Agile VC

OCTOBER 23, 2012

And even if they wanted the index return, there is essentially no way to buy (or sell) a broad-based basket of VC funds in the way you can trade the S&P 500 or Russell 2000 or other public equity index. Startup outcomes are a power law distribution rather than a standard distribution. What about fund of funds (FoF), you ask?

LP 176

LP Accredited Investor Carried Interest Portfolio 176

Agile VC

APRIL 17, 2011

Distribution revenue is CPC and CPA. . Historically more revenue came from distribution/lead-gen (57% in 2007), but this tipped in 2008 though appears to be steady from 2009 to 2010 at about 58% advertising and 42% distribution. Kayak generates both distribution (i.e. Expedia accounted for 24.5%

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Agile VC

NOVEMBER 6, 2013

But with media-based businesses, the distribution of outcomes is markedly different in part because the value capture by new disruptive startups is different. To be fair the broad equity markets are up strongly over this time period, but clearly growth has been strongly favored.

IPO 194

IPO Aggregator B2B Internet 194

Agile VC

SEPTEMBER 27, 2011

And distribution rights to that content are still paramount to building digital video businesses. Providence Equity invested $100M at a $1B valuation not because of their technology or product, but because the network owners contributed a lot of valuable content… or at least access to it for 2years.

Silicon Valley 100

Silicon Valley Seed Stage Syndicate Syndication 100

Agile VC

SEPTEMBER 19, 2011

1) Qwikster May Have Different Owner in Longer Term – It was obvious before and it’s explicit now… the future of Netflix is digital distribution. A slow-growth, but cash rich business like this could be a better fit for a retailer, private equity fund, or other type of owner in the longer run.

Silicon Valley 100

Silicon Valley Private Equity Seed Stage Syndicate 100

Agile VC

JULY 11, 2012

in equity & loans which was ultimately worth >170x ($355M) when DEC went public about a decade later. Should there be a notion of “founder equity” for those individuals who put in the hard work to start a firm and build the brand? Big success was Digital Equipment Corporation (DEC), in which ARD invested about $2.1M

Silicon Valley 240

Silicon Valley Carried Interest Cofounder Boston 240

Agile VC

JULY 24, 2013

The point is that unlike various consumer credit markets where subprime lending does indeed work, trying to apply a comparable model to VC is typically disastrous because startup outcomes follow a power-law distribution rather than a normal distribution. But we all know that is in fact false… the power law distribution holds.

Valuation 200

Valuation Early Stage Distribution LP 200