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Venture Capital is About Human Capital

Both Sides of the Table

Most VCs did well academically and had enough career success that a venture firm was willing to give them an investment role or they were able to raise their own fund. Fundamentally venture capital is about human capital. Venture Capital is a people business.

A Venture Capital History Perspective From Jack Tankersley

Feld Thoughts

In January, Jerry Neumann wrote a long and detailed analysis of his view of the VC industry in the 1980’s titled Heat Death: Venture Capital in the 1980’s. The key reason for the explosion in capital flowing into the industry, and therefore the large increase in practitioners, had nothing to do with 1970’s performance, early stage investing, or technology. Continental Capital*. $ 250,000. KPC&B II. $ 775,000.

17 Venture Capital Blogs You Should Be Reading

Up and Running

Whether or not you’re raising money for your business, getting advice from venture capitalists can be invaluable. Inside the Minds of Top Venture Capitalists: Blogs You Need to Read to Understand How VCs Think. Andrew Parker is a VC with Spark Capital in Boston.

Where Do Venture Capital Dollars Actually Come From? This Visual Explains

Agile VC

Most folks reading this will know that many startups were built in part with the help of venture capital. So I wanted to dive a little deeper into what I call the startup capital supply chain. Google, Intel Capital).

It’s Morning in Venture Capital

Both Sides of the Table

Many observers of the venture capital industry have questioned whether its best days are behind it. They are, in fact, great news for traditional venture capitalists. The most successful of these businesses will still need venture capital to scale their businesses.

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.

SBIC 51

Myth Busters: Debunking Seven Conventional Wisdom Maxims of Venture Capital

Genuine VC

Compared to most other areas of finance, venture capital is practiced as more of an art, as opposed to a science. The art of venture capital also means that for entrepreneurs raising it, there isn’t one definitive playbook which can be used as a guide. To make money, VCs should aim to have meaningful target ownership in their portfolio investments, but 20% is by no means some kind of magic number. MYTH: The venture capital model is broken.

Valuations 101: The Venture Capital Method

Gust

The Venture Capital Method (VC Method) was first described by Professor Bill Sahlman at Harvard Business School in 1987 in a case study and has been revised since. It is one of the useful methods for establishing the pre-money valuation of pre-revenue startup ventures. Most angels understand that half of new ventures fail and the best an investor can expect from nine of ten investments is return of capital for a portfolio of ten.

What Do Venture Capital Firms Want?

Up and Running

What are venture capitalists looking for? What do venture capitalists want in an investment? I introduce this topic with that reworked joke because so many people say “venture capital” when they really mean “angel investors” or “outside investors.”

Deal Selection in Venture Capital

Rob Go

Every senior exec at every portfolio company likewise, has a set of data that they know cold about their function and comparable companies. Source, Select, Win. Those are the three activities that all VC’s do.

How to Build a Successful and Diverse Venture Capital Portfolio Without Really Trying

This is going to be BIG.

After checking out The Information's "open dataset" on diversity in venture capital , I felt pretty disappointed. Who is actually building a portfolio whose founders reflect the diversity of the greater population? I went back and calculated the number of companies in the first Brooklyn Bridge Ventures portfolio who have at least one founder who is female, from an underrepresented minority group, or LGBT.

Got "Founder Fit?" If You Want Venture Capital, You Need It

Up and Running

A few weeks ago I spoke with Boris Wertz, founder of JustBooks, COO of AbeBooks and founding-partner of Version One Ventures. In ” At present, Version One Ventures portfolio includes startups from all over the United States and Canada. Boris Wertz.

What to Expect When You're Expecting Venture Capital Returns

This is going to be BIG.

One of the first things I did when I joined the venture asset class as a lowly institutional LP analyst in 2001 was to build the VC fund cashflow model. And no, the numbers don't exactly add up--but they're more than close enough for venture capital.

How ff Venture Capital Works With Universities And Students

David Teten

I meet with a lot of people from the academic world, so I thought it would be helpful to summarize how ff Venture Capital works with universities. Our portfolio companies are currently seeking to fill over 190 open openings ; ffVC also currently has 3 full-time open jobs.

Dos and Don’ts When Raising Venture Capital For the First Time

VC Cafe

The post “ What I learned from raising venture capital ” by Gabriel Weinberg , the founder of DuckDuckGo is one of them. WHAT TO DO WHEN RAISING VENTURE CAPITAL. WHAT NOT TO DO WHEN RAISING VENTURE CAPITAL.

Why are some venture capital firms not funding women?

Gust

The facile answer to this assumptive question is “because some women are not seeking funding from venture capital firms” But there is actually quite a bit of truth in both statements. Women-led ventures definitely account for a smaller percentage of venture investments than do ventures led by men, but women-led ventures also account for a MUCH smaller percentage of ventures seeking funding in the first place!

The Experience of Being a Limited Partner in Venture Capital

This is going to be BIG.

You run X amount of capital and Y percentage of that is allocated to venture capital. You've decided to spread that across Z funds and you hope your portfolio meets some threshold. That happens most when the LPs represent a diverse group of industries and perspectives who want to be helpful to portfolio companies and founders. Partnership investing is boring.

What I learned from raising venture capital

www.gabrielweinberg.com

I recently raised venture capital for the first time. DuckDuckGo raised a series A round from Union Square Ventures and a handful of awesome angel investors. They were: Andreessen Horowitz Matrix Partners SV Angel Redpoint Morganthaler Gerylock Charles River Ventures DFJ Having multiple term sheets really matters. Takin' VC Money (Money Cash IPO's) by Smixx Forewarning Be forewarned, this post is long. You can tl;dr it by reading the section titles.

On Human Capital & Venture Capital

thebarefootvc

However, the reality is that I am building a portfolio of investments and, like Brad, I believe in being an active and helpful investor. My (very rudimentary) graph of the relationship between human capital and financial capital in a company’s evolution.

How to get a job in Venture Capital

Jason Ball's TechBytes

4) Fix a portfolio company- This works if you have operational skills. Every VC has at least one portfolio co that’s not doing well. If you can fix one (or more) venture backed co’s, you will be loved and will probably find yourself a more permanent role. Analyst, Associate, Principal, Venture Partner, General Partner, Managing Partner – all require different amounts of the above. Venture Capital I get asked this question a *lot*.

Why Venture Capital No Longer Defines Innovation

ReadWriteStart

Today’s venture capital deal flow to innovative new companies looks a lot like a fat man trying to squeeze into a slim Italian suit. In 2000, venture capitalists poured a staggering $112.2 Today, venture capital deal flow has slowed to a relative trickle, just $28.4

Six Reasons Not to Invest in a Venture Capital Fund

This is going to be BIG.

More updates, more casual events, more exposure to portfolio companies, co-investing, etc., 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.

The Singularity hits Venture Capital (Wilson/Kauffman Redux)

Fred Destin

I mean, really, who still wants to be a venture capitalist ? And then we have Fred Wilson telling us that should venture capital die, there's always be blogging. I an now expecting Chris Dixon to say he is turning to Venture Capital , and then I will be officially confused. The schizophreny of the venture capitalist. Venture partnerships need to collectively find winners and drive as much cash at reasonable valuations as they can into these stars.

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 State of Cleantech Venture Capital: What Lies Ahead

Secret Formula

In late 2011 I decided to write up an internal analysis I’d done at Venrock about the state of cleantech venture capital and make it available broadly. What’s happening to cleantech venture capital? Philanthropic capital.

VC Portfolio Strategy

Rob Go

VC’s, and particularly seed focused VC’s, pursue a variety of different strategies in their portfolio. The main parameters that VC’s tend to think about around portfolio strategy are: 1. Concentration and staging of capital (how much and what stage and how much of the fund in a given company). The single best venture capital firm in the world would take this strategy: Invest in only one company.

How Do VCs Mitigate Risk In Their Investment Portfolios?

Ask The VC

Question: How do VCs mitigate risk in their investment portfolios? The primary ways VCs mitigate risk are (1) time diversification, (2) stage diversification, (3), sector diversification, (4) pro-rata or over pro-rata investing over time, and (5) number of investments in the portfolio. Number of investments in the portfolio: There is conventional wisdom that each fund should have 25 – 30 companies (or “names”) in each fund. Venture Capital hedging risk vc

CognitiveScale Lands $21.8 Million in Venture Capital

SiliconHills

million in venture capital. Norwest Venture Partners and Intel Capital co-led the round. CognitiveScale plans to use the money to expand its salesforce and on research and development of its product portfolio. As part of the deal, Norwest’s Promod Haque and Intel Capital’s Vibhor Rastogi will join […] The post CognitiveScale Lands $21.8 Million in Venture Capital appeared first on SiliconHills.

U.S. Venture Capital Has Its Biggest Quarter Since Dot-Com Days

allthingsd.com

Venture Capital Has Its Biggest Quarter Since Dot-Com Days. venture capitalists put $8.1 It’s clear that factors like the greater American economy and the bumpy tech IPO market don’t necessarily have a direct and/or timely correlation with venture capital spending.

5 Best-Kept Secrets About Venture Capital

Inc Startups

The most important things you need to know about how venture capital works--demystified. After 10 years as a successful entrepreneur, I''ve recently become a venture capitalist. Or at least, you''ll find it easier and experience less confusion and friction if you try to raise funding , or work in a venture capital-backed company. Here are my top 5 secrets I''ve learned about venture capital: 1.

Will Google Ventures Disrupt Venture Capital?

OnStartups

They’ve taken the classic venture capital playbook and out-executed just about everyone. Google Ventures , a co-investor alongside Sequoia in HubSpot’s series D, is one such firm. 6 Ways Google Ventures is Attempting to Disrupt the VC Industry.

How to Get into Venture Capital - An Update

This is going to be BIG.

About seven years ago, I wrote a post on breaking into venture capital and I continue to point the five or six people a week who ask me how to break into venture. The candidates for venture capital roles are already out there and usually in plain sight and there simply wasn''t anyone out there doing what Amrit was doing who wasn''t already fulltime at a firm. And no, analyzing startups is not a portfolio company benefit. Venture Capital & Technology

Why Venture Capital No Longer Defines Innovation

ReadWriteStart

Today’s venture capital deal flow to innovative new companies looks a lot like a fat man trying to squeeze into a slim Italian suit. In 2000, venture capitalists poured a staggering $112.2 Today, venture capital deal flow has slowed to a relative trickle, just $28.4

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

online.wsj.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. But now there is evidence that venture-backed start-ups fail at far higher numbers than the rate the industry usually cites. About three-quarters of venture-backed firms in the U.S. backed by venture capitalists. High Capital Franchises. Capital Available.

When it Comes to Venture Capital, Do Like Warren Does

Growthink Blog

All of a sudden, it is boom time again for venture capital funds, with over $10.3 billion in fresh capital raised by 578 funds in the 1st quarter, up 36% from 2012. But for the individual investor, is investing in a venture capital fund really a good idea? venture funds - and with so many of them pursuing similar deal sourcing strategies and approaches - it has become extremely difficult for VCs to find and secure high potential, well priced deals.

Beer Kegs and the Future of Venture Capital: What It Means for Entrepreneurs

Genuine VC

Last September I wrote a post outlining my view of the venture capital industry: increasingly evolving like the beer industry as it continues to mature. And much like the emergence of microbreweries specializing in craft beer, new Micro VCs (disclosure: like my own firm NextView Ventures ) are thriving by specializing along at least one or more of these three dimensions (geo, sector, stage) with a unique offering for a specific subset of entrepreneurs.

The Next Step in Disrupting Venture Capital: Emerging Manager Funds

Will Price

The Venture Capital industry is ripe for disruption. Over the last few years, super angels offered new capital to the market and groups such as Y-Combinator provided young entrepreneurs new avenues to success. The venture industry, however, lacks a very common model that the hedge fund industry has mastered - the emerging manager strategy. Emerging managers are young, smart, and successful analysts or portfolio managers who cut their teeth with a major hedge fund.

The 99: How the SEC protects you from venture capital returns.

This is going to be BIG.

Take venture capital, for example. To benefit from the explosive growth of companies like Uber, Airbnb, Dropbox, etc, you had to fit in either one of two categories: be an angel investor already in an inner circle of experienced angels and entrepreneurs, largely located in Silicon Valley, or be an investor in a venture capital fund that backed those companies. Below that and they need to keep you from investing in really risky stuff, like venture capital.

Understanding What’s Going on in #LATech

Both Sides of the Table

Upfront Ventures was created 20 years ago as one of the original VC funds in Los Angeles. https://medium.com/media/3c33723f326245292958d4b055dfb424/href Today we learned that another great fund was announced — Fika Ventures. startup venture-capital

Venture Capital Funds - How the Math Works

Angel Blog

Why the Size of Venture Capital Funds Matters to Angels and Entrepreneurs. My previous post was titled Venture Capital Firms Are Too Big. That post provides one important piece of data necessary to answer the really important question of why the size of venture capital funds matters to angel investors and entrepreneurs. Venture Capital Fund Math. This post is a high level summary of how the math works for a typical venture capital fund.