Startup Professionals Musings

DECEMBER 16, 2017

This is called the “portfolio approach,” which counts on hitting only a couple of big winners, while the others return very little. It doesn’t seem to matter what the founders’ projections are, or how fast they believe they will turn profitable. What ends up, usually went down first. All startups always need more money.

Angel Investor 190

Angel Investor Accredited Investor IRR Angel Groups 190

Startup Professionals Musings

MAY 9, 2014

This is called the “portfolio approach,” which counts on hitting only a couple of big winners, while the others return very little. It doesn’t seem to matter what the founders’ projections are, or how fast they believe they will turn profitable. What ends up, usually went down first. All startups always need more money.

Angel Investor 278

Angel Investor Angel Groups Accredited Investor IRR 278

David Teten

JANUARY 19, 2021

From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. Every Flexible VC structure allows founders to access immediate risk capital while preserving exit, growth trajectory, and ownership optionality. . Flexible VC 102: Variations.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

JUNE 5, 2015

This is called the “portfolio approach,” which counts on hitting only a couple of big winners, while the others return very little. It doesn’t seem to matter what the founders’ projections are, or how fast they believe they will turn profitable. What ends up, usually went down first. All startups always need more money.

Angel Investor 120

Angel Investor Angel Groups Accredited Investor IRR 120

Steve Blank

MARCH 31, 2014

Unfortunately as we’ve learned from recent experience, using Return on Net Assets and IRR as proxies for efficiency and execution won’t save a company when their industry encounters creative disruption. If they don’t, then the management team has simply become caretakers of the founders’ legacy. This never ends well.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

David Teten

SEPTEMBER 16, 2014

Dave Kerpen, founder and CEO of Likeable Local , just published an interview with me on Linkedin, which I’ve included below. To succeed in the space, angels must have a high risk tolerance, a large bank account to weather losses, and most important, a diverse enough portfolio to handle losing money on most of your investments.

Angel Investor 114

Angel Investor Technical Review Venture Capital Pre-Money Valuation 114

Hippoland

NOVEMBER 13, 2016

So while I’m waiting for my portfolio companies to either die or go IPO, what am I looking at as indicators of success / failure? Now let’s say we have two portfolios of companies. Portfolio 1: 3 companies Last valuation for all: $3m cap convertible note Recent raise: $1m for each company. These founders are really selling.

IRR 48

IRR Valuation Portfolio Due Diligence 48

David Teten

NOVEMBER 17, 2011

Such a model is particularly helpful for those founders looking for a co-founder or key employee. Since he graduated, he’s now Founder and CEO of a Latin America-focused based startup, Participa.me (“I participate”). If a third of those, or about 10% of the portfolio, work out then you have home-run returns.

Employee 155

Employee IRR Startup Mexico 155

This is going to be BIG.

DECEMBER 28, 2013

Every time he opens his mouth about founder diversity, he seems completely out of his league to address the topic. The biggest question I think VC''s face right now is whether or not, in the future, the best founders will look and act like the best founders of the past.

Venture Capital 152

Venture Capital Cofounder IRR Dilution 152

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. RBI normally requires founders to pay back their investors with a fixed percentage of revenue until they have finished providing the investor with a fixed return on capital, which they agree upon in advance. But should they? Less or no dilution.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Growthink Blog

MAY 21, 2014

One reader reference Gust Founder David Rose’s new book - “ Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups ” and to Rose’s main contention that to access the 25% IRR potential of the asset class one must hold positions in not less than 20 companies. He asked, “ Is this practical advice?

San Diego 72

San Diego Warrant IRR Investment Bankers 72

ithacaVC

FEBRUARY 13, 2013

God said I need somebody to sit and patiently listen to thousands of pitches, even get up before dawn and have conference calls and sit in board meetings all day, make sure those portfolio CEOs are doing fine, eat sushi while driving a Prius. Negotiate a $20 million pre-money with a 19-year-old founder CEO. So, God made a VC!

Liquidation Preference 55

Liquidation Preference IRR Due Diligence LP 55

Both Sides of the Table

MAY 24, 2021

The culture is driven by the 20-something irreverent founder with huge technical chops who in a “David vs. Goliath” mythology take on the titans of industry and wins. But markets have changed and I think investors, founders and experienced executives who want to join later-stage startups can all benefit from playing the long game.

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

K9 Ventures

MAY 14, 2011

He or she doesn’t have a “day-job” but spends all of his or her time in evaluating new investment opportunities or working with portfolio companies. As fiduciaries, the general partners of the uVC funds have to begin to focus on the dreaded VC I-word : IRR. However, there is a difference.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

Up and Running

AUGUST 19, 2014

Always look at the portfolio of investments the firm has made, and contact the CEOs and founders of those companies to find out what it’s like having those investors as a part of their company. Too many founders tread the fine line between arrogance and ignorance. I like to see a sense of responsibility when it comes to the.

Angel Investor 161

Angel Investor Technical Review Due Diligence Startup 161

Hunter Walker

FEBRUARY 25, 2018

One consistent LP complaint I hear about new’ish fund managers is that they forget a bunch of fund construction and portfolio modeling decisions are connected. For Homebrew , we’ve optimized for a product offering that will appeal to our target customers (founders) and maximize spending our time being hands-on supporting startups.

Product 82

Product IRR LP Seed Stage 82

Agile VC

NOVEMBER 13, 2012

At Risk – Usually starts with a firm beginning to see challenges in large portions of its portfolio, or in keeping the partnership together, or in the viability of the firm’s core strategy as broader markets start to shift (e.g. A16Z today or Founders Fund or General Catalyst a few years ago).

LP 154

LP Portfolio Venture Capital IRR 154

Startup Professionals Musings

MAY 9, 2011

Its indefatigable founder, however, has since raised an additional $25 million from other angels, never made a penny of profit, and the value of my original six-figure investment is now about zero. The second company in which I invested, back in 2001, was a novel concept from the serial entrepreneur who invented social networking.

New York 221

New York Accredited Investor Advisory Board IRR 221

abovethecrowd.com

APRIL 20, 2016

All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. We have already seen examples of founders and management obtaining liquidity in front of investors.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Hippoland

NOVEMBER 6, 2016

I was comparing my small personal angel portfolio and my investments at 500 Startups, and I noticed that on a percentage basis, the companies in my personal portfolio have been able to raise more money on average and more easily than companies in my 500 portfolio. And, all of those founders have pedigree. Why is that?

Portfolio 48

Portfolio IRR Later Stage Limited Partner 48

David Teten

NOVEMBER 23, 2020

I highlight endogenous social impact because many of my portfolio companies might give money to charity or provide low-cost pricing to nonprofits, but that’s not what I think of as an impact company; they’re tacking on social impact on top of their core business, whatever that is. . . Starship was launched by the co-founders of Skype.

Venture Capital 60

Venture Capital Partner Technical Review Cofounder 60