David Teten

SEPTEMBER 16, 2014

That’s a sizeable amount, especially in comparison to the US venture capital industry, which similarly invests over $20 billion annually. 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.

Angel Investor 114

Angel Investor Technical Review Venture Capital Pre-Money Valuation 114

Steve Blank

MARCH 31, 2014

As the venture capital business has come roaring back in the last 5 years, startups are awash in available capital. 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.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

This is going to be BIG.

JULY 30, 2015

You incorporate expected company returns, mortality rates, and fee structures to try to predict how a venture capital fund works from a cash in, cash out, and NAV standpoint. And no, the numbers don't exactly add up--but they're more than close enough for venture capital. It's also not the "average fund".

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

David Teten

APRIL 8, 2013

My coauthors and I just published in the Journal of Private Equity the first-ever research study on best practices of venture capitalists in creating portfolio company value through operational support, exploring exactly these questions. Analytics and Data Contributed Articles Portfolio Operations Private Equity Venture Capital'

Private Equity 114

Private Equity Hungary IRR Venture Capital 114

Both Sides of the Table

MAY 24, 2021

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. The Valley has obsessed with a quick up-and-to-right momentum story because we were thought to live in “winner take most” markets.

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

VC Adventure

AUGUST 12, 2014

The typical “successful” venture portfolio is often described as having the following outcome: 1/3 of companies fail. 1/3 of companies return capital (or make a small amount of money). This really underscores the challenge of creating a venture portfolio that produces reasonable returns. 1/3 of companies do well.

IRR 133

IRR Portfolio Distribution Venture Capital 133

Hippoland

NOVEMBER 13, 2016

The #1 problem with the venture capital game, in general, is that *actual success* is measured over decades not years. 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.

IRR 48

IRR Valuation Portfolio Due Diligence 48

The Equity Kicker

MAY 27, 2015

This applies to all classes of fund managers, including pension fund managers, IFAs, private equity fund managers, and venture capital fund managers. The definitive answer to these questions will come over time as our portfolio matures, our companies exit, and we can demonstrate a high cash to cash IRR.

Cost 60

Cost IRR Private Equity Salary 60

VC Adventure

AUGUST 12, 2014

The typical “successful” venture portfolio is often described as having the following outcome: 1/3 of companies fail. 1/3 of companies return capital (or make a small amount of money). This really underscores the challenge of creating a venture portfolio that produces reasonable returns. 1/3 of companies do well.

IRR 122

IRR Portfolio Distribution Finance 122

This is going to be BIG.

DECEMBER 28, 2013

However, in this moment, I think one''s career in venture capital depends on changing your perspective. If you are a venture capital investor and you''re not preparing yourself to succeed in a more diverse ecosystem of entrepreneurs, you''re just going to get left behind. Venture Capital & Technology'

Venture Capital 152

Venture Capital Cofounder IRR Dilution 152

David Teten

NOVEMBER 17, 2011

By definition, IRR is calculated using amount invested, amount received at some point in the future, and time passed between the two cash flows. According to the Kauffman study “ Returns of Angel Investors in Groups ”, the mean IRR of angel investments hovered around 27% as of November 2007.

Employee 155

Employee IRR Startup Mexico 155

David Teten

AUGUST 21, 2019

Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? The RBI investor is motivated to help the company grow because that speeds up the pace of revenue payback, and therefore IRR. RBI capital is normally treated as debt. Who are the major Revenue-Based Investing VCs?

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

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. And when we do, a world of opportunities open up that are anything but institutional.

Omaha 91

Omaha Accredited Investor IRR Silicon Valley 91

K9 Ventures

DECEMBER 14, 2008

In my previous post , I claimed that “Venture Capital is a people business in every sense of the word. What early-stage venture capital is betting on is people. The other form of scaling in venture capital is that of the size of the venture funds.

IRR 99

IRR Bandwidth Venture Capital Early Stage 99

Growthink Blog

MAY 21, 2014

There were some great responses to my post last week as to the poor returns experienced by venture capital fund investors. This flexibility is a game changer, as when done right it can provide managed, diversified exposure to a portfolio of deals and opportunities inaccessible via more “traditional” means. Labor Arbitrage.

San Diego 72

San Diego Warrant IRR Investment Bankers 72

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

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. So, God made a VC! and then finish a hard days work with a five mile drive to the home-by-the-sea.

Liquidation Preference 55

Liquidation Preference IRR Due Diligence LP 55

K9 Ventures

MAY 14, 2011

I define a super angel as an individual investor, who is investing his or her own capital, but doing so on a full-time basis , i.e. this individual has decided to be a professional investor. 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.

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. And what have been the pros and cons of taking venture capital? What impresses angels?

Angel Investor 161

Angel Investor Technical Review Due Diligence Startup 161

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. But what about venture capital firms? Indiegogo is a ffVC portfolio company. Now we can.

Venture Capital 114

Venture Capital Accredited Investor IRR Later Stage 114

Agile VC

NOVEMBER 13, 2012

There are some obvious structural reasons why a shakeout in the venture capital industry takes a long time. The lights are usually still on, both literally and metaphorically, and there are often follow-on investments in existing portfolio companies still being made. The lights go off and whoever is still there moves on.

LP 154

LP Portfolio Venture Capital IRR 154

Startup Professionals Musings

MAY 9, 2011

Luckily for me (and regardless of what anyone else says, there is a lot of luck involved in angel investing), I have since had significant positive exits to companies like Kodak, CBS and Facebook, and the current value of my portfolio is approaching the 30% IRR that rational angels target.

New York 221

New York Accredited Investor Advisory Board IRR 221

abovethecrowd.com

APRIL 20, 2016

In Silicon Valley boardrooms, where “growth at all costs” had been the mantra for many years, people began to imagine a world where the cost of capital could rise dramatically, and profits could come back in vogue. Competition also has access to capital. Anxiety slowly crept into everyone’s world. 2015 was the exact opposite.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

K9 Ventures

NOVEMBER 30, 2008

The business of venture capital is relatively young. The birth of modern-day venture capital (not considering the European monarchs financing explorations and projects as venture capital) can be traced back to American Research and Development, which was started by Georges Doriot. The money side is flexible.

IRR 48

IRR Venture Capital LP Early Stage 48

Venture Chronicles

JUNE 30, 2010

The sky is falling on the venture capital rainmakers. 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. Tags: Uncategorized VC IRR.

IRR 36

IRR IPO Venture Capital Portfolio 36

David Teten

NOVEMBER 23, 2020

Blue Future Partners, a venture capital fund of funds, recently interviewed me on ESG in venture capital. For example, I’m an investor via ff Venture Capital in: – Plated.com is a meal kit company, delivering you the recipe and fresh ingredients to make a gourmet meal in your own kitchen.

Venture Capital 60

Venture Capital Partner Technical Review Cofounder 60