Startup Professionals Musings

DECEMBER 27, 2014

Based on the best evidence I can find, the genesis of this trend and the advantages come from several evolutionary changes in the startup investment industry, and some innovations driven by the recent recession: Venture capital funds are still recovering from the recession. Super Angels sometimes drive up valuations.

Angel Investor 260

Angel Investor Silicon Valley Startup Portfolio 260

Steve Blank

SEPTEMBER 14, 2009

Over the same 30 years, Venture Capital firms have honed their skills and strategies to match Wall Streets needs to achieve liquidity for their portfolio companies. One of the biggest mistakes entrepreneurs make is misunderstanding the role of venture capital investors. What Do VC’s Do?

Silicon Valley 217

Silicon Valley IPO Technical Review Venture Capital 217

YoungUpstarts

JUNE 26, 2020

To do that you have to show how your market is big enough (a multi-billion dollar market) to support that kind of valuation. Sangha was a graduate of University of Pennsylvania and his first venture capital investor turned out to be an alumni. Myth #3: Take the Highest Valuation You Can Get. I was wrong.

Finance 205

Finance Silicon Valley Valuation Startup 205

Steve Blank

FEBRUARY 10, 2016

Your product and company vision needs to match your appetite for funding. And know that just because a venture failed doesn’t mean that you’re a failure. He stressed that your product and company vision needs to match your appetite for funding: One thing that we learned very early on was, have a plan for fund-raising. …

Silicon Valley 120

Silicon Valley Ohio Columbus Entrepreneur 120

Startup Professionals Musings

AUGUST 13, 2016

Different types of investors tend to specialize in capitalizing on businesses at different stages. Venture capital firms look for the most mature companies they can find, Angel investors typically deal a tier lower, while friends and family are most likely to help you get started.

Matching 120

Matching Angel Investor Intellectual Property Investment Bankers 120

K9 Ventures

JUNE 5, 2015

Low supply of companies with traction drove the valuations and deal sizes up. The risk here is what I refer to as the curse of over-capitalization. The Venture Capital industry as a whole does a terrible job of giving things the right name and so we end up keeping the same name, but changing the meaning out from under it.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

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. Look at the valuations of companies like Tesla, Illumina, and Twitter. The companies that can show “startup-like” growth rates of 50% plus per year will get stratospheric market valuations.

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". How about price?

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

Steve Blank

JULY 15, 2010

If you take funding from a venture capital firm or angel investor and want to build a large, enduring company (rather than sell it to the highest bidder), this isn’t the decade to do it. The collapse of the IPO market and dysfunctional math in the venture capital community has stacked the odds against you. Here’s why.

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

Cracking the Code

NOVEMBER 10, 2009

The internet is your new channel and Technology Enabled Service providers are among the few partners that actually care if you succeed (more.) Cloud accounting is all about matching revenue and costs to consumption…well, except for professional services! 2 comments: Peter Cohen Managing Partner, SaaS Marketing Strategy Advisors.

Software Review 48

Software Review Cloud Technical Review Sales Cycle 48

Berkonomics

JUNE 8, 2017

It is most common to greatly overprice such a round of financing, valuing the enterprise well above what it may be worth at the moment for friends or related investors who do not have the sophistication or willingness to challenge the valuation. It is most often a win-win for both you and the strategic partner.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Gust

DECEMBER 21, 2011

You are much more flexible than VCs or strategic partners – they prefer not to travel, a they have lots of local opportunities to invest their money. Don’t attempt to emulate Stanford and MIT when you can’t match their entrepreneurial landscape. Unfortunately, there are not many good examples.

Silicon Valley 107

Silicon Valley Southern California Tucson Seattle 107

The Equity Kicker

JULY 8, 2019

When I started in venture capital in the late 1990s VCs were regularly lambasted for taking long summer holidays and spending too much time on the golf course. Then from the mid 2000s, value add began moving beyond the partner to the firm as VCs began employing people who’s full time job was helping their portfolio.

Portfolio 84

Portfolio LP Venture Capital Partner 84

The Equity Kicker

FEBRUARY 9, 2016

A lot of them are focused on Series A investing and favour the ecommerce and marketplace sectors that Forward Partners focuses on. implying that an awful lot of non-VC money flowed into the ecosystem (the column headings in the charts are a little ambiguous, but the explanation I’ve given matches what Mark wrote here ).

Marketing 60

Marketing Institutional Investors Venture Capital Later Stage 60

genylabs.typepad.com

SEPTEMBER 24, 2011

Steve and Carolyn are partners at Emergent Research and Senior Fellows at the Society for New Communications Research. Even the best venture capital firms have a lot of failures and few successes. The letters and numbers you entered did not match the image. MBO Partners State of Independence in America Study.

Equity 40

Equity Technical Review San Jose Stock 40

The Equity Kicker

AUGUST 19, 2015

Note that these returns are from the value of YC’s stake in the company, not the total valuation. To have more confidence that their investments match their new found levels of ambition I imagine the YC partners are drawn towards companies that have more validation of their market size.

Later Stage 60

Later Stage Private Equity Venture Capital Valuation 60

Both Sides of the Table

NOVEMBER 4, 2009

Let’s assume that the company raised it at a normal VC valuation, which means it gave up 33% of the company and thus $5 million / 33% = $15 million post-money valuation. But you need to match your talents, age, skills, ambition and economic situation with your current reality. They raised $5 million in their B round.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

ReadWriteStart

SEPTEMBER 8, 2010

One of the big debates in the venture capital industry lately has been the growing argument between so-called "super angels" and traditional VCs - the former being prone to mention how they feel the latter "sucks." Funding through milestones such as these will allow you to raise subsequent rounds of capital at higher prices," he says.

Startup 118

Startup Early Stage Venture Capital Valuation 118

Cracking the Code

DECEMBER 2, 2006

The time they spend with customers is usually limited to transactional core products sales, generating lower margins – The resource allocation is not always matching the opportunity (geography, customer segment, vertical.) – The rules of engagement for technical resources (solution or product specialists) are not clear.

Software Review 48

Software Review Technical Review Europe Software 48

Both Sides of the Table

AUGUST 1, 2010

Many (Union Square Ventures, Foundry Group, True Ventures, GRP Partners, Mike Hirshland at Polaris Ventures) do it the right way – we treat it as a normal investment and we don’t have a “options&# strategy with our investment. and (Is There Really a Signaling Problem with VC Seed Funding?).

Post-Money Valuation 298

Post-Money Valuation Term Sheet Warrant Partner 298

This is going to be BIG.

APRIL 19, 2011

I’ve never heard of an entrepreneur who had a successful exit who laments the price that they raised their first round valuation at. You can shoot yourself in the face in all sorts of ways by not matching your cash needs and milestones to how much money you raise—way more than using the “wrong” security.

Paraguay 110

Paraguay Dilution Valuation Seed Stage 110

Babbling VC

APRIL 3, 2011

It's kind of funny that the majority of people coming to me are obviously looking to raise venture capital and don't have this discussion with me. I have no idea whether any other VC would so openly say this but if you can avoid taking venture capital, do so at all costs. Venture capital screws everything up.

Venture Capital 81

Venture Capital Bootstrapping Global Valuation 81

Berkonomics

JANUARY 20, 2010

It is most common to greatly overprice such a round of financing, valuing the enterprise well above what it may be worth at the moment for friend or related investors who do not have the sophistication or willingness to challenge the valuation. Do not expect grand valuations of your enterprise from these professional angels.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

This is going to be BIG.

NOVEMBER 7, 2011

Valuations. There are a ton of companies being funded at $500+ million valuations--seriously limiting exit opportunities. Many of the private companies like AirBnb, Dropbox, and Square and that have been rumored to have big valuations are real, growing businesses. Are their valuations justified? A bubble burst?

Angel Investor 104

Angel Investor Valuation Startup Revenue 104

Steve Blank

NOVEMBER 5, 2009

This post describes how companies using the Customer Development model can increase their credibility, valuation and probability of getting a first round of funding by presenting their results in a “Lesson Learned&# venture pitch. Did the partner have a good or bad day, etc. Did the VC’s like your team ?

Customer Development 262

Customer Development Developer Customer Silicon Valley 262

Steve Blank

FEBRUARY 26, 2020

Luckily, I teach with two great VCs, Mar Hershenson of Pear Ventures and Jeff Epstein of Bessemer Venture Partners who both put together presentations unraveling the mysteries of how and why startups raise money. On the other hand, in a SaaS business $1 in recurring annual revenue equals ~10x in valuation.).

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Startup Professionals Musings

AUGUST 13, 2018

The hard work begins then, in finding a match for your domain and solution readiness stage, as well as an investor that matches your vision, values, and needs. It’s also the place to meet future partners positively, and even competitors before they realize they should hate you.

Due Diligence 140

Due Diligence Equity Angel Investor Matching 140

reidhoffman.org

NOVEMBER 12, 2013

× At Greylock , my partners and I are driven by one guiding mission: always help entrepreneurs. Friendster’s valuation set the tone for the entire social networking space. Neither is a particularly good backdrop for trying to raise capital, because. What will that partner tell their partners? Reid Hoffman.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

www.currentlyobsessed.com

MAY 28, 2010

Snapvine was my first experience being in the driver’s seat of the fund-raising process, and in the 3 years prior to our acquisition we raised over $10mm in venture capital. Valuation is an important aspect of VC deal terms, and a major determinant of your ultimate outcome. Or is it?

Valuation 42

Valuation Channel Pre-Money Valuation Term Sheet 42

Both Sides of the Table

MARCH 6, 2011

I still think it’s best to take money from Dave when you’re also partnered with a more focused, hands-on seed-stage VC who brings different things to the table – like more ability to write larger checks in a downturn (for one) or solving a deep crisis that involves super hands-on involvement. I argue the opposite.

Valuation 292

Valuation Deal Flow Lead Investor Cofounder 292

www.businessinsider.com

SEPTEMBER 6, 2012

This Chart Shows Why VCs Are Willing To Give Hyped Startups Absurd Valuations. Y Combinator founder Paul Graham, the influential advisor to dozens of startups like Dropbox and Airbnb , sent his entrepreneurs an email Wednesday afternoon cautioning them against taking "lowball offers"—in particular, he said, from Google Ventures.

Silicon Valley 54

Silicon Valley Startup Valuation Venture Capital 54

Ben's Blog

MAY 24, 2021

Editor’s Note: This testimony was delivered by a16z managing partner Scott Kupor to the U.S. By way of background, I am the Managing Partner for Andreessen Horowitz, a $16.5 billion multi-stage venture capital firm focused on IT-related investments… I also serve on various investment committees, including for the St.

SEC 36

SEC Accredited Investor IPO Technical Review 36