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What’s Really Going on in the VC Industry? What Does it Mean for Startups?

Both Sides of the Table

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. There is also True Ventures that does early stage, seed investments.

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The Changing Venture Landscape

Both Sides of the Table

In 2001 companies IPO’d very quickly if they were working, by 2011 IPOs had slowed down to the point that in 2013 Aileen Lee of Cowboy Ventures astutely called billion-dollar outcomes “unicorns.” Today you have funders focused exclusively on “Day 0” startups or ones that aren’t even created yet. The legends of Silicon Valley?

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Springboard Launches Accelerator Program for Early Stage European Startups

ReadWriteStart

Springboard has launched a new mentorship-led accelerator program for European startups. Springboard aims to help early stage startups. Springboard points to the success-rates among startups who enter these sort of accelerator programs, noting that over 50% of them have succeeded in raising their next round of funding.

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The Berkus Method: Valuing an Early Stage Investment.

Berkonomics

For those of us who’ve invested in early stage companies, especially technology startups, we have confronted a universal problem. And in my opinion, all fail to take into account the universal truth – that fewer than one in a thousand startups meet or exceed their projected revenues in the periods planned.

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Early Stage Marketing and Branding – Farida Fotouhi

SoCal CTO

She is a go to person for me when I have questions around technology or early stage marketing and branding. We downsized from 35 people in 2001 and are now a size that allows us to work directly with clients. We do a lot of B2B and also have an "Early Stage Branding" practice for technology startups.

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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

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. VC’s in early rounds will argue that “participation&# is simply downside protection and if you sell for a lower price they should get more of the proceeds. This is a shame.

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How Lemming VCs Cause Venture Recessions

Mucker Lab

Combined with the usual summer slowdown, some are already raising the spectre of 2001 or 2008. Just six months ago, VCs were publishing white papers extolling the virtue of non-bank lending startups, but now no one will touch them with a 10-foot pole. The “venture recession” of 2016 is in full swing.

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