. The agreement was that both sets of investors would fund the combined entity, we would reduce overlapped costs and become a healthier company. We were going to avoid the embarrassment of being a total dot com flame out.

Germany 298

Germany Entrepreneur Merger Los Angeles 298

Both Sides of the Table

JULY 29, 2010

The A round was done in February 2000 (end of the bull market) and my B round was done in April 2001 (bear market). I explain in the video what happened in my first company (e.g. on the entrepreneur side of the table) when I raised at too high of a price. I eventually needed more money. As a result I had to do a down round.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Both Sides of the Table

JULY 22, 2010

Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed. Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. Those were the dog days of entrepreneurship.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Both Sides of the Table

FEBRUARY 25, 2010

I lived through this again September 2001. I lived through this again September 2001. Many companies that were in the process of raising money did not. It quickly became impossible to raise venture capital. Anybody who didn’t close was dead. I don’t even need to mention the date for you to know what happened.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Both Sides of the Table

SEPTEMBER 2, 2009

In my first company I had to raise money in April 2001 or die. And importantly you start thinking about your next gig. That’s when the VC has lost. I know because I’ve been there. 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

JULY 16, 2010

The VC industry grew dramatically as a result of the Internet bubble - Before the Internet bubble the people who invested in VC funds (called LPs or Limited Partners) put about $50 billion into the industry and by 2001 this had grown precipitously to around $250 billion.

LP 311

LP Technical Review Early Stage Silicon Valley 311

Both Sides of the Table

JUNE 22, 2011

An obvious example is Google who may have gotten less market attention if there would have been 8 well-financed competitors during the 2001-2005 timeframe. Those with strong business models suddenly stand out when the tide goes out.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

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

MAY 19, 2013

Dedicated Public Servant : Garcetti has been a member of the LA City Council since 2001 and was a three-time president. Smart : He was graduated from arguably our top-rated high school (Harvard Westlake), B.A. from Columbia, Rhodes Scholar at Oxford and studied at London School of Economics.

Los Angeles 325

Los Angeles San Francisco LP Austin 325

Both Sides of the Table

JUNE 28, 2010

This lasted from about 2001-2004. Founded in Sunnyvale, CA in 2001. When he entered the industry he caught the tail end of the dot com bubble and then was immediately thrust into a 3-year period of “triage&# where VC’s had to deal with problems in portfolio companies. CEO Henry Vogel (ex CRO of Quigo, and VP at Ebay).

San Francisco 230

San Francisco Los Angeles Cofounder SMS 230

Both Sides of the Table

MAY 7, 2011

Lesson: Joel had been building a community of readers since 2001. The software is not difficult to build and the hosting element has become a commodity; the hard part is building a community. That’s the unique element, the people who you can convince to come to your site each and every day.

Software Review 285

Software Review Software St. Louis API 285

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

OCTOBER 14, 2015

We have an entire generation of startup founders who don’t have muscle memory from getting their burn rates back into shape from 2008/09 or 2001-2005. Some companies have to go first. Others will follow. But many of us have been there. It’s not fun. But it’s necessary.

Burn Rate 150

Burn Rate San Francisco Private Equity LP 150

Both Sides of the Table

SEPTEMBER 14, 2010

This is exactly what happened in the broader VC industry between 1999-2001 as many people without the requisite skills entered the industry. But with its growth and success it will encourage many people to enter the market who will lack 5 critical success criteria for earning positive returns.

Silicon Valley 306

Silicon Valley Deal Flow Angel Investor Cofounder 306

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Both Sides of the Table

FEBRUARY 28, 2018

Perhaps the first big pioneer of this was Apple who started opening stores in 2001 , just when it appeared that the Internet was going to implode and when they went physical the industry trade magazines and press openly mocked them.

Curation 296

Curation Los Angeles Differentiation Channel 296

Both Sides of the Table

FEBRUARY 8, 2010

My chips were down in late 2000 / early 2001. You’ll have to sort though how much is sour grapes versus reality but … wouldn’t you rather have all data points? My story briefly. I had 5 investors at the time. That “nobody knew me&# was being polite. Nobody wanted anything to do with Internet companies.

Venture Capital 288

Venture Capital Term Sheet Cofounder Partner 288

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

FEBRUARY 12, 2017

Around 2001 Jonah was studying at MIT Media Lab and began running experiments in viral stories in an era before smart phones (2007) and before social networks took off (2004–2007) and before YouTube (2005). I asked Jonah in my interview how he became this viral guru.

Media 210

Media Los Angeles Russia Viral 210

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. I’ve raised in boom markets and when everybody thought the Internet was a fraud. I’ve raised seed rounds and A-D rounds. And of course I’ve sat on the other side of the table: As a VC.

Developer 366

Developer Silicon Valley PR Las Vegas 366

Both Sides of the Table

SEPTEMBER 13, 2009

2001-2004 were very humbling but we built a real company. This is only the first chapter in my story. That story for another day. Don’t Believe the Hype – take your lesson from Public Enemy (video worth a 4 minute diversion ).

South Africa 310

South Africa Europe Disintermediation Poland 310

Both Sides of the Table

AUGUST 24, 2015

I’ve seen friends (and family members) lose much of their savings that way over the years because “Black Swans” happen and in 1987, 2001, 2003 & 2008 (just to name a few from my memory) huge market gyrations caused much financial distress to people seeking short-term gains.

Stock 150

Stock Finance Marketing Valuation 150

Both Sides of the Table

OCTOBER 22, 2009

This was a reasonable achievement when you consider that it was 2001-02, one of the worst years to be selling enterprise software and we were selling it SaaS style, which was still evangelical back then. Let me tell you my story. In my first company we had achieved a small bit of scale. In our first year of sales we did $2.1 million.

Hiring 327

Hiring Startup Equity Sales 327

Both Sides of the Table

APRIL 22, 2010

When my company hit the fan in 2001 I could have easily walked and gotten a better paying job. Especially when this job hopper has them out for drinks to talk about his cool new gig where the grass is currently greener. And good VC’s feel the same way.

Hiring 392

Hiring Employee Vesting Silicon Valley 392

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

SEPTEMBER 27, 2010

I discussed it in my post on the topic linked above. ** One small note: many VCs who got into the industry in 2001 or later have never seen a “carry&# check. The hardest thing is deciding what the right time to allow founder liquidity is.

Liquidity Event 308

Liquidity Event Silicon Valley Seed Stage Finance 308

Both Sides of the Table

JANUARY 31, 2010

Then I got engaged to be married in late 2001 and had the motivation to get really serious. It became a social activity. 8-miler in Munich with the CEO of a company we were trying to buy. 7-miler in Dusseldorf with Stuart Lander, my close friend and associate. 10k in Cologne with the CEO of my largest customer.

Entrepreneur 308

Entrepreneur Silicon Valley San Diego Non-Compete 308