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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.

Valuations 101: The Venture Capital Method

Gust

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. 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.

Bad Notes on Venture Capital

Both Sides of the Table

On the phone … Me: So, you raised venture capital? Me: There is no rational explanation for valuations of A round companies by ANY objective financial measure. If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. People seem concerned about valuation. This week.

Q316 State of Venture Capital Update With Cooley

Feld Thoughts

This quarter they interviewed me as part of it on Quarterly VC Update: Brad Feld on the State of Venture Capital Investing. The existential freakout that occurred in January and February seemed like the distant past with the lingering hangover being a clearer focus on valuation and overall funding needs from new investors. There is a huge capital supply gap for companies that are in between early startups and companies that are successful growth companies.

Why 2017 Should be a Great Year to Raise Venture Capital

Both Sides of the Table

Recently Upfront Ventures published its outlook for the technology startup world and venture capital overall titled it “ WTF Happened to Winter ?” venture-capital startup

It’s Not Easy applied to Venture Capital

K9 Ventures

If you’re even remotely connected to the “industry” of Venture Capital, you need to read Howard Marks’ It’s Not Easy memo. Pattern matching in venture capital may work for figuring out how to build companies, but it is less likely to work for ideas.

What Do LPs Think of the Venture Capital Markets for 2016?

Both Sides of the Table

At the Upfront Summit in early February, we had a chance to have many off-the-record conversations with Limited Partners (LPs) who fund Venture Capital (VC) funds about their views of the market. LPs Still Believe Strongly in Venture Capital as a Diverse Source of Returns.

The Rise of Chinese Venture Capital – (Part 3 of 5)

Steve Blank

This post is about the rise of Chinese venture capital and how it helped build the countries entrepreneurial ecosystem. The Rise of Chinese Venture Capital. SBIR and STTR programs, the Torch Program’s funding for new ventures was limited to seed funding the front end.

Valuations 101: Scorecard Valuation Methodology

Gust

Individual accredited investors in typical angel deals put personal capital at risk for an equity share of growth-oriented, start-up companies. In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 Scorecard Valuation Methodology. Such comparisons can only be made for companies at the same stage of development, in this case, for pre-revenue startup ventures. The range of the data is from a low pre-money valuation of $0.8

Valuation vs Ownership

A VC : Venture Capital and Technology

They want to own 20% of the business but care less about the valuation. Another firm shows up, a firm that is less valuation oriented, and they offer $5mm for 20% of the business, which works out to $20mm pre/$25mm post. And it is why USV is committed to small fund sizes, small rounds, and smaller valuations. He did that by keeping his rounds small in the early days and only scaling them when he had to and the valuations offered were much higher.

The Billion Dollar Valuation Club

A VC : Venture Capital and Technology

As David Hornik points out in the comments to Aileen's post, using private company valuations to do this excercise means you will count companies with inflated valuations that they won't be able to live up to. But I think it is OK to use private company valuations as long as you come back and revisit the list from time to time, add new names, and subtract the ones that did not live up to the hype.   Venture Capital and Technology

How To Grow A Company Without Venture Capital

YoungUpstarts

As an entrepreneur, though, you should look no further than Fab.com as a cautionary tale of venture capital. Before a quiet acquisition by PCH Innovations for just $15 million, Fab had raised 11 rounds of VC funding at a $900 million valuation. The Drawbacks of Venture Capital.

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.

data.world Lands $18.7 Million More in Venture Capital Funding

SiliconHills

million in venture capital funding. The Austin-based startup reported the funding round closed at double the valuation of its previous round. Million More in Venture Capital Funding appeared first on SiliconHills. The fast growing data.world, a social network for data people, Tuesday announced it has closed on $18.7 To date, data.world has raised $32.7 million. The company plans to use the money to build its […] The post data.world Lands $18.7

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.

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. If you try to raise between significant milestones, unless you can show other reasons why you're killing it (the nice graph in our case), you're risking getting hit on valuation (or lack of funding) because your momentum is unclear and/or people can't perceive the real progress your making.

B is for BUBBLE: Venture Capital in 2013

VC Cafe

New data from research firm Pitchbook makes it official: valuations are at an all-time high. Across all investment stages, median pre-money valuations last year rose dramatically. Last year, the VC industry partied like its 1999.

Sustainable startup growth and venture capital

The Equity Kicker

On Friday it seemed like everyone in the venture capital industry was again reading about market turmoil, this time the news is that angel investors are pulling back and valuations taking a hit. In his post The end of the big venture formula Danny Crichton put it like this: What’s needed is a sustainable approach to startup growth and venture capital. The best startups capture all the returns so focusing too much on entry valuation is a mistake.

Will Your Startup Get Venture Capital or IPO in 2013?

Startup Professionals Musings

Based on the final report for 2012 from Thomson Reuters and the National Venture Capital Association (NVCA), it may appear that IPOs are back as a viable startup exit strategy. For the full year 2012, venture-backed initial public offerings raised $21.5

Startups With Real Revenue Can Get Venture Capital

Startup Professionals Musings

I just read the Q1 2011 report from CB Insights , which shows venture capital is back. To me, this indicates that venture capitalists (VCs) are looking for business, but not from first-time startups. Back to VCs, Silicon Valley venture capital firms are still the most active.

5 Ways To Radically Improve Your Company Valuation

YFS Magazine

For business owners, startup valuation is a topic that causes lots of angst, raises tons of questions and definitely gets emotions blazing. Finance Grow business valuation company valuation fundraising investors invse money raising capital raising startup capital raising venture capital

Understanding Changes in the Software & Venture Capital Industries

Both Sides of the Table

In this three-part series I will explore the ways that the Venture Capital industry has changed over the past 5 years that I would argue are a direct result of changes in the software industry, not the other way around.

On Human Capital & Venture Capital

thebarefootvc

It is the human capital involved, both internally with company teams and externally with advisors, boards and investors, that is going to differentiate which startups survive and become the disruptive businesses of tomorrow.

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.

A 12 Step Program for Breaking An Addiction to Venture Capital

Bryce Dot VC

Venture Capital is a hell of a drug. Step 2- Came to believe that a metric greater than our valuation could restore us to sanity. At Indie.vc

Worked Up about Unrealistic Venture Capital Valuation

Growthink Blog

So, Mike tells me he wants to raise a first round of venture capital based on a $100 million valuation. Now, anyone who knows anything about venture capital will literally laugh when they read a line like that. Getting a $100 Million valuation is impossible for a startup. In fact, getting above a $10 Million valuation is also virtually impossible unless you have at least some traction (e.g., Yes, this blog post is going to piss off somebody.

NDA 14

The Thin Skin of the Venture Capital Market

This is going to be BIG.

Billion valuation. Personally, I think it was kind of a bad idea--not necessarily because of the valuation, but because it seems like $120mm is way too much money for a software company at this stage, especially one that might even be cashflow positive right now. Love Slack, but $120mm and a $1B valuation at this point will almost certainly lead to lack of focus and less than optimal decision making. Venture Capital & Technology

Startup Valuation: How Much Is Your Company Worth?

Seed Stage Capital

skip to main | skip to sidebar 19 January 2010 Startup Valuation: How Much Is Your Company Worth? Part of my job description involves prepping startups to raise capital. One of the most common issues that concern entrepreneurs is how to address the "Valuation Question."

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.

Six Reasons Not to Invest in a Venture Capital Fund

This is going to be BIG.

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. On paper valuations are kind of meaningless. Just because the next biggest fool pays X for preferred shares, creating an implicit valuation for all the shares, doesn't mean you can either get out of it at that price or that you can be sure of the exit price.

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.

Quigley Report - Predicting a Venture Capital Revival

VentureWoods

An interesting report predicting that venture capital asset class will make a strong revival over next 10 years. Quigley Report: A Venture Capital Revival is Upon Us.

Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. Other founders, “as a privately held company we don’t disclose our valuation.&# Me, “dude, I’m not a journalist.

When Valuation Doesn’t Matter

StartupCFO

Valuation is always important to founders. No less an authority than Om Malik had this say : “There was a time when venture capital firm Kleiner Perkins Caufield & Byers, was the first money in hot, new start-ups. valuation. At that point, valuations explode. The capital is piling behind something proven and scalable. The post When Valuation Doesn’t Matter appeared first on StartupCFO : Mark MacLeod.

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. 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. Most people need a little bit of capital to bring a product to market--or they're an engineer.

Want to Raise Venture Capital More Easily? Clean Up Your Own Shite First

Both Sides of the Table

I know that the tone of the title and post will seem a bit aggressive for a post from a venture capitalist on fund raising. If you want to raise venture capital more easily the advice could be quite practical and counter-intuitive. Clean up your own shite.

2011 Valuation Survey of North American Angel Groups

Gust

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs. To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies. See the 2010 data reported here: Current Pre-money Valuations of Pre-revenue Companies. 2011 Angel Group Valuation Survey. Pre-money Valuation of Pre-revenue Companies.

Venture capital is only right for a small percentage of businesses

The Equity Kicker

Just today I was with a company where the most likely exit value is £25m, that could be a great result for the founders and employees, but wouldn’t be a great result for a VC, and hence raising venture capital is not the right idea for them, and they probably shouldn’t have been wasting cycles talking with us. The irony is that for companies that shouldn’t be raising venture the process often turns out to be no easier than the alternatives. VC isn’t good for every company.

Valuation Methods 101

Gust

This is the first of a six part series on different methods used by angel investors to arrive at pre-money startup valuations. Detailed descriptions will be published over the next few weeks: The Scorecard Method: This method compares the target company to typical angel-funded startup ventures and adjusts the average valuation of recently funded companies in the region to establish a pre-money valuation of the target. The Venture Capital Method.

The Coming Brick Wall in Venture Capital & Why This is Good for US Innovation

Both Sides of the Table

This is the final part of a 3-part series on the major changes in the structure of the software & the venture capital industries. But … Downsizing Venture Capital. Creative destruction is what drives capitalism and innovation.