David Teten

SEPTEMBER 16, 2014

Angel investors are generally former entrepreneurs and/or executives, who invest in privately-held, early-stage companies. Angels relish the opportunity to invest in passionate and driven entrepreneurs with ambitious visions of the future – who doesn’t want to be part of the next wave of innovation? Average Angel Returns Over Time.

Angel Investor 114

Angel Investor Technical Review Venture Capital Pre-Money Valuation 114

David Teten

MAY 8, 2012

As Steve Case has said, it’s ridiculous that anyone can gamble and be guaranteed to lose money, but there are strict regulations around who can invest in early-stage private companies and earn (in some cases) a 27% IRR on their capital. *. The Entrepreneurs Access to Capital Act helps to redress this. Start now! *

Securities and Exchange Commission 148

Securities and Exchange Commission IRR Entrepreneur Angel Investor 148

Steve Blank

MARCH 31, 2014

I like the guy because he’s credited with coining the word entrepreneur. Unfortunately as we’ve learned from recent experience, using Return on Net Assets and IRR as proxies for efficiency and execution won’t save a company when their industry encounters creative disruption. I’m sure many of you have heard his name.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Startup Professionals Musings

FEBRUARY 5, 2018

As an active angel investor, I’m accustomed to hearing entrepreneurs pitch their expectation to quickly create a new dominant brand, based on their disruptive technology. Investors measure their success by looking at the internal rate of return (IRR). Only recently, I realized that times are rapidly changing.

IRR 143

IRR Marketing Startup Angel Investor 143

Tim Keane

JANUARY 12, 2010

Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react.   Internal Rates of Return naturally compound, so a 50% IRR is 7.59

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Gust

APRIL 30, 2014

Having now invested in over 85 startups, and finding that my personal metrics are very similar to aggregated industry ones, it is clear that (a) there is little to no correlation between my home runs and my personal favorites, and (b) angel investing done correctly really *can* produce a consistent IRR in the 25%-30% range.

Angel Investor 148

Angel Investor IRR Due Diligence Aggregator 148

Hippoland

NOVEMBER 13, 2016

When I was an entrepreneur, it never crossed my mind how VCs measure their success. So, as an entrepreneur, in many cases, you are pitching people who may not even be good investors. A common intermediary milestone for most investors is IRR (internal rate of return) of the fund. But I should have thought about it.

IRR 48

IRR Valuation Portfolio Due Diligence 48

Startup Professionals Musings

APRIL 3, 2012

Another rule of thumb is a target of 50% IRR (a discounted cashflow calculation). Successful serial entrepreneurs usually find it easier to raise money from venture capitalists. If you're a first-time entrepreneur, that doesn't mean you can't raise VC money, but you're going to find it more difficult getting VC traction.

IRR 248

IRR Term Sheet Startup Valuation 248

Up and Running

JUNE 17, 2013

As the session got into open-ended questions, I was surprised, and even shocked, by a frustration shared by several of the entrepreneurs. And Internal Rate of Return (IRR)? If you’re the one telling entrepreneurs they need to show some fantastic return on investment, stop it. I trust my judgment on that.

IRR 71

IRR Flash Angel Investor Venture Capital 71

Both Sides of the Table

MAY 19, 2018

Or if you’re a VC raising from LPs you have to list all of your deals, your investment value, your carrying value, your multiples, your IRRs, TVPIs, DPIs, etc along with net cashflows plus your previous LPAs. Most entrepreneurs (and VCs raising from LPs) think this means progress. Entrepreneur : “Sure. It doesn’t. No problem.

Cap Table 336

Cap Table Due Diligence Forecast Churn Rate 336

Berkonomics

JANUARY 6, 2022

First, the marginal exit event: Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. That further reduces the amount available to founders if not still in the ranks of management. Here comes the headline: So, this advice is directed to those investors.

Dividend 62

Dividend IRR Preferred Stock Participating Preferred 62

Both Sides of the Table

OCTOBER 17, 2019

The advantage is that in many of our best deals we now have $50+ million invested so we can really support entrepreneurs as their businesses scale. At Upfront when we know we have a winning hand we prefer to put more capital to work, which both helps the entrepreneurs succeed and drives more aggregate financial returns for our LPs.

IP 223

IP Intellectual Property IRR Cofounder 223

Startup Professionals Musings

NOVEMBER 11, 2010

Another rule of thumb is a target of 50% IRR (a discounted cashflow calculation). Successful serial entrepreneurs usually find it easier to raise money from venture capitalists. If you're a first-time entrepreneur, that doesn't mean you can't raise VC money, but you're going to find it more difficult getting VC traction.

IRR 225

IRR Startup Term Sheet Angel Investor 225

Hunter Walker

NOVEMBER 13, 2018

You’re basically along for the ride with an investor who has very different incentives than you do – a different time frame, the AUM business vs IRR business, and requiring a scale in outcome that’s just astronomical. *This* is a more complicated situation for seed investors. What do I think is happening in #2?

Cap Table 95

Cap Table IRR IPO Early Stage 95

Growthink Blog

MARCH 29, 2010

If you don't know how, or need inspiration, read Entrepreneur, Inc. Supporting good non-profits is great, but even better is to support entrepreneurs while making excellent money doing so. Startup investing has outperformed every major investing class, with IRRs of over 27.3% (click here to learn more). This list, too.

IRR 59

IRR Entrepreneur Washington Government 59

Both Sides of the Table

MAY 25, 2013

After all, I am no stranger to the publicly expressing the frustrations of dealing with the downside of this industry as I wrote about in 2006 when I was an entrepreneur. The better way to think about VC returns is, do the firms consistently beat alternative asset clases on an IRR basis to adjust for the increased risk and lack of liquidity?

LP 374

LP Later Stage IRR Term Sheet 374

David Teten

APRIL 8, 2013

Based on a range of sources, we believe that most funds with well-developed Portfolio Operator models have top-quartile returns (typically above 20% IRR in the relevant time periods). Our thesis that greater investor participation correlates with higher returns is consistent with two other formal studies.

Private Equity 114

Private Equity Hungary IRR Venture Capital 114

The Equity Kicker

MAY 27, 2015

In fact, our strategy is to have higher expenses in order to attract the best entrepreneurs and help their companies achieve better results. The definitive answer to these questions will come over time as our portfolio matures, our companies exit, and we can demonstrate a high cash to cash IRR.

Cost 60

Cost IRR Private Equity Salary 60

Growthink Blog

JUNE 3, 2014

Over the last three weeks, we have discussed the various factors that drive the 25% IRR return potential of the startup and emerging company investing class. And more to the point, the great entrepreneurs, the builders of businesses, those that actually create wealth… …have always percolated at the edges and NOT in financial centers.

Omaha 91

Omaha Accredited Investor IRR Silicon Valley 91

Eric Friedman

MARCH 15, 2017

I mentioned that this attribute is now towards the top of my list in what I look for in entrepreneurs in my lessons learned for Expa Labs 2016 and I wanted to elaborate more on why. Let’s get the fun part out of the way: the word coachability auto corrects to “coach ability” or “coach-ability” but I like it combined so I am running with it.

IRR 60

IRR Early Stage Leadership Programming 60

This is going to be BIG.

DECEMBER 28, 2013

If you are a venture capital investor and you''re not preparing yourself to succeed in a more diverse ecosystem of entrepreneurs, you''re just going to get left behind. My total valuation multiple across that span is nearly 4x and the return rate is up over 110% IRR. YC''s best investing days may be behind it. That''s 25%.

Venture Capital 152

Venture Capital Cofounder IRR Dilution 152

Startup Professionals Musings

JUNE 13, 2020

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds.

Angel Investor 314

Angel Investor Entrepreneur IRR Valuation 314

Feld Thoughts

JULY 31, 2013

As Boulder continues to gain visibility as a great place to create companies, I’ve decided to highlight some of the entrepreneurs – and their companies – who have contributed to Boulder in significant ways. Our equity IRR has averaged around 50% since inception. “How can Brad help? We raised $2.7B

Bandwidth 147

Bandwidth Colorado Startup IRR 147

David Teten

AUGUST 21, 2019

These entrepreneurs want to maintain two major options: 1) To raise VC later (or not), and/or. So you’re stuck selling mid-term, which is frequently sub-optimal for the entrepreneur. “. BK Landland observed, “At Lighter, most entrepreneurs we fund spend 10 total hours of work over 3-6 weeks to get funding. Optionality.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Professor VC

MARCH 10, 2009

His latest venture, Bharosa, was sold to Oracle for a 6X multiple in 3 years to his angel investors, a sweet close to triple digit IRR. In this economy, all entrepreneurs are going to hear a lot of "nos", but time spent going after customers rather than investors should provide a higher return on investment.

Bootstrapping 28

Bootstrapping San Jose Silicon Valley Software Review 28

Berkonomics

OCTOBER 1, 2015

Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. That further reduces the amount available to founders if not still in the ranks of management. So this advice is directed to the investors. Don’t be greedy even if you can.

Dividend 48

Dividend Preferred Stock IRR Participating Preferred 48

Steve Blank

AUGUST 5, 2014

Larry was the best entrepreneur I’ve ever known, and completely unconventional…. I was on the way to my lifetime IRR of 90%. I loved what he was working on (thanks to perspective in data management from my large company experience here—that prepared mind thing). And it was an amazing time. What can you learn from this story so far?:

Venture Capital 333

Venture Capital Silicon Valley Chicago Cofounder 333

ithacaVC

FEBRUARY 13, 2013

And on the 8th day God looked down on his planned paradise and said, “I need a caretaker for all those entrepreneurs – the crazy ones!” And then go to a demo-day and stay past midnight listening to more pitches, empathizing with entrepreneurs about how hard it is to start a company. Gospel for the VC ages. By Mahendra Ramsinghani.

Liquidation Preference 55

Liquidation Preference IRR Due Diligence LP 55

Feld Thoughts

APRIL 21, 2016

Entrepreneurs and CEOs should make the hard call today and take the poison and move on. Why is this so hard for us a humans, entrepreneurs, investors, and everyone else involved? .” Fred and I have had some version of this conversation many times over the past twenty years as we both strongly believe the punch line.

Marketing 70

Marketing Down Round Startup IRR 70

Startup Professionals Musings

MARCH 12, 2023

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds.

Angel Investor 246

Angel Investor IRR Venture Capital Valuation 246

Up and Running

MARCH 6, 2019

The image here is of the Rice Business Plan Competition, entrepreneurs pitching at the finals. But don’t quote me a damned IRR. Some entrepreneurs take a pitch presentation as if it were some kind of verbal final exam, in which they have to know all the answers. That’s me in the front row, second from the aisle, on the left.

Net Present Value 87

Net Present Value Forecast IRR Oregon 87

Professor VC

JANUARY 17, 2008

I think the title of this post is a TV show, but fitting as there has been much debate in the venture community as to the whether angel investors are good or bad for entrepreneurs and VCs. One group charges entrepreneurs "an administrative fee" to present to the group. Touched by an Angel. return on investment after 3.5

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

crowdSPRING Blog

AUGUST 7, 2011

In addition, as long as investors can earn higher returns on T-notes, they will expect higher returns from alternative investments in equities and VC’s may follow suit for similar reasons and expect a higher IRR from their invest,ends in new ventures. Uncertainty may abate.

Small Business 86

Small Business IRR Government United States 86

Up and Running

DECEMBER 22, 2015

My personal favorite in the “pure nonsense category” is the IRR, the Internal Rate of Return , something that was interesting for about one hour as part of the MBA curriculum, but which has no relevance in the real world. Read more of my articles related to this topic: You Can Take That IRR and Shove It.

Angel Investor 60

Angel Investor IRR Software Review Startup 60

Startup Professionals Musings

AUGUST 2, 2014

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited Angel investors. Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds.

Angel Investor 266

Angel Investor Entrepreneur Venture Capital IRR 266

Up and Running

AUGUST 19, 2014

Many angels are entrepreneurs themselves, or executives and business or community leaders. Since no two angels are alike, I thought it would be fun to include tips from a sampling of angel investors from around the United States about what impresses them—and in some cases turns them off—when meeting with entrepreneurs. Tweet This Tip.

Angel Investor 161

Angel Investor Technical Review Due Diligence Startup 161

K9 Ventures

MAY 14, 2011

This is probably the very first group that an entrepreneur who is starting out may approach for some funding for his or her idea. As fiduciaries, the general partners of the uVC funds have to begin to focus on the dreaded VC I-word : IRR. Friends and Family : Or sometimes referred to as the 3Fs for Friends, Family and Fools.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125