Version One Ventures

SEPTEMBER 22, 2021

When I started Version One Ventures in 2012, every experienced VC shared the same rule of thumb: we had to return 3x net consistently to stay in business (i.e. 3x the invested capital net of fees over a period of about ten years for a net IRR in the low twenties).

Venture Capital 201

Venture Capital IRR Private Equity Seed Stage 201

Steve Blank

AUGUST 5, 2014

Kathryn has been the founding VP of Marketing of Oracle , a successful recruiter, a world class Venture Capitalist, a co-founder of a Venture Capital firm, a great board member, one of my mentors and most importantly a wonderful friend. The answer of course, was Venture Capital, but that was not in the cards—as yet.

Venture Capital 333

Venture Capital Silicon Valley Chicago Cofounder 333

Startup Professionals Musings

MARCH 12, 2023

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. The amounts from angels start as low as $25K, while minimum venture capital amounts usually start in the $2M range. In fact, the reality is quite the opposite.

Angel Investor 246

Angel Investor IRR Venture Capital Valuation 246

David Teten

JANUARY 19, 2021

Similar to the explosion of seed funds in the past decade, we (and some limited partners too ) believe these Flexible VCs are on the forefront of what will become a major segment of the venture ecosystem. We detail below the major categories of VC: VENTURE CAPITAL TYPOLOGY. FLEXIBLE VC VS. OTHER VENTURE CAPITAL MODELS.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

MAY 9, 2014

David is also the CEO of Gust , which is an online platform for startup financing used by over 50,000 accredited angel investors, 1000 angel groups and venture capital funds, and 250,000 entrepreneurs. There is a rarified brand of successful investors who can show average IRRs of 25 percent or greater over the years.

Angel Investor 278

Angel Investor Angel Groups Accredited Investor IRR 278

VC Cafe

MARCH 8, 2010

Only three Israeli venture capital funds completed their fund raising efforts in 2009: Sequoia Capital Israel , announced final closing of Sequoia IV, a $200 million vintage 2009 fund. These losses have reduced capital available for investments. Capital Raised by Israeli VC funds by Vintage Year* ($B) 2000-2010(E).

IRR 74

IRR Venture Capital Institutional Investors 74

Startup Professionals Musings

JUNE 13, 2020

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. The amounts from angels start as low as $25K, while minimum venture capital amounts usually start in the $2M range. In fact, the reality is quite the opposite.

Angel Investor 314

Angel Investor Entrepreneur IRR Valuation 314

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? Now we can. Indiegogo is a ffVC portfolio company.

Venture Capital 114

Venture Capital Accredited Investor IRR Later Stage 114

Startup Professionals Musings

JUNE 5, 2015

David is one of the most active angel investors in New York, and also the CEO of Gust , which is an online platform for startup financing used by over 45,000 accredited angel investors, 1000 angel groups and venture capital funds, and 200,000 entrepreneurs. billion collected in 2014.

Angel Investor 120

Angel Investor Angel Groups Accredited Investor IRR 120

VC Adventure

OCTOBER 5, 2020

Some of the most popular posts I’ve written over the past couple of years were the two that focused on just how rare outsized returns for an individual deal are in venture capital. Taking the most aggressive end of these numbers would still only have this one company returning 70% of the fund’s capital.

IRR 174

IRR Venture Capital Community Partner 174

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

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. Time is the enemy of IRR.

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

Up and Running

DECEMBER 22, 2015

My personal favorite in the “pure nonsense category” is the IRR, the Internal Rate of Return , something that was interesting for about one hour as part of the MBA curriculum, but which has no relevance in the real world. See Also: 17 Venture Capital Blogs You Should Be Reading. You’re out of school now.

Angel Investor 60

Angel Investor IRR Software Review Startup 60

Up and Running

AUGUST 19, 2014

And what have been the pros and cons of taking venture capital? Forget the stupid IRR (that’s internal rate of return) that they taught you in business school. Funding a Business Venture Capital and Angel Investors angel funding angel investment Angel Tips Ask an Angel' What impresses angels?

Angel Investor 161

Angel Investor Technical Review Due Diligence Startup 161

Startup Professionals Musings

AUGUST 2, 2014

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited Angel investors. The amounts from Angels start as low as $25K, while minimum venture capital amounts usually start in the $2M range. In fact, the reality is quite the opposite.

Angel Investor 266

Angel Investor Entrepreneur Venture Capital IRR 266

Steve Blank

JUNE 11, 2013

These sources are a lot more forgiving of iterations and pivots than later-stage venture-capital funds. In times of unlimited cash (internet bubbles, frothy venture climates) you can fix your mistakes by burning more dollars. The day you raise money from a venture investor, you’ve also just agreed to their business model.

Venture Capital 333

Venture Capital IRR Liquidity Event Business Model 333

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

Steve Blank

JUNE 11, 2013

These sources are a lot more forgiving of iterations and pivots than later-stage venture-capital funds. In times of unlimited cash (internet bubbles, frothy venture climates) you can fix your mistakes by burning more dollars. The day you raise money from a venture investor, you’ve also just agreed to their business model.

Venture Capital 225

Venture Capital IRR Liquidity Event Business Model 225

Startup Professionals Musings

FEBRUARY 5, 2018

More capital is available for scaling and brand building. With the growth of angel investing in the last decade to venture capital levels, and the more recent crowdfunding to match both combined, there is more capital available for growth than ever before.

IRR 143

IRR Marketing Startup Angel Investor 143

Startup Professionals Musings

JUNE 5, 2016

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited Angel investors. The amounts from Angels start as low as $25K, while minimum venture capital amounts usually start in the $2M range. In fact, the reality is quite the opposite.

Angel Investor 120

Angel Investor IRR Valuation Startup 120

Seeing Both Sides

SEPTEMBER 26, 2010

Venture capital investors are historically accustomed to being the wolf. A little IRR math shows the price of this elongated time to liquidity – a 5x return in 5 years yields a 38% IRR. As you might expect, the wolves have the edge in the encounter, due to superior market information or negotiating position.

IRR 36

IRR IPO Entrepreneur LP 36

Both Sides of the Table

OCTOBER 17, 2019

Just as I was getting the swing of things the world shifted beneath my feet and the stock market went into a free fall and venture capital all but shut down for nearly a year. It proved to be fortuitous because it allowed me the time & space I needed to get to know tons of founders and VCs and to hone my craft.

IP 223

IP Intellectual Property IRR Cofounder 223

Up and Running

JUNE 17, 2013

And Internal Rate of Return (IRR)? Finance angel investment IRR ROI venture capital' I’ll look at your plan instead and figure out what I think you can do. I trust my judgment on that. If you’re the one telling entrepreneurs they need to show some fantastic return on investment, stop it.

IRR 71

IRR Flash Angel Investor Venture Capital 71

VC Adventure

AUGUST 12, 2014

If you were to actually construct a portfolio based on these averages, a $ 100M venture fund investing in 20 companies would produce a gross return of approximately $ 206M (that’s before fees and expenses). Venture Economics venture capital returns venture economics venture math venture returns'

IRR 133

IRR Portfolio Distribution Venture Capital 133

Steve Blank

JUNE 23, 2016

As a consequence, corporations used metrics like return on net assets (RONA), return on capital deployed, and internal rate of return (IRR) to measure efficiency. For the first 75 years of the 20 th century, when capital for new ventures was scarce, the smartest engineering talent went to corporate R&D labs.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

Andrew Payne

MARCH 25, 2009

The venture capital business is in the middle of a shakeout. For too long, venture’s been over-funded and over-staffed with homogeneity: the same kinds of partners, operating with the same fund model, looking at the same investments, in the same markets.

Venture Capital 40

Venture Capital IRR Capital Call Distribution 40

David Teten

APRIL 8, 2013

Based on a range of sources, we believe that most funds with well-developed Portfolio Operator models have top-quartile returns (typically above 20% IRR in the relevant time periods). Analytics and Data Contributed Articles Portfolio Operations Private Equity Venture Capital'

Private Equity 114

Private Equity Hungary IRR Venture Capital 114

Hippoland

NOVEMBER 13, 2016

The #1 problem with the venture capital game, in general, is that *actual success* is measured over decades not years. A common intermediary milestone for most investors is IRR (internal rate of return) of the fund. So there are a lot of unrealized gains built into the IRR of an early fund. Let’s take this one last step.

IRR 48

IRR Valuation Portfolio Due Diligence 48

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

The Equity Kicker

OCTOBER 25, 2012

One of the world’s larger investors in venture capital recently shared data with us about the multiples they have made on over 5,000 companies they had stakes in via their LP investments in US VC funds. So think of the following as the profile of a successful fund rather than an average fund.

LP 150

LP IRR Venture Capital Naming 150

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

Tim Keane

JANUARY 12, 2010

  I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.]   Internal Rates of Return naturally compound, so a 50% IRR is 7.59

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

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

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

David Teten

JANUARY 28, 2013

The good news for Techcrunch readers: Every major study conducted to date has placed angel investors’ IRR between 18 and 38 percent, as summarized by my Partner John Frankel and Professor Robert Wiltbank in prior Techcrunch articles. Every major angel study conducted to date has shown high IRR.

IRR 114

IRR Angel Investor Angel Groups Cofounder 114

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

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.

Omaha 91

Omaha Accredited Investor IRR Silicon Valley 91