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. Unprecedented revenue growth + companies staying private longer =. Why is this?

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

David Teten

SEPTEMBER 23, 2017

I’ve primarily seen quantitative analytic techniques used in origination , filtering , and in portfolio company recruiting , but technology can be used throughout the nine steps of the private company investing process: The 9 Steps of the Private Company Investing Process. 8) Accelerate portfolio company value. 9% (1 / 12).

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

David Teten

AUGUST 21, 2019

Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. For more background, see Revenue-Based Investing: A New Option for Founders who Care About Control. But should they? Aligned incentives.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

David Teten

JANUARY 21, 2021

This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. II: Who are the major Revenue-Based Investing VCs? III: Why are Revenue-Based VCs investing in so many women and underrepresented founders? IV: Should your new VC fund use Revenue-Based Investing?

Equity 78

Equity Revenue Cofounder Colorado 78

VC Adventure

MAY 5, 2022

In markets like this, funds that deploy quickly generate markups on their full portfolio; those that show more patience suffer from an IRR perspective as a larger portion of their fund is yet to be marked up by subsequent financing rounds. Traditionally LPs have viewed this as positive. management fee).

IRR 116

IRR Metrics Valuation LP 116

Both Sides of the Table

OCTOBER 14, 2015

I spoke at Michael Kim’s excellent annual Cendana VC/LP conference today. But like many companies over the past five years it hired aggressively and probably had some degree of straying off of a core strategy and some amount of excess jobs relative to its current revenue forecasts and opportunities. Here’s my take away.

Burn Rate 150

Burn Rate San Francisco Private Equity LP 150

David Teten

DECEMBER 3, 2019

However, in private markets, there is more room to optimize across all 11 steps of the investing process: firm management , marketing, fundraising , origination , manage relationships, due diligence, negotiation, monitoring, portfolio acceleration , reporting, and.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

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

YoungUpstarts

NOVEMBER 18, 2018

Your team, including a knowledgeable patent attorney, will This not only creates a revenue stream, but also ensures that there is an on-going process of adding additional intellectual property to the original patent, creating a perpetual licensing income stream. and Alarmforce LP, SkyBell Technologies, In August Home Inc.,

Intellectual Property 138

Intellectual Property Forecast LLC Acquisition 138

Both Sides of the Table

MAY 24, 2021

It has historically been the case that VCs would rather fund the promise of 100x in a company with almost no revenue than the reality of a company growing at 50% but doing $20+ million in sales. 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

Bryce Dot VC

APRIL 28, 2016

As an aside- the discrepancy here is likely due to definitions: Andy defines a “good deal” as one that generates over $100M in revenue, Eileen defines them as companies valued at $1B or more. Given a universe of 60,000 investments, these “good deals” make up only.07% 07% of total deal.

Silicon Valley 40

Silicon Valley LP Term Sheet IPO 40

Bryce Dot VC

NOVEMBER 19, 2012

Given how quickly we’re seeing startup bubblettes emerge, we decided to raise a little more cash now to provide for greater time diversity within the portfolio. As a seed investor, we’ve always leaned towards larger rounds in favor of giving our founders at least 18 mo of runway with no revenue.

Seed Stage 61

Seed Stage LP Incubator Venture Capital 61

Altgate

MARCH 8, 2009

Growth stage investors are usually the Series B or C investors who come in when the product is in the market but there is little or no revenue and the team is probably in the 20-something range with the goal to ramp it up to 40-50 employees with the new money, build out a sales team, etc. But some will be saved. “Series B&# funds.

Later Stage 34

Later Stage Early Stage Venture Capital Portfolio 34

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. That’s a great question!

Product 82

Product IRR LP Portfolio 82

Both Sides of the Table

MARCH 30, 2016

They either had a portfolio company in market and weren’t getting offers as quickly as expected or they knew a friend in the biz who was recounting this to them in a session VCs strangely call “comparing notes.”. Here are some stats to give you a sense: • Year over year revenue grew 51% in 2015 and we’re forecasting the same again for 2016.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

Hunter Walker

MAY 2, 2016

I’ve written before about our LP meetings – if you want to check those out before hearing about 2016’s version, here you go: Homebrew Annual Meeting 2014. Advisory Board lunch w our largest investors followed by a State of Homebrew, State of the Market, State of our Portfolio presentation. Ok, now back to present day.

Advisory Board 48

Advisory Board LP Institutional Investors Portfolio 48

Hunter Walker

MAY 2, 2016

I’ve written before about our LP meetings – if you want to check those out before hearing about 2016’s version, here you go: Homebrew Annual Meeting 2014. Advisory Board lunch w our largest investors followed by a State of Homebrew, State of the Market, State of our Portfolio presentation. Ok, now back to present day.

Advisory Board 48

Advisory Board LP Institutional Investors Portfolio 48

K9 Ventures

DECEMBER 10, 2011

” Now that last statement is a little off, since I have a portfolio company in Berkeley and one as far south as San Jose. And, even though I do enjoy meeting up with the founders in my portfolio for lunch every couple of months, the majority of the interactions with my portfolio founders still happens over email or phone.

Silicon Valley 124

Silicon Valley San Jose Portfolio Cofounder 124

K9 Ventures

DECEMBER 10, 2011

” Now that last statement is a little off, since I have a portfolio company in Berkeley and one as far south as San Jose. And, even though I do enjoy meeting up with the founders in my portfolio for lunch every couple of months, the majority of the interactions with my portfolio founders still happens over email or phone.

Silicon Valley 112

Silicon Valley San Jose Portfolio Cofounder 112

abovethecrowd.com

APRIL 20, 2016

A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. One response from the LP community might be to demand commitments from new funds that prohibit inside-led rounds and cross-fund investing. The same thing happened to many Internet stocks.

IPO 40

IPO Term Sheet Valuation Silicon Valley 40

This is going to be BIG.

SEPTEMBER 7, 2012

I know, because those people all used to pitch me as an institutional LP back in the day. In the late 90's, it wasn't surprising that companies with no revenue that were funded at 100 million dollar valuations didn't survive. Sure, when those periods hit, they hit bad, but most of the time, they hit the poorly prepared companies worse.

Later Stage 99

Later Stage Down Round Pre-Money Valuation Early Stage 99

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 LP perspective.

IRR 48

IRR Venture Capital LP Early Stage 48

David Teten

MARCH 18, 2021

Investment theses are just hypotheses; the portfolio shows how accurate the hypothesis was. Thirty-four VC firms in OpenVC call themselves “early-stage” Yet, 30% of those don’t actually invest in pre-revenue startups. Investment theses are just hypotheses; the portfolio shows how accurate the hypothesis was.

Technical Review 78

Technical Review Cofounder Venture Capital B2B 78

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