View from Seed

AUGUST 17, 2021

A few weeks ago, we hosted a small dinner for a number of portfolio company founders, LP’s, and friends of the firm. New funds have formed, old market leaders are gone or walking dead. But the reality is that the more interesting the market, the more likely there is to be rapid and unpredictable change. Patience is a virtue.

IRR 136

IRR Dilution Founder Portfolio 136

Steve Blank

MARCH 31, 2014

Think about this; 7 years ago Nokia owned 50% of the handset market. Fast-forward to today—Apple is the most profitable Smartphone company in the world and in Spain Android commands a market share of more than 90%. Its worldwide market share of Smartphones has dwindled to 5%. Apple owned 0%. Think about this.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

David Teten

JANUARY 19, 2021

The value ascribed by subsequent investors (in a secondary); buyers (acquisition); or the public markets (IPO). Seed-stage compatible: Like traditional equity VC investors, Flexible VCs accomodate early-stage investment risk within their portfolios better than a traditional RBI funder. 20-30% is a common target IRR for investors.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

David Teten

SEPTEMBER 16, 2014

In 2013, 298,800 angels invested in 70,730 entrepreneurial ventures, according to the 2013 Angel Market Analysis by the Center for Venture Research at the University of New Hampshire. Source: Center for Venture Research – Angel Market Analysis Report. Sohl: “The Angel Investor Market in 2011: The Recovery Continues”.

Angel Investor 114

Angel Investor Technical Review Venture Capital Pre-Money Valuation 114

David Teten

MAY 8, 2012

As Steve Case has said, it’s ridiculous that anyone can gamble and be guaranteed to lose money, but there are strict regulations around who can invest in early-stage private companies and earn (in some cases) a 27% IRR on their capital. *. The Entrepreneurs Access to Capital Act helps to redress this. Start now! *

Securities and Exchange Commission 148

Securities and Exchange Commission IRR Entrepreneur Angel Investor 148

David Teten

NOVEMBER 17, 2011

Projections were based on dozens of operational assumptions related to pricing, production, marketing spend, etc. Market assumptions including market share and macroeconomic data were also in order. 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

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. To not be swayed nor frightened by the financial industry’s omnipresent marketing machine. The word that best describes a state of affairs like this is institutional.

Omaha 91

Omaha Accredited Investor IRR Silicon Valley 91

This is going to be BIG.

JULY 30, 2015

And those exits would be roughly 10% of the portfolio--about 3 out of every 30ish deals. If you could return investors nearly triple their money and mid 20's returns consistently, compared to the 8% long term return in the public equities market, they'd more than accept that. The average VC-backed exit is somewhere around $250mm.

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

Growthink Blog

MAY 21, 2014

Some suggested that the blame for this lied more with the very difficult market and deal conditions of the past decade than with the VC investment model itself. A wise man once said that all businesses fundamentally do is “bridge the gap” between markets for labor and those for products and services. Investment Flexibility.

San Diego 72

San Diego Warrant IRR Investment Bankers 72

K9 Ventures

DECEMBER 14, 2008

Unlike investing in public markets, investing in early stage companies happens before those companies have a real business, when it is just a concept and a team, and sometimes not even a whole team. Lets assume that Shylock Ventures is capable of producing a 20% IRR on a $100M fund.

IRR 99

IRR Bandwidth Venture Capital Early Stage 99

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. A company with that mindset is dramatically less risky, because it’s not dependent on the financing markets for continued viability. Aligned incentives. But this isn’t really a problem.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Both Sides of the Table

MAY 24, 2021

The Valley has obsessed with a quick up-and-to-right momentum story because we were thought to live in “winner take most” markets. Since funds were driven by extreme successes in their portfolios where just one deal could return 5x the entire fund while 95% of the fund may have done well but not amazing, not missing out on deals was critical.

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

Up and Running

AUGUST 19, 2014

what’s behind your financials, your go-to-market strategy, your current traction in the marketplace, your competition and why you’re better, your intellectual property or “secret sauce,” your exit strategy, etc.). What follows next are projections and marketing plans—every start-up has them of course.

Angel Investor 161

Angel Investor Technical Review Due Diligence Startup 161

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. This also changes the types of deal terms that micro-VCs will undertake.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

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. Well first it’s worth understanding the distinct phases of exactly how a VC firm dies.

LP 154

LP Portfolio Venture Capital IRR 154

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. When a VC is fundraising one of the stats they like to present to LPs is the quality and size of follow-on in the portfolio. a fellow VC asked me after my previous post.

Product 82

Product IRR LP Seed Stage 82

Startup Professionals Musings

MAY 9, 2011

My fourth investment, and the first one I led, was into a mobile applications company, which was also ahead of its time and never truly understood its market. But that one fell victim to rapidly developing technologies, the recession, and the collapse of the consumer electronics market, and is unlikely to return a significant profit.

New York 221

New York Accredited Investor Advisory Board IRR 221

David Teten

OCTOBER 15, 2013

ff Venture Capital has consistently generated a gross IRR on invested capital in excess of 30%, in a world where the average ten-year returns for venture capital firms are in the single digits. We are tracking our marketing as part of this experiment, so please note in the contact form how you heard about ffVC. Now we can.

Venture Capital 114

Venture Capital Accredited Investor IRR Later Stage 114

The Next Web

DECEMBER 16, 2012

Then we’ll look at the different types of buyers in the market, and what that can mean for the final sale price of a site. For all their variation, the valuation approaches we see in use generally fall into three main categories: they’re based on income, assets, or the market itself. Market approach. Common methodologies.

Valuation 128

Valuation NPV Net Present Value IRR 128

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. These mutual funds “mark-to-market” every day, and fund managers are compensated periodically on this performance. With the public markets down, these groups began writing down Unicorn valuations. The market favors growth over profits.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Venture Chronicles

JUNE 30, 2010

Over the past 10 years their quarterly internal rate of return (IRR)—the primary measure of VC success—was dismal, hovering in the single percentage points and sometimes dipping into negative territory. Many firms have struggled to market new funds. Tags: Uncategorized VC IRR.

IRR 36

IRR IPO Venture Capital Portfolio 36

K9 Ventures

NOVEMBER 30, 2008

Doing 10 investments at $1M each would mean that the partner would now have a gigantic portfolio to manage and there just isn’t enough time in the day, or week, or year to manage that many investments, serve on boards and help companies grow while still continuing to look for new investments. The money side is flexible.

IRR 48

IRR Venture Capital LP Early Stage 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