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. What accelerated this was the collapse of the public stock markets.

Technical Review 311

Technical Review LP Early Stage Silicon Valley 311

ConversionXL

NOVEMBER 27, 2019

The New York Times, January 2001. Finally, in December 2001, came the big reveal: Ginger was the Segway. . For marketers, then, the goal is to distribute that secret, in full or part, for maximum impact: To create real value for Insiders. David Hannah, Michael Parent, and Leyland Pitt catalog secrets by marketing value.

Customer 108

Customer Differentiation West Virginia Campaign 108

VC Adventure

SEPTEMBER 20, 2019

That blog post – which turned into one of my most read posts ever – grew out of a study done by Correlation Ventures showing the distribution of outcomes across over 21,000 financings during the years 2004-2013 as well as some of my own observations. The vast majority (almost 2/3rds) of venture financings fail to return capital.

Marketing 91

Marketing Venture Capital Finance Portfolio 91

ConversionXL

NOVEMBER 27, 2019

The New York Times, January 2001. Finally, in December 2001, came the big reveal: Ginger was the Segway. . For marketers, then, the goal is to distribute that secret, in full or part, for maximum impact: To create real value for Insiders. David Hannah, Michael Parent, and Leyland Pitt catalog secrets by marketing value.

Customer 101

Customer Differentiation West Virginia Campaign 101

Both Sides of the Table

NOVEMBER 29, 2010

I changed that quickly when the market shifted and I had to lay off more than 80 people – many of whom were friends. We went “nuclear&# and slimmed down to 33 people (yes, I know, still large by today’s standards but this was 2001), raised $10 million and we built a real company.

Warrant 333

Warrant Germany France Cost 333

YoungUpstarts

MARCH 10, 2017

Launched in 2001, it is the world’s sixth most popular website regarding overall visitor traffic. We’re all experiencing the rise of a growing number of cloud applications coming through sales, marketing, HR, operations or finance to complement centrally designed, legacy IT apps, such as ERP, data warehousing or CRM.

Government 104

Government Technical Review Asia Japan 104

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). People buy companies for 3 primary reasons: 1) they want the management team / talent 2) they want the technology or 3) they want the market traction (revenue, customer base, profits, etc).

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

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. But any entrepreneurs raising capital should keep in mind that this opening of the markets could possibly be temporary. Why did the VC markets freeze so quickly? Market downturn – We all know that investors move in herds.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

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. Truthfully.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Berkonomics

JUNE 1, 2023

Note that none of these three famous innovators were inventors like Thomas Edison, but visionaries who see a new marketplace or niche or how to reach the mass market in ways not previously attempted. Well, it’s a fair question. Innovation does not always equal invention. My experience describing innovation.

Artificial Inteligence 62

Artificial Inteligence United States Chicago Internet 62

Babbling VC

AUGUST 10, 2011

OK, hands up, who's truly surprised by the drop in the stock markets or the postponed tech IPO's or even the upcoming slowdown in venture financing? I am seriously babbling like everyone else did in 2001, 2008 and now again in 2011. Worry but don't become paralyzed by market developments. No really, who is surprised?

Germany 76

Germany Stock IPO Valuation 76

K9 Ventures

SEPTEMBER 8, 2015

2) New market (less common form, examples are Lyft and eShares) and 3) New business model (least common, non-K9 portfolio examples are PriceLine and SolarCity). At K9 we focus on the first two, either core new technologies and technology platforms or new markets. New Technology or New Market, meaning no “me too” ideas.

San Francisco 48

San Francisco Early Stage Portfolio Software Engineering 48

Both Sides of the Table

OCTOBER 19, 2009

I had previously raised VC in 1999, 2000, 2001 and 2005. They looked nervous at having to speak with me impromptu and without the benefit of financial figures to scoff at, product pitches that they’ve seen 100 times and a market sizing to unpick. Page 1: Market Size. $3 I wasn’t feeling it. But these two certainly were.

Venture Capital 274

Venture Capital Term Sheet San Diego Viral 274

The Startup Magazine

MAY 4, 2022

For foreign exchange traders, Forex harmonic patterns are essentially charting patterns that can assist traders in discovering pricing trends by forecasting future market movements as part of a trading strategy and can be utilized to spot fresh trading opportunities and pricing trends when a trader knows what they’re searching for.

DC 129

DC Forecast Search Naming 129

Feld Thoughts

APRIL 21, 2016

Bill Gurley wrote an incredible post yesterday titled On the Road to Recap: Why the unicorn financing market just became dangerous … for all involved. In 2001 and 2002 I learned a brutal set of lessons, including experiencing that $100 million of paper money going to $0 when Interliant went bankrupt.

Marketing 70

Marketing Down Round Startup IRR 70

Feld Thoughts

APRIL 3, 2011

This has been going on for at least a quarter or two, but the velocity of it seems to have picked up with a wave of high priced financings along with large financings for nascent companies. In the tech industry, the great Internet bubble inflated between 1999 and 2000 and deflated (or popped) in 2001.

Entrepreneur 143

Entrepreneur Finance Internet Web 143

Ben's Blog

JUNE 18, 2011

So it looks like the market leaders are trading closer to recession multiples than bubble multiples. This has to do with adoption rates; this period seems about right for the oldest cohorts (less likely to adopt new technologies) to die off and for younger cohorts (quickest to use new technologies) to enter the market. What is next?

Technical Review 76

Technical Review Software Review Valuation Internet 76

Ben's Blog

JULY 16, 2013

What about the efficient market hypothesis? Aren’t markets rational? If markets behave rationally, one might expect the ratio of price to earnings to be reasonably stable over the period (click here for complete data set). 3/30/2001: 26.3. Because markets are not logical; markets are emotional.

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

Startup Lessons Learned

JUNE 22, 2020

The Economic Antidote to COVID-19 Eric Ries & Ryan Beck In 2001, Apple's revenue fell by 33% in the depths of the dotcom bust. As revenue contracts, orders slow, and capital markets freeze, conventional wisdom drives business leaders to cut costs and shy away from new projects. The rest is history. This crisis could be different.

Silicon Valley 60

Silicon Valley Equity Stock Finance 60

Feld Thoughts

JULY 9, 2013

I’ve worked with Matt since 2001 when I joined Fred Wilson and Greg Sands on the board of Return Path. The founders knew each other well and were in a brutal competition in a market that didn’t yet exist. At the time I was an investor in a company called Veripost that was a direct competitor with Return Path.

Startup 141

Startup Finance Community Founder 141

Steve Blank

SEPTEMBER 14, 2009

To do this they have to accomplish five things; 1) get deal flow – via networking and legwork, they identify likely industries, companies and teams with the potential for rapid growth (less than 10 years), 2) evaluate those companies and teams on the basis of technology, market opportunity, and team.

Silicon Valley 217

Silicon Valley Technical Review IPO Venture Capital 217

Feld Thoughts

AUGUST 5, 2011

Today is Finance Friday and post #2 has been drafted by the Finance Friday team from University of Chicago Booth and is waiting for my edits. This one is more specific than “ignore the macro economy&# – instead, it’s “ignore the Dow and the stock market and get back to work on your business.&#.

Stock 155

Stock Entrepreneur Chicago Finance 155

VC Adventure

FEBRUARY 17, 2016

In response to a comment to my post earlier this week about the Profit Imperative, I rattled off some ideas about the current state of the markets. There are clearly headwinds in the markets – I’m not at all suggesting that there aren’t. As you know, markets tend to perpetuate themselves and pendulum.

Marketing 48

Marketing Balance Sheet Valuation Venture Capital 48

Berkonomics

APRIL 20, 2017

Note that none of these three famous innovators were inventors like Thomas Edison, but visionaries who find a new marketplace or niche – or how to reach the mass market in new ways. It is not hard to find strands of gold in the carnage left by failed businesses lost when a bubble bursts, such as in 1857, 1902, 1929, 2001 and 2008.

Artificial Inteligence 102

Artificial Inteligence United States Chicago Open Source 102

Scalable Startup

AUGUST 26, 2014

As further market proof of the power of Drupal in the enterprise, Acquia has received about $100 million in funding in the past 3 months, which puts its valuation at over $1 billion. Drupal was launched in 2001, and Acquia started in 2007. There’s a lot of buzz about the Amazon acquisition of TWITCH this week. Acquia, Inc.

Founder 42

Founder Los Angeles PHP Bandwidth 42

The Startup Magazine

NOVEMBER 13, 2018

Investments from capital markets to real estate plummeted. Belnick founded BizChair.com with $500 in 2001. These shares propelled him to billionaire status in 2015 when the firm’s market value soared. Ten years have passed since this crisis occurred. What have entrepreneurs been up to since then? Source: Pexels. Sean Belnick.

Cofounder 141

Cofounder Venture Capital India Valuation 141

500hats.com

AUGUST 2, 2012

While institutional LPs know big changes are happening, most focus too much on 1) increasing/decreasing fund size or 2) marketing + branding as the major trends. These two divergent groups have optimized for very different market conditions and behaviors. This is a long piece, so if you’re not a fan of inside baseball, skip it.

Silicon Valley 74

Silicon Valley Early Stage Venture Capital Valuation 74

Startup Lessons Learned

MAY 1, 2018

We spoke recently about his path as a serial innovator, his beginnings in marketing, and what he’s been doing lately with his experience in teaching big companies how to transform themselves from the inside out. This was in 1993, and I was the chief marketing officer at Frito-Lay North America.

Southern California 123

Southern California North America Finance Lean 123

ReadWriteStart

NOVEMBER 5, 2019

These results were obtained after the following rounds of financing of more than 1000 technology companies in the United States. Only 46% of these companies were able to raise enough for the second round of financing. The product/service did not satisfy any need in the market. Where you can turn when you need financing quickly.

Venture Capital 77

Venture Capital Cofounder Finance Seed Capital 77

Feld Thoughts

OCTOBER 30, 2014

He had just read my post on being uncomfortable with the phase of the current cycle and told me an anecdote from the great Internet bubble of 2001 that I hadn’t heard. He’d gotten a random note asking about his valuation when we invested relative to another financing that was just announced.

Valuation 143

Valuation Stock Angel Investor Boston 143

The Startup Magazine

MARCH 3, 2020

By 2001, he was invested in the stock market and witnessed a unique situation where the stock market was in a tumble and, simultaneously, real estate was going up. Analysis of the CRE Market in the US. When these leases are up and rates increase by a couple of points, it could negatively impact the entire market.

New York City 106

New York City Marketing Technical Review New York 106

genylabs.typepad.com

SEPTEMBER 24, 2011

I wont bother going into details on start-up financing terms ( see this post for an overview of typical VC terms) except to say if you dont know and understand: the firms cap table and valuation. The best start-up I ever invested in went bankrupt in 2001. Cash is king and it's a developer's market out there right now.

Equity 40

Equity Technical Review San Jose Stock 40

Both Sides of the Table

SEPTEMBER 27, 2010

We need venture debt, factoring companies and public markets. What micro VCs need to consider is what happens when several of your companies want to grow and require VC financing? Or when the economy turns downward and they all need financing extensions? In public investing you can get in and out even in a bull market.

Liquidity Event 308

Liquidity Event Silicon Valley Seed Stage Finance 308

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). - there may be major competitive changes in the market that makes your next funding round hard (e.g. Who started this meme? Should you take it?

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

Steve Blank

APRIL 13, 2013

If it’s driven by profit then the ecosystem needs both entrepreneurs as well as Venture Finance. China has essentially closed its internal search, media and social network software market to foreign companies who wouldn’t play with the government rules on the Great Firewall. Given the closed market to U.S. innovation in the U.S.

Silicon Valley 267

Silicon Valley China Venture Capital Merger 267

Cracking the Code

JANUARY 19, 2016

I began my career at McKinsey and when the Internet bubble burst in 2001, I made a shift towards online software (ASP at the time). SaaS startups need to have a VC that understands the SaaS model, including market development strategies, upsell dynamics, sales incentive plan, etc. What makes a good VC for a SaaS startup?

API 48

API Silicon Valley Europe Differentiation 48

Gust

SEPTEMBER 17, 2014

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. It’s like we need a finance 101 course for entrepreneurs.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153