Growthink Blog

JUNE 3, 2014

Over the last three weeks, we have discussed the various factors that drive the 25% IRR return potential of the startup and emerging company investing class. Yet, for the very most part, it is to this world that most of us turn to manage our money. As in, Trust Us and we will take care of it for you. Now, there are alternatives.

Omaha 91

Omaha Accredited Investor IRR Silicon Valley 91

David Teten

JULY 10, 2017

Why couldn’t a large company offer 1:1 or greater matching of the angel investing of their senior management? Angel investing is an exceptionally high-return asset class; I have collected twelve studies on angel returns in the US and UK, which show median internal rate of return (IRR) between 18 and 38 percent.

Employee 60

Employee Balance Sheet Syndicate Syndication 60

Berkonomics

OCTOBER 1, 2015

Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation. That further reduces the amount available to founders if not still in the ranks of management. So this advice is directed to the investors.

Dividend 48

Dividend Preferred Stock IRR Participating Preferred 48

Both Sides of the Table

MAY 25, 2013

The better way to think about VC returns is, do the firms consistently beat alternative asset clases on an IRR basis to adjust for the increased risk and lack of liquidity? I’ll admit that I do know one VC firm who’s strategy is not to call their entrepreneurs and not to be involved in operations. It is changing.

LP 374

LP Later Stage IRR Term Sheet 374

Steve Blank

AUGUST 5, 2014

I loved what he was working on (thanks to perspective in data management from my large company experience here—that prepared mind thing). Don’t be afraid to take a step down (Oracle was a $1 Million business, I had been marketing manager for a $100 Million business). I was on the way to my lifetime IRR of 90%.

Venture Capital 334

Venture Capital Silicon Valley Chicago Cofounder 334

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? Labor Arbitrage.

San Diego 72

San Diego Warrant IRR Investment Bankers 72

David Teten

AUGUST 21, 2019

The RBI investor is motivated to help the company grow because that speeds up the pace of revenue payback, and therefore IRR. Requires regular monthly payments and careful cash management. That said, Jim Toth, Managing Partner, Riverside Acceleration Capital, observes, “Actually, everyone is aligned towards growth.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Ben's Blog

AUGUST 17, 2020

This growth could be a function of product differentiation, go-to-market operations, sheer market size, new geographies, and expansion into adjacent categories. The management teams of both companies may want to be valued at 15x 2020 revenue — in other words, both companies would be worth $300 million. Not too shabby!

Valuation 36

Valuation Balance Sheet Cofounder Forecast 36

VC Cafe

MARCH 8, 2010

billion (net management fees and operational expenses). The Carmel I Fund, raised in 2000, had the highest performance, giving an internal rate of return (IRR) of 8% and a positive multiple of 1.4. Other funds, including Apax Israel II, Israel Seed IV and JVP showed negative IRRs of 20-30%.

IRR 75

IRR Venture Capital Institutional Investors 75

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. Our J Curve and early IRR may look worse than other funds. “What did you change about Homebrew III to better fit ‘seed phases’ versus seed rounds ?” That’s a great question!

Product 82

Product IRR LP Seed Stage 82

abovethecrowd.com

APRIL 20, 2016

These mutual funds “mark-to-market” every day, and fund managers are compensated periodically on this performance. We have already seen examples of founders and management obtaining liquidity in front of investors. Do you feel the need to raise more capital quickly before the prices erode further and bring down your IRR?

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

K9 Ventures

NOVEMBER 30, 2008

The General Partners (GPs) are the operating guys. In return for the operational role the GPs play, their firm receives a Management Fee. Industry averages for the management fee are expected to be around 2.5% Well, for one, you have to try and secondly, the management fee makes for a nice perk. Background.

IRR 48

IRR Venture Capital LP Early Stage 48

David Teten

NOVEMBER 23, 2020

In its first full year of operation, VCAP attracted 159 applicants. They provide retail clients with sophisticated risk management tools that previously only ultra high net worth investors could access. . So the ethical question is, how transparent should I be in discussing my concerns about a given company and its management?

Venture Capital 60

Venture Capital Partner Technical Review Cofounder 60