David Teten

MARCH 14, 2018

Managers of VC funds typically want to grow their business aggressively, just like the founders we back. This is a model used in at least one case by China’s third-largest private equity firm, China Science & Merchants Investment Management Group ($12 billion+ AUM), which funded in 2015 CSC Upshot, a $400m seed fund through AngelList.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

Both Sides of the Table

OCTOBER 12, 2014

In the old days there weren’t many fights about whether angels would take their prorata rights in financing rounds. But with the massive growth of seed funds being raised and the huge value increase of prorata rights many more LPs have stepped in to take their VC (industry term is GP) position. Thus begins the dance.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

SEPTEMBER 22, 2012

Instant growth = huge valuation from follow-on investors = big VC mark-up on our quarterly reports = LP interest. It encourages a bit too much FOMO (fear of missing out) and over-valuation in companies and a desire to do huge financing rounds to be perceived as the “knock-out winner.” Grow or die.

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

David Teten

JANUARY 19, 2021

As two fund managers employing Flexible VC, we think it is a healthy addition to the ecosystem and will yield more predictable and stable healthy returns for investors. Too often, investment structures force the management team to make decisions between misaligned growth and investment (return) objectives. Early liquidity.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Austin Startup

AUGUST 10, 2017

Although we were studying finance, we were always more interested in tech. Before graduating, I decided to forgo the finance path and instead dove into engineering and later sales and product management roles at VersaSuite (health IT) in Austin. But we never lost the finance bug. We were infatuated with tech.

Technical Review 48

Technical Review Cofounder Technical Cofounder Austin 48

Both Sides of the Table

FEBRUARY 25, 2019

Here are some observations I have from this exposure: If a company moves from strength-to-strength with predictable outcomes, easy financings, low staff turn-over, limited competitive threats then the composition of the board probably doesn’t matter as much. As an investor board member I see this as my immediate goal, too.

LP 269

LP Startup Burn Rate Stock Options 269

Babbling VC

OCTOBER 3, 2011

For those of you not in the know, they are one of the largest limited partners ( LP's : investors in venture capital funds) in Europe and are basically in almost all the funds throughout the market. Hypothesis 3: Insufficient diversification in European VC managers’ portfolios . This for me is a no-brainer.

LP 82

LP Europe Germany Venture Capital 82

Hunter Walker

AUGUST 8, 2023

Obvious caveats to my POV here, most specifically: exposure is limited to largely the US/SiliconValley ecosystem, driven by our own portfolio, my friends and co-investors, the funds I’m a LP in, and our institutional LP relationships. Fund Sizes Got Too Big. Firms raised too much money.

Portfolio 99

Portfolio Cap Table LP Valuation 99

Both Sides of the Table

FEBRUARY 6, 2017

WINTER For starters when we conducted our annual VC & LP survey in December of 2016 to prepare our annual Upfront State of the VC Industry report we found that twice as many VCs cut their investments in 2016 relative to 2015 with > 30% of VCs having cut investments. Unless of course something Trump’s our good weather.

Venture Capital 150

Venture Capital Saudi Arabia Kuwait Burn Rate 150

VC Adventure

MAY 5, 2022

In markets like this, funds that deploy quickly generate markups on their full portfolio; those that show more patience suffer from an IRR perspective as a larger portion of their fund is yet to be marked up by subsequent financing rounds. Traditionally LPs have viewed this as positive. management fee). Recycling hurts IRR.

IRR 116

IRR Metrics Valuation LP 116

View from Seed

DECEMBER 11, 2019

Yes, there are intermittent points of feedback along the way, like valuation marks from subsequent rounds of financing. There are Managing Directors, Senior Partners, and various other levels & shades of the Partner title. The median average investment time period to liquidity for a venture investment is currently 6.5-7.5

Venture Capital 204

Venture Capital Cap Table Partner LP 204

This is going to be BIG.

SEPTEMBER 19, 2012

Two Sigma is a technology and finance company in Soho filled with incredibly bright engineers and developers, so I’m really excited about leveraging that partnership in a number of cool ways. I'm ecstatic to announce that Brooklyn Bridge Ventures has just completed a first close of $3.5

LP 112

LP New York City New York Chad 112

Hunter Walker

AUGUST 24, 2014

It’s for reasons like these that I support getting startup founders some liquidity during their company’s first few years, perhaps as early as Series A financing when appropriate. Or put startup expenses on their credit cards, far beyond their savings, hoping they can close financing for the company by end of the month.

Founder 109

Founder San Francisco Liquidity Event LP 109

The Equity Kicker

JULY 8, 2019

This is what brings us to the second big difference: the cost of Applied Venture is too large to finance from a standard VC management fee. . Over the last twenty years both of these features of the startup financing world have changed dramatically flipping the balance of power from investor to entrepreneur. . Business model.

Portfolio 84

Portfolio LP Venture Capital Partner 84

David Teten

DECEMBER 3, 2019

However, in private markets, there is more room to optimize across all 11 steps of the investing process: firm management , marketing, fundraising , origination , manage relationships, due diligence, negotiation, monitoring, portfolio acceleration , reporting, and. 1) Manage the firm . This is harder than it sounds.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Both Sides of the Table

MAY 23, 2012

Yes, it’s true that FOMO (fear of missing out) is driving some irrational behavior and valuations amongst uber competitive deals and well-financed VCs. Thomson Reuters data shows that around $10 billion of LP money went into VCs per year pre bubble. By 2000 the total LP commitments had mushroomed to more than $100 billion.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

Haystack

APRIL 27, 2018

The LPs often (subconsciously) conduct their own version of the same analysis, and even I played along, trying to judge my progress by keeping track of graduation rates, the frequency with which certain firms followed, and so on. Historically, startups have by default relied on venture capital as financing source.

Naming 60

Naming Venture Capital Seed Stage Cap Table 60

David Teten

AUGUST 21, 2019

Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. A company with that mindset is dramatically less risky, because it’s not dependent on the financing markets for continued viability. Requires regular monthly payments and careful cash management.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Professor VC

NOVEMBER 19, 2009

I attended the annual LP meeting for a venture capital firm this week and got into a discussion about the above question. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. I also teach Entrepreneurial Finance at San Jose State.

San Jose 43

San Jose Silicon Valley Las Vegas Venture Capital 43

David Teten

JANUARY 21, 2021

VI: Revenue-based financing: The next step for private equity and early-stage investment. This is a summary of: Revenue-Based financing: State of the Industry 2020. Versatile is an aggressive user of technology internally to manage the firm and make better investments. . IV: Should your new VC fund use Revenue-Based Investing?

Equity 78

Equity Revenue Cofounder Colorado 78

Austin Startup

JULY 23, 2010

The company creates the leading software in an enterprise niche called pricing optimization and margin management. The company announced that is just completed $13M in financing from existing investors SMH Private Equity Group, ABS Ventures, Austin Ventures, and Trellis Partners. An item’s price is the price.

Balance Sheet 67

Balance Sheet Private Equity LP IPO 67

Hunter Walker

SEPTEMBER 29, 2022

Below I’ll share some of the principles we use at Homebrew , knowing that there’s not really a single ‘right’ answer for a fund manager. Most of this discussion is about ‘playing offense’ — working towards being a good steward of LP capital and the risk/reward associated with VC. Pigs get fat but hogs get slaughtered.

Venture Capital 122

Venture Capital Cap Table LP Equity 122

Both Sides of the Table

JUNE 29, 2011

It’s as though we forgot the management mantra of the 90′s about “core competencies&# or the most common VC advice to entrepreneurs: Focus. I believe some VCs have entered the early-stage market as simply an option on future financing rounds. The LP Community Hasn’t Yet Caught Up. Funny, that.

Venture Capital 296

Venture Capital Software LP Early Stage 296

Haystack

JULY 20, 2018

From an investment point of view, managing and deploying capital in the same physical area makes sense, where investors can work with young companies and help them with a variety of things. Will the next company to raise $100M in financing just poach from decent seed-stage companies and pay triple the amount to lock up talent?

San Francisco 116

San Francisco Silicon Valley Seattle Venture Capital 116

Both Sides of the Table

JANUARY 16, 2012

These include building products, recruiting, managing your finances, marketing, selling, getting feedback from customers and … fund raising. ” What he meant was that since your scarcest resource as a manager or sales rep is your time you need to qualify better. People who manage processes make more sales.

Developer 366

Developer Silicon Valley PR Las Vegas 366

Professor VC

SEPTEMBER 24, 2009

I was a limited partner in Angel Investors, LP, Ron Conways fund in the late 1990s. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. I also teach Entrepreneurial Finance at San Jose State.

San Jose 33

San Jose Angel Investor Venture Capital Mezzanine 33

Both Sides of the Table

JUNE 8, 2014

Cincinnati has had the accelerator The Brandery for several years, which caters to the great strengths of design and brand management that are dominant in this city. million under management across three funds. Our fund has more interest from potential LP investors than our fund needs. Angels & Recycled Capital.

Silicon Valley 390

Silicon Valley Kansas City Startup Venture Capital 390

Agile VC

DECEMBER 6, 2012

A little more inside baseball from the VC biz… why VC’s rarely make “crossover” investments, with capital from multiple funds the VC firm manages invested in a single startup (see note 1). If Acme Ventures III, LP invests in Startup X then typically Acme Ventures IV, LP would not. Why is this?

LP 178

LP Balance Sheet Differentiation Limited Partner 178

Agile VC

NOVEMBER 13, 2012

The IPO market remained closed to IT startups, but there were big acquisitions like Google buying YouTube for $1.65B (Fall 2006) and late stage financing rounds for companies like Facebook (Microsoft round at $15B valuation in Fall 2007). Kevin Rose was on the cover of BusinessWeek. So at a fund level (e.g.

LP 154

LP Portfolio Venture Capital IRR 154

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. These mutual funds “mark-to-market” every day, and fund managers are compensated periodically on this performance. By the first quarter of 2016, the late-stage financing market had changed materially. This is uncharted territory.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

This is going to be BIG.

MARCH 3, 2019

We do the work of sorting through the pitch decks of everyone and their mother, finding the diamonds in the rough, helping them turn an idea into something that looks like a company—and we do it for a fraction of the management fees of our later stage counterparts. Seed round investors get a tidy 18.2x

Portfolio 110

Portfolio Burn Rate LP Distribution 110

Both Sides of the Table

MARCH 30, 2016

If you want to see what was on my mind – I started foreshadowing change publicly in October 2015 with a forecast of what I expected in 2016 VC funding markets at a presentation I gave at the annual Cendana VC/LP conference hosted by Michael Kim. Great companies get financed.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

Both Sides of the Table

JUNE 5, 2016

I remember when seed funds first started (they were being incorrectly called “super angels” and then Micro VCs before Seed Funds stuck) and every LP (who invest in VCs) told me they weren’t convinced about Seed Funds (too small, too hard to pick winners, would they be able to follow on?). Explosion in Seed Funds.

Venture Capital 150

Venture Capital Silicon Valley Burn Rate LP 150

Austin Startup

JUNE 26, 2019

If you’re a founder/product manager/business owner, I encourage you to find that out! Do you want someone already making $12–17/hour watching your kid to make less (so a LP can make their returns…)? and the outcomes. “If If X were true/false, then the whole thing would succeed/crumble”. People are trying, and we should keep trying.

Silicon Valley 54

Silicon Valley Startup B2C Sweat Equity 54

K9 Ventures

NOVEMBER 30, 2008

The birth of modern-day venture capital (not considering the European monarchs financing explorations and projects as venture capital) can be traced back to American Research and Development, which was started by Georges Doriot. In return for the operational role the GPs play, their firm receives a Management Fee.

IRR 48

IRR Venture Capital LP Early Stage 48

www.quora.com

SEPTEMBER 22, 2011

Some finance guy said "12k a month minimum" and someone replied "I must be living in abject poverty" and its true. They are not even investing with their own money, but with their LP's money. 109k/year plus the option to build more widgets in the future. Therefore the risks to the founders are greater.

Equity 40

Equity Employee Founder Cofounder 40

VC Cafe

APRIL 9, 2010

NGN Capital; Peregrine Ventures Buyer Funds: NGN BioMed Opportunity II LP. Battery Ventures; Carmel Ventures; Hyperion Israel Venture Partners; StageOne Ventures; Star Ventures Management GmbH. Bessemer Venture Partners;Jerusalem Venture Partners; Star Ventures Management GmbH;Tamir Fishman Ventures; Walden Israel. Feb-2-2010.

Venture Capital 68

Venture Capital LLC LP 68