A VC : Venture Capital and Technology

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Convertible and SAFE Notes

A VC : Venture Capital and Technology

Angel/seed rounds used to be done via priced equity securities, either common or preferred. Then, starting about ten years ago, we started to see convertible debt being used in the angel and seed rounds. By 2010 this was the norm and Paul Graham tweeted this in Aug 2010: Convertible notes have won. Paul Graham (@paulg) August 28, 2010. I do not.

The Bloomberg Startup Barometer

A VC : Venture Capital and Technology

I came across this index from Bloomberg that tracks the health of the US startup ecosystem. VC & Technology

What Is Going To Happen In 2017

A VC : Venture Capital and Technology

Happy New Year Everyone. Yesterday we focused on the past , today we are going to focus on the future, specifically this year we are now in. Here’s what I expect to happen this year: Trump will hit the ground running, cutting corporate and personal taxes, and eliminating the preferential treatment of carried interest capital gains.

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What Did And Did Not Happen In 2016

A VC : Venture Capital and Technology

As has become my practice, I will end the year (today) looking back and start the year (tomorrow) looking forward. As a starting point for looking back on 2016, we can start with my What Is Going To Happen In 2016 post from Jan 1st 2016. I thought AR/VR and wearables would disappoint in 2016. They did. We re-learned an old lesson: PC v. ISO; VHS v.

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The End Of The Level Playing Field

A VC : Venture Capital and Technology

I am old enough to remember the gogo days of cable TV when entrepreneurs who wanted to launch a new cable channel would go, hat in hand and cap table in tow, to the big cable companies and beg to get distribution on their networks. When the Internet came along in the early 90s, we saw something completely different. There is no doubt about that.

What Happened In 2015

A VC : Venture Capital and Technology

Last year in my What Just Happened post, I said: the social media phase of the Internet ended. But it is not yet clear what that thing is.

Global Venture Capital Distribution

A VC : Venture Capital and Technology

Richard Florida published some stats on the distribution of global venture capital investment last week. London and Beijing crack the top ten.

The Dangers Of Being Too Early

A VC : Venture Capital and Technology

I have been reading Whiplash , a book I recommended here last week. It starts with the story of the Lumiere brothers , who are credited with the invention of “the moving picture.” ” As told in Whiplash, the Lumiere brothers started showing films to audiences in 1895 using their patented cinematograph.

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Understanding VCs

A VC : Venture Capital and Technology

I saw Joe Fernandez ‘ tweet a few days ago and thought “he is making an important point.” ” too many young entrepreneurs talk about vc’s like they’re heroes and their blog posts are scripture. — Joe Fernandez (@JoeFernandez) August 19, 2016. VCs are not heroes. We are just one part of the startup ecosystem.

Best Seed Pitch Ever

A VC : Venture Capital and Technology

I read yesterday evening that our portfolio company Twilio , which priced its IPO last night, is going to live code from the NYSE this morning. That brought a powerful flashback to the first time I met Jeff Lawson , founder and CEO of Twilio. It was 2008 in our old offices on the 14th floor of the building we still work in. VC & Technology

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Biggest Technology Change In The Next Five Years

A VC : Venture Capital and Technology

The Upfront Summit is happening here in LA over the next two days. ” Here are the answers in a short two minute video. VC & Technology

Selling

A VC : Venture Capital and Technology

I think selling is the hardest part of investing. Buying is, of course, critical to generating strong investment performance. Figuring out what to buy and when to buy it is what most people think of when they think of investing. But your returns will have as much to do with selling as buying. And buying is a fairly rational decision.

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Experiment and Scandal

A VC : Venture Capital and Technology

We are living in a time of great experiments. They are not happening in the lab. They are happening in the real world. And they are being financed by real people. We are witnessing the de-institutionalization of experimentation. We are returning to a time when anyone can be an inventor and innovator. I am not thinking of one thing. We talk it up.

The Second Smartphone Revolution

A VC : Venture Capital and Technology

Benedict Evans tweeted out this chart yesterday: We sometimes think of the shift to mobile as finished, or almost finished. It isn’t. pic.twitter.com/l5gaiMlaoU. Benedict Evans (@BenedictEvans) March 12, 2016. But the next 2.5bn people to adopt smartphones may turn out to be a different story. Benedict is right. I am not so clear on that.

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What Didn’t Happen

A VC : Venture Capital and Technology

Last year, I ended 2014 with What Just Happened and started 2015 with What Is Going To Happen. That did not happen. That most certainly did not happen.

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The Hard Raise

A VC : Venture Capital and Technology

In the summer of 2003, Brad Burnham and I set out to raise a $100mm early stage venture capital fund. We had both been successful VCs in other firms and we had a thesis that the second wave of the Internet was upon us and that large networks were going to get built in this phase. The term “web 2.0” And then a few others did. But we did.

The Emerging Architecture Of Internet Applications

A VC : Venture Capital and Technology

The bitcoin blockchain is not just going to change the way money works on the Internet (and off). It is the blockchain stack and it looks like this.

An AI First World

A VC : Venture Capital and Technology

Sundar Pichai said this last week on Alphabet’s earnings call: In the long run, I think we will evolve in computing from a mobile-first to an AI-first world. That statement got a lot of pickup and attention and deservedly so. What does an AI first world look like? It was easier to think about a mobile first world. That’s big.

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What Is Going To Happen In 2016

A VC : Venture Capital and Technology

It’s easier to predict the medium to long term future. We will be able to tell our cars to take us home after a late night of new year’s partying within a decade. I sat next to a life sciences investor at a dinner a couple months ago who told me cancer will be a curable disease within the next decade. That’s a bit trickier.

The Rich Get Richer

A VC : Venture Capital and Technology

The 2014 numbers for the VC category are out and it was a huge year, almost $50bn in total VC funding. year over year. The rich are getting richer.

The Dan Primack Interview

A VC : Venture Capital and Technology

Dan Primack and I did a fireside chat at the Upfront Summit this past week. It generated a few news stories that went a bit viral. It is about 25mins.

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In Defense Of Bubbles

A VC : Venture Capital and Technology

There is nothing the tech media and the broader press likes to ask me about more than bubbles. “Is Snapchat a bubble?” ” “Is Uber a bubble?” ” “Is Facebook a bubble?” ” “Is seed investing a bubble?” ” “Is growth investing a bubble?” ” And on and on and on.

Video Of The Week: Mary Meeker’s Internet Trends

A VC : Venture Capital and Technology

It was an easy and obvious call this weekend. You should too. mobile VC & Technology Web/Tech

Negative Gross Margins

A VC : Venture Capital and Technology

There’s been a lot of talk coming out of silicon valley lately about fast growing companies with high valuations that are going to face problems in the coming year(s). ” But how is this going to happen? The most likely scenario is the thing that has been driving growth (and valuations) for these companies ultimately comes home to roost.

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The No Hands Syndrome

A VC : Venture Capital and Technology

Zero hands. FortuneTech. — Dan Primack (@danprimack) July 14, 2015. I replied to it and I also mentioned it in a comment thread here at AVC recently.

The Carlota Perez Framework

A VC : Venture Capital and Technology

I was reading William’s post on the potential crash in the Bitcoin sector this morning and I thought of Carlota Perez. VC & Technology

Losing Money

A VC : Venture Capital and Technology

I remember back in the mid 90s, I used to say with some pride that I had not lost money on any of my VC investments. Then one day, someone told me “then you are not taking enough risk.” ” I ended that streak of not losing money on VC investments in the late 90s in a series of epic flameouts. I am not proud of those mistakes.

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Software Is The New Oil

A VC : Venture Capital and Technology

I was with some friends this weekend and one of them was talking about an investment committee meeting he attended and there was a discussion at that meeting about some of the threats out there in the macro investment landscape. One of them was “vanishing liquidity” and the significant change in net cash flows from the global oil sector.

Technology In Istanbul

A VC : Venture Capital and Technology

The Gotham Gal and I are winding up a four day weekend in Istanbul. I expect the posts on her blog will be all about Istanbul for the next few days.

Two Charts

A VC : Venture Capital and Technology

What is the capital markets environment for startup tech companies? Series B is getting overheated. Series C and beyond has gone crazy.

App Constellations

A VC : Venture Capital and Technology

I touched on the concept of App Constellations in my post on Friday about Swarm. So that got me thinking. It is also helpful for CRM and ad targeting.

Filling Out A Round: When It Matters, and When It Doesn’t

A VC : Venture Capital and Technology

Almost every financing I’ve been involved with over the years (seed, VC, growth, raising a VC fund) goes mostly like this: Struggle like hell to find a lead. Come to terms with the lead. Turn your attention to filling out the round. So how do you decide who to let into the round and who to say no to? Yes means try to let them in.

What’s Next In Computing

A VC : Venture Capital and Technology

Chris Dixon posted an excellent roadmap for thinking about what is next in computing. We are due for one soon. VC & Technology

Profits vs Growth

A VC : Venture Capital and Technology

One of the things I’ve always struggled with as an investor in high growth tech companies is the tension between getting profitable vs growing more quickly. This leads to behaviors like investing heavily in sales and marketing to increase the growth rates of a business beyond what it can grow at “organically.”. It doesn’t have to be that way.

A discussion about creating startup hubs

A VC : Venture Capital and Technology

Andrew Ross Sorkin and I talked about creating startup hubs yesterday at the New York Times’ Cities For Tomorrow conference.

The Blurring Of The Public And Private Markets

A VC : Venture Capital and Technology

Five or six years ago, as the USV team was discussing the evolution of late stage financings and secondaries on the venture landscape, our partner Albert described something to us that was, in hindsight, very prescient. His point was that the only thing that really matters is how much information a company is willing to disclose. Well guess what?

Ageism

A VC : Venture Capital and Technology

There has been a lot of chatter recently about ageism and the old vs young debate in tech. The New Republic has a post up today on the topic.

Loyalists vs Mercenaries

A VC : Venture Capital and Technology

One of the things that entrepreneurs, founders, and CEOs obsess over is holding onto their team. When I propose some sort of difficult decision to a CEO, I am often met with the response “the team will freak out and we will lose them.” ” And I understand where this emotion comes from. Neither can I to be honest. 2) Mission.

NYC’s FinTech Innovation Lab

A VC : Venture Capital and Technology

Applications are open for New York’s seventh annual FinTech Innovation Lab , a 12-week program that I have blogged about a bunch here on AVC. This proram is for early and growth stage companies that have developed cutting edge technology products targeted at financial services customers. For a complete list of focus areas , click here.

Second and Third Tier Markets And Beyond

A VC : Venture Capital and Technology

I am in Nashville for a couple days with The Gotham Gal who is giving a keynote at a startup conference today. I mostly came along for a chance to spend a couple days in Nashville. But I will also be at the conference later today to see her do her thing. The way I think about the startup sector in the US is that the first tier is Silicon Valley.