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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. SF proper and the broader bay area make up 25% of the global venture capital investment activity (~$10bn out of $42bn).

Entrepreneurial Density and Venture Capital

Feld Thoughts

Two of his latest articles talk about entrepreneurial density and venture capital. The Connection Between Venture Capital and Diverse, Dense Communities. In it, he looked at Venture Capital financing (total dollars and number of deals) on a per-capital basis. And Richard acknowledges this: “I’ll continue to track the evolving geography of start-ups and venture capital in future posts.

Why Was Winter in Venture Capital Funding so Short?

Both Sides of the Table

It was only a year ago that many in the Venture Capital industry were predicting that “winter was coming” and to be fair the author of this post was chief amongst them. While this it total FDI as opposed to just venture, it should give you an indication of the international trend.

What Do LPs Think of the Venture Capital Markets for 2016?

Both Sides of the Table

At the Upfront Summit in early February, we had a chance to have many off-the-record conversations with Limited Partners (LPs) who fund Venture Capital (VC) funds about their views of the market. LPs Still Believe Strongly in Venture Capital as a Diverse Source of Returns.

Why The SBIC Doesn’t Work For Venture Capital Anymore

Feld Thoughts

And, in the other two, I don’t expect to ever see any of my capital back because of the SBIC leverage. The SBIC was instrumental in the creation of the venture capital business. If you want to see a fun quote on it, read A History of Silicon Valley which quotes: “ …many venture capital pioneers think the SBIC program did little to advance the art and practice of venture investing. Peter Adams, head of Rockies Venture Club, is quoted a few times.

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Understanding Changes in the Software & Venture Capital Industries

Both Sides of the Table

In this three-part series I will explore the ways that the Venture Capital industry has changed over the past 5 years that I would argue are a direct result of changes in the software industry, not the other way around.

Venture Capital and "Innovation"

Information Arbitrage

Many have recently been critical of the role of the venture industry in financing “true innovation.” This is not how the venture industry is supposed to operate.” When it comes to breakthroughs in long time-scale, massively capital intensive areas in the hard-sciences, e.g., battery technology and solar technology writ large, I’d posit that the right source of financing for this kind of innovation is either the Government or large corporations.

Harvard's Go-To Venture Capital Firm

Fresh Inc.: The Staff Blog

The Experiment Fund, NEA's seed-stage venture capital firm, set up shop on Harvard's campus to catch young, entrepreneurial talent early. So out of NEA he spun out the Experiment Fund, a seed-stage venture capital firm, and set up shop on Harvard's campus.

Six Reasons Not to Invest in a Venture Capital Fund

This is going to be BIG.

You could wind up getting distribution checks from a fund you invested in a dozen years ago. Hopefully, the fund gets some nice wins early and you start to get your money back, but when you're in a venture fund, you're in for a really long haul. I recently met up with an investor who I'm not totally sure is a fit for my second fund , so it was important to me that I was upfront about all the reasons why he shouldn't come in.

Why being a VC sucks. Advice to anyone who wants to get into venture capital.

This is going to be BIG.

I probably get around a dozen e-mails a week asking me how to get into venture capital. On top of that, anytime I talk to anyone who wants to get involved in startups but isn''t sure what they want to do, inevitably, I hear, "And then I was thinking maybe I should look into venture capital, too.". I''ve never really debated people on why they want to get into venture in the first place, even though a lot of people have misconceptions of it.

The Venture Capital Secret: 3 Out of 4 Start-Ups Fail

online.wsj.com

To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit www.djreprints.com. SIGNIFICANCE PROMINENT. --> The Venture Capital Secret: 3 Out of 4 Start-Ups Fail. An entrepreneur with a hot technology and venture-capital funding becomes a billionaire in his 20s. About three-quarters of venture-backed firms in the U.S. backed by venture capitalists.

Changes in Software & Venture Capital – Part 2 of 3

Both Sides of the Table

Yesterday I wrote Part 1 of the series on the changes to the software industry over the past decade that has led to changes in the venture capital industry itself. Or at least venture-style returns. Not to mention providing the capital for growth.

Probability Distributions and the Brute Force Approach

Rob Go

I’ve been thinking a lot about the outcome distributions in different circumstances. In venture capital, the cost of attempting something is meaningful, but not that high. For most funds, an initial investment into a company is something like 1 – 3% of total capital (for example, a $300M venture fund may make a $5M first investment into a company, representing 1.6% of total capital).

New Game for Corporate R&D and Venture Capital

Recent Buzzes - VC Experts, Inc.

This outdated R&D model of the industrial organization that progresses through internal development has been eclipsed by the reality of new, venture capital backed start-ups that achieve far greater competitive advantage through rapid cycles of innovation, customer acceptance and global distribution It would appear that US innovation has never been brighter. US Corporations are spending in excess of $200 billion on R&D annually, most of it on technology advancements.

Venture Capital Term Sheets: Conversion Rights

Scott Edward Walker

Introduction This post originally appeared as part of the “ Ask the Attorney ” column I am writing for VentureBeat ; it is another installment of my ongoing series regarding venture capital term sheets. The investor would thus be entitled to the first $10 million pursuant to its liquidation preference, and the remaining $90 million would be distributed ratably to the common stockholders.

Some Rules for Marketplaces and Distributed Workforce Platforms

This is going to be BIG.

My two most recent deals involve a distribution of labor or direct sales, and two of my upcoming deals are similarly structured. Venture Capital & Technology I''ve been getting involved with a couple of different models related to labor marketplaces and platforms lately. My interest dates back to my 2010 investment in chloe + isabel back when I was with First Round. I was still at FRC when we invested in TaskRabbit and Uber, even though I wasn''t on those deals.

Why VCs Should Recycle Their Management Fees

Feld Thoughts

Understanding what “recycling management fees” means is a fundamental part of understanding the economics of a venture firm. The advantage, for all the investors (the VCs and their LPs), is that $100m gets put to work as invested capital, rather than just $85m.

Girls Who Code

A VC : Venture Capital and Technology

So effectively the distributiion of students admitted is going to be very similar to the distribution of students who apply and make the school their first choice. hacking education Venture Capital and Technology

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The Humanity of Our AI Future

thebarefootvc

As a VC who has built a fund focused on distributed connectivity and data analytics as a thesis, I am realistic about the current status of investment opportunities in the sector. In 1991, as an undergrad, I wrote a paper on social cybernetics and its role in robotics.

Watching Larry Ellison become Larry Ellison — The DNA of a Winner

Steve Blank

Larry had the DNA I’ve seen common with all the successful entrepreneurs I’ve backed in my 25 years of Venture Capital work—only he had a more exaggerated case than most. Being distributed/network ready (even though Ethernet was just barely coming into use in the enterprise).

What Has Changed

A VC : Venture Capital and Technology

distribution is much harder on mobile than web and we see a lot of mobile first startups getting stuck in the transition from successful product to large user base. there is a large pool of money in the venture capital asset class that is opportunistic, momentum driven, and thesis agnostic. this pool of capital was "all in" on consumer web/social web in the 2009-2011 time frame. That is a tiny fraction of the venture capital market.

The State of Cleantech Venture Capital, Part 1: The Money

Secret Formula

I’ve heard it said more than once in the past month that venture-backed entrepreneurship clearly isn’t working here, so maybe we should all pack our bags and go home. We can answer this question by using yesterday’s financing data to project tomorrow’s capital requirements.

How to get a job in venture capital (revisited) | Seth Levine

Seth Levine's VC Adventure

RunTitle Lands $4 Million in Venture Capital

SiliconHills

RunTitle, an online title search marketplace geared to the oil and gas industry, has landed $4 million in Series A venture capital led by Austin Ventures.

Rethinking Mobile First

A VC : Venture Capital and Technology

I talked about that in my what has changed post : distribution is much harder on mobile than web and we see a lot of mobile first startups getting stuck in the transition from successful product to large user base. mobile Venture Capital and Technology Web/TechI wrote the Mobile First Web Second blog post a few years ago. In that post, I talked about apps that were designed to be used on mobile primarily with the web as a companion.

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OccupyAppStore

A VC : Venture Capital and Technology

The app stores aren't working for us as a distribution channel." Venture Capital and Technology Web/TechIt was tne Nth time I've had this conversation in a board meeting, "We can't figure out how to get on the leaderboards. " To which I replied "All the app stores use a leaderboard model which makes the rich richer and everyone else poorer. We are in the 99%, wishing we were in the 1%.

Top 100 venture VC investments each year average $100-150m gain

The Equity Kicker

Cambridge Associates is a service provider to the Limited Partners that invest in venture capital funds that’s known for the quality of its research. That’s why smaller funds and angels have a preference for capital efficient companies. Uncategorized Venture Capital

Protecting The Safe Harbors Of The DMCA And Protecting Jobs

A VC : Venture Capital and Technology

It has developed both protectitive technologies like DRM and alternative distribution services like premium streaming audio and video services such as Netflix, Spotify, and many others. These protective technologies and alternative distribution services have significantly cut the amount of online piracy in the past decade. Politics Venture Capital and TechnologyMy partner Brad and I spent Thursday in DC along with a bunch of entrepreneurs and VCs.

The Role Venture Capital is Playing in Online Schooling (Guest Post)

VC Cafe

Venture capital and other forms of seed funding have been crucial for the development of the best online colleges. A Wall Street Journal piece from April 2012 reports on the impact of $16 million in venture capital awarded to Coursera to increase the scope of the program.

2012: The Year That Movements Go Mainstream?

A VC : Venture Capital and Technology

The idea of a distributed social net that is not controlled by any company or institution has been around for a while. Politics Venture Capital and Technology WeblogsI returned from ten days of skiing with my family last night. I'm on mountain time and plan to stay there until the new year. Staying up late and sleeping late seems to be a good way to bring in the New Year. But even so, my version of sleeping late is getting up at 8am.

Why I'm Rooting For Google+

A VC : Venture Capital and Technology

They give you instant distribution, instant users, instant social identity. Venture Capital and Technology Web/TechThe day Google+ launched, I sent a friend at Google who was involved in building the service an email requesting an invite. I got the invite late that day and started playing with the service. Here's my profile. I'm not sure if this page is public or you need a Google+ login to see it.

What We Are Seeing

A VC : Venture Capital and Technology

The capital markets are finite at some level. The conventional wisdom is that 10-20% of venture funds produce 100% of the returns in the asset class. Given the massive amount of angel capital that has come into the market in the past few years, I wonder if we are seeing some cooling of that market as all the new investors take stock of where they are and where they want to go next. Venture Capital and Technology

Investing In The Cultural Revolution

A VC : Venture Capital and Technology

It is a highly distributed global network that has at its core the concepts of free speech and individual liberty. Venture Capital and TechnologyIn a talk with Erick Schonfeld at Disrupt a couple weeks ago , we talked about what is coming next for the Internet.

Early-stage Regional Venture Funds–part 2 of 3 of Bigger in Bend

Steve Blank

Part 2: Early-stage Regional Venture Funds. as a distribution channel have vastly reduced the amount of capital a startup needs at the early stage when the risk is greatest. What’s Missing Is Early Stage Capital. Regions are missing early-stage capital.

Powerball: The Difference Between Gambling and Investing

Non-Linear Growth

I encouraged them to not only think about the NPV of the investment but also to look at the distribution of returns. Distribution of Returns Matters Forget about whether or not the NPV is positive. With the return distribution so skewed -producing a staggering return for the winner and a loss for everyone else – Powerball may be a fun bet but it is a really, really bad investment. The distribution of returns is worth considering independent of the NPV of an investment.

NPV 22

The Three Ps of Venture Funding

StartupCFO

In the context of funding a startup, investors are looking for any of the following: Complete skill sets: design, development and distribution. While sometimes the lesser product wins out to better distribution, you won’t get venture funding unless you’ve built a better mousetrap.

Venture Outcomes are Even More Skewed Than You Think

Seth Levine's VC Adventure

The typical “successful” venture portfolio is often described as having the following outcome: 1/3 of companies fail. 1/3 of companies return capital (or make a small amount of money). Based on their data, a full 65% of financings fail to return 1x capital.

Does Open Conflict With Making Money?

A VC : Venture Capital and Technology

We had a good chat hanging around Zander 's desk yesterday about this line from Matthew Ingram's post on his love/hate relationship with Twitter : Lastly, I hate that Twitter’s metamorphosis seems to reinforce the idea that being an open network — one that allows the easy distribution of content across different platforms, the way that blogging and email networks do – isn’t possible, or at least can’t become a worthwhile business. Venture Capital and Technology

On the Road to Recap:

abovethecrowd.com

In February of last year, Fortune magazine writers Erin Griffith and Dan Primack declared 2015 “ The Age of the Unicorns ” noting — “Fortune counts more than 80 startups that have been valued at $1 billion or more by venture capitalists.” All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. Competition also has access to capital.

Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. I told them that True Ventures had stuck to their brand name and submitted a totally clean term sheet.