David Teten

NOVEMBER 23, 2020

In its first full year of operation, VCAP attracted 159 applicants. Numerous thoughtful people are worried about how technological disruption will destroy jobs. The classical economist response is that technological disruption also creates new jobs, e.g., “video game designer”. They were sold to Albertson’s for over $300m.

Venture Capital 60

Venture Capital Partner Technical Review Cofounder 60

Steve Blank

MARCH 31, 2014

In fact, it was only 7 years ago that Apple shipped its first iPhone and Google introduced its Android operating system. 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.

Private Equity 326

Private Equity Metrics China Intellectual Property 326

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. Brands can fund operating losses in order to scale faster and acquire market share. Investors measure their success by looking at the internal rate of return (IRR).

IRR 143

IRR Marketing Startup Angel Investor 143

Steve Blank

JUNE 23, 2016

As a consequence, corporations used metrics like return on net assets (RONA), return on capital deployed, and internal rate of return (IRR) to measure efficiency. In contrast, startups operate with speed and urgency, making decisions with incomplete information. Startups are unencumbered by the status quo.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227

The Next Web

DECEMBER 16, 2012

It calculates value on the bases of revenue that the buyer can expect to earn from the site, taking into account the risks that are involved in operating it. The secondary drivers are the site’s age and the technologies on which it’s built. Technology. The final value driver is technology.

Valuation 128

Valuation NPV Net Present Value IRR 128

Steve Blank

AUGUST 5, 2014

I liked meeting people, hearing the company plans, learning about their technology, figuring out if it was for real—all that was fun. I was on the way to my lifetime IRR of 90%. We brought in all operating guys—all had done startups, all had technical backgrounds. How could I do that for a living? But then, trouble.

Venture Capital 334

Venture Capital Silicon Valley Chicago Cofounder 334

Both Sides of the Table

MAY 25, 2013

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? I’ll admit that I do know one VC firm who’s strategy is not to call their entrepreneurs and not to be involved in operations.

LP 374

LP Later Stage IRR Term Sheet 374

David Teten

AUGUST 21, 2019

The RBI investor is motivated to help the company grow because that speeds up the pace of revenue payback, and therefore IRR. Borchers points out: “Only 50% of our investment activity involves technology-based businesses. Aligned incentives. This is similar to the incentives of a traditional equity VC, but unlike traditional lenders.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Ben's Blog

AUGUST 17, 2020

While both earnings and EBITDA multiples are widely used, we often see investors in public and private technology companies resort to revenue multiples (enterprise value / revenue). This growth could be a function of product differentiation, go-to-market operations, sheer market size, new geographies, and expansion into adjacent categories.

Valuation 36

Valuation Balance Sheet Cofounder Forecast 36

abovethecrowd.com

APRIL 20, 2016

In late 2015, many public technology companies saw a significant retrenchment in their share prices primarily as a result of a reduction in valuation multiples. In Q1 of 2016 there were zero VC-backed technology IPOs. Do you feel the need to raise more capital quickly before the prices erode further and bring down your IRR?

IPO 40

IPO Term Sheet Silicon Valley Valuation 40