Both Sides of the Table

OCTOBER 12, 2014

But with the massive growth of seed funds being raised and the huge value increase of prorata rights many more LPs have stepped in to take their VC (industry term is GP) position. What would you do as an LP fund if you backed a seed-stage GP who had a position in Twitter, Pinterest, etc. Why prorata rights are being guarded by VCs.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

JUNE 19, 2015

I’ve met many VCs who take fund raising meetings with lots of LPs but struggle to get traction and I believe often the problem is that first meetings are easy but the 28 steps to get each LP to closure take an insane amount of focus, effort, follow through and discipline. Opening is easier than closing.

LP 150

LP Warrant Portfolio Framework 150

Both Sides of the Table

FEBRUARY 18, 2017

Yves didn’t want to step down — he is still as active as any partner on our team — but he wanted me to take responsibility for: Strategy, recruiting, team development, LP relations, financial planning, etc. He did what every LP did, looked at returns, talked to portfolio companies, talked with our competitors and so forth.

Leadership 161

Leadership LP Venture Capital Silicon Valley 161

Both Sides of the Table

FEBRUARY 20, 2019

And by the D rounds you have often taken some amount of strategic money or potentially LP money and at times these groups ask for board observer seats and not full board seats. If the VCs on your board have developed good rapport and trust each other then often times one VC will trust the other to represent his or her interests.

Venture Capital 236

Venture Capital Startup Angel Investor Silicon Valley 236

Both Sides of the Table

FEBRUARY 25, 2019

We then do a cocktail party so that everybody can have informal conversations (including LP to LP) and then we do a dinner in a private room at a restaurant. We do lunch where everybody has a casual conversation followed by 6 hours of content and discussion.

LP 269

LP Startup Burn Rate Stock Options 269

Both Sides of the Table

SEPTEMBER 22, 2012

Instant growth = huge valuation from follow-on investors = big VC mark-up on our quarterly reports = LP interest. They want to know that you’re in Twitter, Facebook, Square, Fab and the like. Grow or die. I don’t really think the incentives work well in this scenario. ” How’d that turn out in the late 90′s?

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

Both Sides of the Table

MAY 27, 2013

Any CEO worth his or her salt knows that her investors get an insane amount of emails and often spend 8+ hours / day in meetings (board meetings, pitches, partner meetings, LP meetings, corporate relationship meetings) so often email is done on the run on one’s iPhone or in the early morning / late evening.

Advisory Board 365

Advisory Board CTO Hire Fractional CTO Los Angeles 365

Both Sides of the Table

MAY 6, 2015

Most importantly – this should encourage LP funds to back more local firms and I would hope to see more indigenous funds to develop. There are so many great, young funds in the market and many of them are attracting LP capital.

LP 150

LP Los Angeles Marketing Partner 150

Both Sides of the Table

JULY 23, 2014

At the other end of the spectrum large funds have gotten even larger in the past few years which has massively increased the amount of consolidation in our industry as 66% of LP money into venture is now concentrated in late-stage or full-cycle VCs. Why is this?

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

Both Sides of the Table

FEBRUARY 26, 2014

But for now … Every year we run a big VC, LP & Tech Summit in Los Angeles (this year downtown) to showcase the best of our community and invite others from around the country. What the fork happened to you? And what’s up with this crazy new blog design? Well … more on that next week. I will tell more.

Los Angeles 290

Los Angeles LP Startup Portfolio 290

Both Sides of the Table

SEPTEMBER 29, 2013

I had a chance to discuss AngelList Syndicates with Naval at Michael Kim’s Cendana LP/VC conference on a panel with Naval, Roger Ehrenberg (IA Ventures) and Mike Brown, Jr. Many of the good and great of our industry are talking about AngelList. Must be doing something right! Bowery Capital).

Syndicate 356

Syndicate Syndication Cofounder Early Stage 356

Both Sides of the Table

JANUARY 5, 2010

If your idea is so amazing that it warrants my hard-earned angel money or the money of my LP investors from our fund then why should I take a risk on you if you won’t take a risk on yourself? But to me if you’re not willing to quit and take a risk on yourself, then you’re not confident enough in your own idea and skills. Why should I be?

Entrepreneur 293

Entrepreneur CTO Hire South America Salary 293

Both Sides of the Table

FEBRUARY 4, 2016

” There are a lot of data points that one can observer to get a sense of the venture capital markets – both LP fundings into venture and VC financings of startups. We surveyed 73 LP firms to get their views on the market. “This is the year the tortoise may gain on the hare.” How do I know?

LP 150

LP Valuation Burn Rate Pre-Money Valuation 150

Both Sides of the Table

JUNE 29, 2014

I saved it mostly for LP discussions that I had over the past year. I presented the deck below – which was prepared with the great help of Upfront Venture’s Principal Jordan Hudson – at Dave McClure’s must attend event called PreMoney with much more data and narrative than I had in my blog post.

Venture Capital 362

Venture Capital IPO LP Jordan 362

Both Sides of the Table

MAY 25, 2013

But as an LP you can’t count on that any more than VCs can. The goal of an LP is to get into the top decile. When it went to raise its fund 10 years ago the rumor was that many LPs were disappointed with recent returns and did not re-up. In 2000 our industry had more than $100 billion in LP money. hours / day.

LP 374

LP Later Stage IRR Term Sheet 374

Both Sides of the Table

MARCH 11, 2014

Last week displayed the best of LA last week for a gala event of all of Upfront’s portfolio companies + the CEOs of many of LA’s top technology companies + 75 VC firms from LA, SF, NY & Boston + 25 LP Funds + the Chairman of Yahoo! Maynard Webb) and the Mayor of Los Angeles, Eric Garcetti.

Los Angeles 318

Los Angeles Silicon Valley LP Warrant 318

Both Sides of the Table

FEBRUARY 6, 2017

WINTER For starters when we conducted our annual VC & LP survey in December of 2016 to prepare our annual Upfront State of the VC Industry report we found that twice as many VCs cut their investments in 2016 relative to 2015 with > 30% of VCs having cut investments. Unless of course something Trump’s our good weather.

Venture Capital 150

Venture Capital Saudi Arabia Kuwait Burn Rate 150

Both Sides of the Table

FEBRUARY 6, 2019

If you get into the best deals it has never been a better time to be a VC or LP, and the best have developed strategies to capture more value Given that the best deals are pushing out their exit dates it means that many firms aren’t seeing as quick of liquidity as they might have 20 years ago.

Venture Capital 292

Venture Capital IPO Mezzanine Early Stage 292

Both Sides of the Table

MAY 27, 2016

I was asked again in an LP meeting later in the week and then again at a founder breakfast gathering we hosted yesterday. I was speaking recently to the team at NuOrder , an LA-based company we’re an investor in about “realism in startups” — an impromptu talk I have given to any of our portfolio companies who ask.

Early Stage 254

Early Stage Non-Compete LP Later Stage 254

Both Sides of the Table

FEBRUARY 18, 2016

Up next I’ll publish all of the LP (people who invest in VCs) data we gathered and what we believe this signifies. We’re sending it directly to people’s email boxes but I figured we might as well make it public so you all have access to it. It’s linked to here where you can download it or embedded below.

Burn Rate 150

Burn Rate LP Curation Valuation 150

Both Sides of the Table

SEPTEMBER 1, 2016

What’s an LP to do in deciding which funds to invest in? Now — I’m not saying it wasn’t already a spectacular fund — I believe Sequoia is the best VC in the industry in terms of consistently amazing returns. But I’m making the opposite point. A16Z could be sitting on several deals that could be worth 15x what they are today. We can’t know.

LP 264

LP Jordan Cofounder Limited Partner 264

Both Sides of the Table

MAY 19, 2013

To attract LP money to local VCs. We can try to reinvent Hollywood film and TV (Hulu, Epoxy.tv, Blayze, Chill, TasteMade) or we can watch it migrate out of our city. Garcetti understands this and having a vocal and visible leader amongst us is so important to win at the margin. To attract companies to locate and stay in LA.

Los Angeles 325

Los Angeles San Francisco LP Austin 325

Both Sides of the Table

APRIL 21, 2020

Of our early-stage deals we do 33% Seed, 66% A’s) Why recycling is important, but why without exits you might even be forced to stop paying management fees for a while What Will Happen with LPs in this Economic Market? Harry asked me whether I thought LP “defaults” (not funding the VC commitments it made) would go up.

Marketing 263

Marketing Valuation Churn Rate Balance Sheet 263

Both Sides of the Table

MAY 23, 2012

Thomson Reuters data shows that around $10 billion of LP money went into VCs per year pre bubble. By 2000 the total LP commitments had mushroomed to more than $100 billion. LP contributions to VC firms shrunk from 2000 and by 2005-2008 had stabilized to around $30 billion per year. The Funding Problem.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Both Sides of the Table

AUGUST 10, 2013

It came after only a few hours of sleep in which I had a meeting in the morning with an LP who will be smiling if he reads this because he knows that I had to stand for my whole meeting with him in order to get through the meeting. Which come to think of it means I’ve really learned nothing at all in my old age. Startup Advice'

Startup 412

Startup San Francisco LP Bankruptcy 412

Both Sides of the Table

OCTOBER 14, 2015

I spoke at Michael Kim’s excellent annual Cendana VC/LP conference today. Here’s my take away. This will be seen as a watershed moment in the wake-up call and rationalization of our industry. You can read it in VCs discussions about hedge fund managers, activist investors or the need to have dual-share voting structures.

Burn Rate 150

Burn Rate San Francisco Private Equity LP 150

Both Sides of the Table

APRIL 10, 2016

Build a long-term LP based, anchored by diverse asset types (Universities, Endowments, Family Offices, Pensions, Insurance Companies, Sovereign Wealth Funds & Fund of Funds). Upfront: “Direct, Approachable, Early-Stage, WYSIWYG & Unmistakenly Los Angeles” (Upfront is also a term from the media sector).

Los Angeles 150

Los Angeles Early Stage LP Partner 150

Both Sides of the Table

MAY 24, 2021

LPs Haven’t Yet Grokked the Long Game While the VC community realized 5ish years ago that short-termism in venture capital didn’t make sense and has capitalized on the scale advantages of letting companies go long, the LP community by and large hasn’t totally grokked this.

Venture Capital 363

Venture Capital LP Valuation Later Stage 363

Both Sides of the Table

MAY 7, 2018

I figured I was wasting my time unless the LP was leaning in on my first meeting. The hardest thing is that after you’ve had a great first meeting with a VC (or LP) you expect it’s all going to start happening! Back then I literally wouldn’t travel for any meeting unless I got an introduction first. I measured twice and cut once.

LP 215

LP San Francisco Minneapolis Partner 215

Both Sides of the Table

SEPTEMBER 28, 2011

We call these investors “LPs” for limited partners. I had lunch with an LP. I bucket some of my time every month to ongoing fund raising relationships – even in years we’re not raising. I met for coffee with one of my favorite “startup advisors” in LA.

Email 314

Email Product Term Sheet Portfolio 314

Both Sides of the Table

AUGUST 24, 2015

This doesn’t happen with every LP and it probably doesn’t kick in unless things get worse. So with my portfolio out of whack I need to be cautious about not overly committing to venture funds so I scale back until my denominator is fixed.

Stock 150

Stock Finance Marketing Valuation 150

Both Sides of the Table

MARCH 6, 2017

Every LP I speak with these days tells me, “We need to have coverage in Los Angeles — we know that” and it’s no coincidence that we’ve seen the explosion in emerging managers covering the Seed and A-round investment scene in LA.

IPO 191

IPO Los Angeles South Korea Armenia 191

Both Sides of the Table

SEPTEMBER 14, 2016

And we felt terrible not being able to let every LP in but we were forced to make some hard compromises yet we opened up our fund to Sapphire even though they were a first time LP. We have many LPs who come from industry and this is truly a value-add in a LP/VC relationship 3.

LP 150

LP Entrepreneur United States Venture Capital 150

Both Sides of the Table

JUNE 29, 2011

The LP Community Hasn’t Yet Caught Up. As I’ve started to get to know the other side of the VC industry lately (the people who invest in VC funds or “LPs&# ) one thing has occurred to me. My best guess is that new LP funds will be set up in the future to service Micro VCs. I think some will do this.

Venture Capital 296

Venture Capital Software LP Early Stage 296

Both Sides of the Table

FEBRUARY 24, 2019

While it’s true that they are investing LP money from a fund, it’s also true that the VCs are required to write large checks into their funds so every time they do a “capital call” (request money from an LP to fund you) they are also having to wire their own money into the deal. VCs most certainly do have skin in the game.

Warrant 187

Warrant LP Cofounder Founder 187

Both Sides of the Table

NOVEMBER 15, 2014

I went to see several LP funds in Boston. I figured if we couldn’t fund every company locally we should at least embrace them as a community and show that we’re willing to mentor them whether they raise their money in town or not. So what can a community do? At least twice I had conversations that went like this, “Yes.

Community 369

Community Silicon Valley Chicago Boston 369

Both Sides of the Table

MARCH 3, 2013

In a discussion I had with Fred Wilson at the Invesco LP meeting Fred said the same about the influence of Clayton. I have written about Deflationary Economics (one of my most read posts ever) & The Innovator’s Dilemma before.

Bankruptcy 403

Bankruptcy Offshore Liquidation Preference Balance Sheet 403