article thumbnail

The Coming Brick Wall in Venture Capital & Why This is Good for US Innovation

Both Sides of the Table

This is the final part of a 3-part series on the major changes in the structure of the software & the venture capital industries. With more competition in early-stage many VCs are investing smaller amounts at earlier stages. Some are going later stage to not miss out on hot deals.

article thumbnail

How Private Equity and Venture Capital Investors Are Eating Their Own Dogfood

David Teten

Private equity and venture capital investors are copying our sisters in the hedge fund and mutual fund world: we’re trying to automate more of our job. Advances in machine learning, specifically natural language processing, have made generating these baseline, aggregate datasets possible, at scale, with high accuracy.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Changes in Software & Venture Capital – Part 2 of 3

Both Sides of the Table

Yesterday I wrote Part 1 of the series on the changes to the software industry over the past decade that has led to changes in the venture capital industry itself. Some have done earlier-stage deals and done well. Others have chased earlier-stage but lack the skills or relationships to do this effectively.

article thumbnail

VCs eating our own dog food: Using technology and analytics to make better investments

David Teten

Private equity and venture capital investors are copying our sisters in the hedge fund world: we’re trying to automate more of our job. . Data companies focused on early-stage startups include Aingel , fundsUP , Preseries , PredictLeads , and Sploda. ff Venture Capital hired two full-time engineers to build out Totem.

article thumbnail

How to Scale Support of Portfolio Companies

David Teten

At HOF Capital, we support our companies through 7 main levers (i.e., the “TOPSCAN” framework from my research study on value creation by VCs ): T eam-Building – We aggregate openings across our portfolio on our jobs page. – Aggregation, ranking, and discounts from service providers. Ethics Policy, Expenses policy).

article thumbnail

On Funding?—?Shots on Goal

Both Sides of the Table

If you’re a later-stage fund that comes in when there’s less upside but a lower “loss ratio” you might have only 8–12 investments in a fund. Another 3–5 could return in aggregate $300–500 million. Early-stage venture capital is about extreme winners. The right number of deals will depend on your strategy.

article thumbnail

What’s a Fair 409A Discount?

VC Adventure

Back in the olden days of venture capital, company boards had wide discretion in pricing company options. It was and is imprecise science but – at least in the case of venture backed startups – there wasn’t much harm in an option being priced low. Quick note: I’m not your lawyer. I was wrong.