Hunter Walker

JULY 18, 2021

All in all it worked out fine, driven primary by some fortunate acquisitions to companies like Microsoft, Pinterest and Facebook, the latter two in pre-IPO equity which grew substantially prior to their public listings. I never really tracked IRR or net returns, but I did pay close attention to ‘lessons learned.’

Cap Table 140

Cap Table IRR Angel Investor IPO 140

Berkonomics

JANUARY 6, 2022

Promissory notes come before any equity, and most late equity investments come before early equity investments, even of the same class of security. Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation.

Dividend 62

Dividend IRR Preferred Stock Participating Preferred 62

Hippoland

NOVEMBER 13, 2016

Primarily these things: Companies dissolvingCompanies exitingCompanies raising equity rounds All of these events are concrete events that attach a numerical value to a company. Equity rounds of $10m pre. But at a VC firm, we would mark up the companies in portfolio #1, because they have all raised equity rounds at $10m pre.

IRR 48

IRR Valuation Portfolio Due Diligence 48

David Teten

APRIL 8, 2013

My coauthors and I just published in the Journal of Private Equity the first-ever research study on best practices of venture capitalists in creating portfolio company value through operational support, exploring exactly these questions. Some $246b of private equity was invested globally in 2011, vs. VC at around $20b a year.

Private Equity 114

Private Equity Hungary IRR Venture Capital 114

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. These collective sets of documents form the basis of what somebody looking at investing would call “financial due diligence.”

Cap Table 336

Cap Table Due Diligence Forecast Churn Rate 336

David Teten

JANUARY 28, 2013

The good news for Techcrunch readers: Every major study conducted to date has placed angel investors’ IRR between 18 and 38 percent, as summarized by my Partner John Frankel and Professor Robert Wiltbank in prior Techcrunch articles. Every major angel study conducted to date has shown high IRR.

IRR 114

IRR Angel Investor Angel Groups Cofounder 114

Tim Keane

JANUARY 12, 2010

The investors and the entrepreneurs are – or should be – aware that the price of the company’s equity is set by the market – in simplest terms, what an informed buyer is willing to pay.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Both Sides of the Table

OCTOBER 17, 2019

An example was that while we were in the seed round at Ring and followed in the A, B, C and D … we were also able to lean into the E round when Jamie really wanted to scale up his funding and the final check was still > 420% IRR!

IP 223

IP Intellectual Property IRR Cofounder 223

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. *. Currently, these Crowdfunding sites don’t give donors any equity in the companies. Start now! *

Securities and Exchange Commission 148

Securities and Exchange Commission IRR Entrepreneur Angel Investor 148

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? But should they? Optionality.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

The Equity Kicker

MAY 27, 2015

This applies to all classes of fund managers, including pension fund managers, IFAs, private equity fund managers, and venture capital fund managers. 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

This is going to be BIG.

JULY 30, 2015

If you could return investors nearly triple their money and mid 20's returns consistently, compared to the 8% long term return in the public equities market, they'd more than accept that. Comparatively, if you look at long term private equity results, I think most investors are winding up with high teens returns. No surprises there.

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

David Teten

NOVEMBER 17, 2011

It is particularly valuable for founders because it allows them (and their employees) to assess equity compensation in the form of options paid out to founding team members and other key employees. By definition, IRR is calculated using amount invested, amount received at some point in the future, and time passed between the two cash flows.

Employee 155

Employee IRR Startup Mexico 155

Feld Thoughts

JULY 31, 2013

By the time we sold to Level 3, our total proceeds to equity owners and management were $225M. of debt and $870M in equity in three rounds. Our equity IRR has averaged around 50% since inception. Two years prior, ICG was a public company preparing for its second bankruptcy. We paid them $8.7M and took them private.

Bandwidth 147

Bandwidth Colorado Startup IRR 147

Growthink Blog

MAY 21, 2014

One reader reference Gust Founder David Rose’s new book - “ Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups ” and to Rose’s main contention that to access the 25% IRR potential of the asset class one must hold positions in not less than 20 companies. He asked, “ Is this practical advice?

San Diego 72

San Diego Warrant IRR Investment Bankers 72

Berkonomics

OCTOBER 1, 2015

Promissory notes come before any equity, and most late equity investments come before early equity investments, even of the same class of security. Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation.

Dividend 48

Dividend Preferred Stock IRR Participating Preferred 48

The Equity Kicker

OCTOBER 25, 2012

This LP is one of the more successful ones, they have positions in many of the top funds and have achieved a very comendable IRR from their investments in venture funds (well north of 20%, which is great as an average). So think of the following as the profile of a successful fund rather than an average fund.

LP 150

LP IRR Venture Capital Naming 150

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. They have a standard presentation on bootstrapping, which they present around the country. Kennet has a white paper on that summarizes why bootstrapped businesses are the best.

Bootstrapping 28

Bootstrapping San Jose Silicon Valley Software Review 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

K9 Ventures

MAY 14, 2011

The incubators invest usually for an equity stake and buy equity at a extremely low valuation (for example, 7% for $15,000, which implies a pre-money valuation of less than $200,000). As fiduciaries, the general partners of the uVC funds have to begin to focus on the dreaded VC I-word : IRR.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

David Teten

MARCH 2, 2013

The Economics of Private Equity Funds demonstrates that the VC industry survives mostly on fee-based income (of which larger funds have a proportionally larger amount). Beyond the fact that LP capital commitments don’t prove anything about returns, however, large funds are likely much more resilient to a few bad years than small funds are.

LP 114

LP Securities and Exchange Commission Silicon Valley Venture Capital 114

Up and Running

AUGUST 19, 2014

An angel investor is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. Wikipedia defines an angel investor as “an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.”.

Angel Investor 161

Angel Investor Technical Review Due Diligence Startup 161

Professor VC

JANUARY 17, 2008

If my math is correct, this is approximately a 31% IRR, which has to beat individual angel investments on aggregate and venture capital returns over the period of the study (1990-2007). There needs to be enough equity to go around for founders, early investors, later investors, and employees. return on investment after 3.5

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Agile VC

NOVEMBER 13, 2012

3) Sometimes The Promise of Success Turns Into Actual Success – Setting aside very late-stage VC or growth equity type investors, successful VCs always raise new funds on the promise of success rather than actual (realized) returns of the most recent fund. typically, which in most cases would to >20% IRR.

LP 154

LP Portfolio Venture Capital IRR 154

VC Cafe

JULY 2, 2012

Lots of returns are being made these days, but the latest CalPers report shows dissapointing returns by Israeli VC firms , with an IRR of 3.5%-3.8% Britain’s Apax Partners in cooperation with Baltimore, Maryland’s JMI Equity has purchased the US-Israeli software company Paradigm for $1 billion. FACEBOOK BUYS FACE.COM FOR $100M.

Latvia 109

Latvia Lithuania Russia 109

abovethecrowd.com

APRIL 20, 2016

I get that you want to grow and I want you to grow, but let’s internally finance that growth by spending gross margin dollars rather than new dilutive dollars of equity. Do you feel the need to raise more capital quickly before the prices erode further and bring down your IRR? ” Go public. LIMITED PARTNERS (LPS).

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

David Teten

NOVEMBER 23, 2020

In an article you wrote for Techcrunch in 2019 about Revenue Based Investing you mentioned that “ traditional equity VC is biased structurally against some women and underrepresented founders”. Traditional equity VCs are looking for high-risk, high-reward, “swing for the fences” models. Why is that? Firm revenues.

Venture Capital 60

Venture Capital Partner Technical Review Cofounder 60