Feld Thoughts

Entrepreneurial Density and Venture Capital

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Two of his latest articles talk about entrepreneurial density and venture capital. The Connection Between Venture Capital and Diverse, Dense Communities. In it, he looked at Venture Capital financing (total dollars and number of deals) on a per-capital basis. And Richard acknowledges this: “I’ll continue to track the evolving geography of start-ups and venture capital in future posts.

A Venture Capital History Perspective From Jack Tankersley

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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.

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Q316 State of Venture Capital Update With Cooley

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This quarter they interviewed me as part of it on Quarterly VC Update: Brad Feld on the State of Venture Capital Investing. At the same time, if you are a clearly successful growth company, there is a huge amount of capital available once you’ve reached a point of clear success (often after $20m – $40m has been raised). There is a huge capital supply gap for companies that are in between early startups and companies that are successful growth companies.

Something Ventured: The Founding of the Venture Capital Industry

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Last night Amy and I watched the movie Something Ventured: Risk, Reward, and the Original Venture Capitalists. I figured Amy would veto Something Ventured after 15 minutes. If you are a VC, or aspire to be a VC, do yourself a favor and watch Something Ventured right now.

Learn Everything You Need To Know About Venture Capital in 90 Minutes

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My partner Jason and our dear friend Professor Brad Bernthal are attempting to teach everything there is to know about the venture ecosystem in 90 minutes on January 28th. The post Learn Everything You Need To Know About Venture Capital in 90 Minutes appeared first on Feld Thoughts.

The Best Time To Invest In Something Is …

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Venture Capital avc fred wilson jerry colonnaAt 18 minutes into this awesome talk that Fred Wilson did at MIT a few weeks ago , he finishes the statement “ The best time to invest in something is.” ” “ … when nobody wants to invest in it but you.”

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Book: The Business of Venture Capital

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In the fall of 2010 Mahendra Ramsinghani reached out to me by email about a new book he was working on called The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies. I was deep into writing Venture Deals: Be Smarter Than Your Lawyer and VC with one of my other partners – Jason Mendelson – and it was neat to see how Mahendra’s book complimented ours.

Unicorpse

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From section #6 in Aileen’s post: “Given how much capital our private companies have raised in the past few years, most likely have cash to fund 2-4+ more years of runway. Venture capitalist Marc Andreessen warned in a tweetstorm that startups with high burn rates would “vaporize.”

Fair and Reasonable

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Venture Capital fair reasonableI was on the phone with an old friend last week. We were talking about a few things around a negotiation, and he said something profound. “I just want things to be fair and reasonable.” ” I loved this phrase. I learned this value from Len Fassler and Jerry Poch in 1993 when they acquired my first company. I had never bought, sold, or invested in anything up to that point.

We Lead or We Participate

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Venture Capital terms VCOver the years, I’ve been in many multi-party negotiations. I don’t know the maximum number of participants in a single negotiation, but I’m sure it’s greater than ten active negotiating parties in a transaction. I don’t mean the number of entities participating in the transaction, but the actual number of active negotiating entities.

Does VC Fund Differentiation Matter?

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Venture Capital differentiation returns seed strategyI’ve met and emailed with many pre-seed and seed GPs in the past year. Over sushi last night with two of them, who are also long-time friends, one of them asked me “Brad, how do you think we are differentiated?”

I Don’t Accept This Apology

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Venture Capital human rights sexual harassmentI don’t believe that one starts an apology with the sentence “ The past 24 hours have been the darkest of my life.” In my world, the apology is to another person. It’s not a tone setting exercise, or a plea for sympathy, for the one making the apology. I was fuming after seeing the public apology on Axios from Justin Caldbeck. I could be wrong, but it felt like it was written by a crisis management PR firm.

Capital Is Cheap And Labor Is Expensive

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While my cynicism around government math and how inflation is calculated is substantial, there isn’t much question that since 2008 capital has been extremely cheap. But I think cheap capital is only half of the equation.

Why VCs Should Recycle Their Management Fees

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Understanding what “recycling management fees” means is a fundamental part of understanding the economics of a venture firm. The advantage, for all the investors (the VCs and their LPs), is that $100m gets put to work as invested capital, rather than just $85m.

What’s Happening Today That No One Sees?

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” When I go back a decade, we were just making the decision not to raise another Mobius Venture Capital fund. Venture Capital and entrepreneurship was dramatically out of favor. Early stage and seed capital was extremely difficult to find.

The Religion of Silicon Valley

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Venture Capital chris shipley fred wilson marc andreessen religion silicon valley startup communities tech industry There has been a lull in the chanting that “Silicon Valley is the center of the tech universe.” ” I’m in Boulder for the next three weeks and I woke up pondering something Ben Casnocha said to me the last time we were together. Silicon Valley is a religion, just like Crossfit is a religion.

Are Individual Angel Investors Starting To Get Tapped Out?

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I’m not seeing much evidence of this – yet … I have seen some of the more prolific angels start to slow down because capital is not recycling as fast as they are putting it out. There is also a huge amount of seed capital available from seed funds. While there is an increasing amount of seed capital / seed investors, the number of companies seeking seed investment has grown much faster in the last 24 months.

The Beginning of the End or the End of the Beginning

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Entrepreneurship cycles long term Venture CapitalI was in a conversation last week with a friend who asked “do you think this is the beginning of the end?” ” We were discussing something totally wacky that had just happened that clearly could be viewed as an indicator that we have crested the peak of this economic cycle.

The Retrade

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This happens regularly in M&A deals especially with buyers who are buying thinly capitalized companies or ones who don’t care about their long term reputation. However, what’s notable to me on the investment side is that the retrade is happening up and down the capital stack. Venture Capital investing retrade termsThe retrades have begun.

Founders – Use Your Down Round To Clean Up Your Cap Table

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I watched, participated, and suffered through every type of creative financing as companies were struggling to raise capital in this time frame. First, make sure you know where the capital is going to come from to fully fund your business. your insiders require there to be an outside lead, or you need to raise much more capital than your insiders can provide.). Second, keep your capital structure simple. Venture Capital cap table down round Financing VC

The Silliness Of Recapping Seed Rounds

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In this case, we misread the respect – or lack thereof – that a co-investor and an entrepreneur would have for the other seed investors and the seed capital that helped them get a product built and into customer hands. Venture Capital fg angels recap seedHere’s the scenario. A company raises $1m of seed money from angels in a convertible note with a $6m cap.

Do You Regret Failed Investments?

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So, my brain was already trending toward the headspace around radical self-inquiry in the context of venture capital. ” And, I’ve seen some of Fred’s own behavior around this, as he won’t touch anything hardware-related at all because of some miserable hardware-related failures during the Internet Bubble (or is it “internet bubble” now that the AP Style Guide says not to capitalize internet.).

The Paradox of VC Value-Add

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The next person on the list of supporters is Scott Maxwell at OpenView Venture Partners. ” Second, I went through the scale up of the organizational VC firm in the late 1990s at Mobius Venture Capital. Venture Capital baremetalvc deeply held beliefs openview scott maxwell Techstars value-add VC Scott Maxwell of OpenView Partners had an awesome post up this morning titled The Truth About VC Value-Add.

Spending The Day With Another VC Firm

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Venture Capital homebrew A few weeks ago Hunter Walk and Satya Patel of Homebrew , a one year old seed-stage VC firm that my partners and I are investors in, came and spent the day in Boulder.

History Doesn’t Repeat Itself, But It Does Rhyme

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The questions were great, but some of what they were hearing about venture capital was scary as s**t. A handful of them had jobs in venture capital firms and we talked about how to be effective as a freshly minted associated. Venture Investing Just Had Its Biggest Q1 in 15 Years, Says PwC Report. billion going into venture capital. Venture Capital bubble frog mark twain scorpion silicon blah silicon flatirons

When VCs Don’t B t You

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This LP is also a long time investor in Union Square Ventures and was one of the first people Fred introduced us to when we started raising the first Foundry Group fund in 2007. The prior fund that I had co-founded – Mobius Venture Capital – had blown up after having a very successful first fund in 1997. Fred Wilson at Union Square Ventures was by far the most helpful. Over 33% of our capital ended up being from the same LPs who invested in USV.

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Venture Deals – Third Edition

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The third edition of Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist is going to print and pre-orders are up on Amazon. Thanks to everyone for all their help, support, and interest in Venture Deals over the years. Term Sheet book venture deals

The Pre-money vs. Post-money Confusion With Convertible Notes

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This mess is especially yucky if the lawyers don’t focus on the final cap table and the capitalization opinion until the last few days of the process. And, if Jason and I ever write a third edition of Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist our chapter on convertible notes might now be two chapters. Venture Capital convertible notes glowforge mattermark post-money pre-money SAFE suster VC

Resolving Conflicts in a VC Partnership

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Venture Capital conflict partnership VC I got the following question the other day. “If you get a chance, I’d request you to write a blog post about various business decision related conflicts or misunderstanding that might occur in a partnership and how you folks at the Foundry Group resolve it. My partners and I grapple with such challenges quite often.”

It’s All About The Entrepreneur

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We provide the capital allocation function and are rewarded when we do it well and eventually go out of business when we don’t do it well. Venture Capital Entrepreneurship minneapolis TechstarsI’m in Minneapolis with my partner Seth. We had a meeting at Best Buy headquarters, met with a gang from the Mayo Clinic who drove up from Rochester, spent the afternoon at the Techstars Retail Accelerator which is at Target headquarters, and had dinner with Revolar.

What Acquihire Really Means

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Then acquires started using the concept of acquihire to try to shift consideration away from the cap table and instead increase the amount of “retention consideration” going to the remaining employees, independent of the capitalization of the company. Venture Capital acquihire acquisition Books google m&aI hope you had a nice 4th of July yesterday. Amy and I hid out all day in Longmont, playing with the dogs, napping, and reading.

The Second Reboot VC Bootcamp

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Charlie O’Donnell (Brooklyn Bridge Ventures): The Feminine Will Save Us. David Goldberg (Corigin Ventures): My VC Reboot. Elaine Stead (Blue Sky Ventures): The weeping woman. Venture Capital boot camp jerry colonna reboot VCOn Saturday night I got on a plane and flew to the other side of the planet, where I am now. I’m in Melbourne, finishing my coffee, getting ready for one last meeting here before I fly with David Cohen to Adelaide for the day.

Dear VCs: What Happens When Your Words And Your Actions Don’t Match

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Venture Capital actions behavior life startup life VC words Almost exactly a year ago I wrote a post Your Words Should Match Your Actions. It was a generic rant that resulted from me watching a couple of VCs blow up their reputations with entrepreneurs I know because of how they treated them. This morning I ended up on an email thread about this. I’m going to anonymize it, but you’ll get the point.

Building An Autonomous and Virtual World: Softbank Teams With Mapbox

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When we led Eric’s first financing — a $10 million round and the first capital into the bootstrapped team — we believed mobile location and mapping would be big. Back in 1997, Softbank Technology Ventures (which became Mobius Venture Capital) was the first VC fund I helped raise. The physical world will be the reference coordinates for the fleets of robot cars of our imagination.

The Ideal Financial Reporting Tempo For A VC-Backed Company

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This was an artifact of the last 30 years of venture capital, where VCs often would use the board meeting as the way to primarily engage with the company. Over the past few days, I’ve had a similar conversation about reporting tempo with three different people (2 CFOs and 1 CEO). In each case, we snuck up on the issue, rather than starting with it. The fundamental question addressed what the reporting tempo to the board should be.

Venture Deals 3rd Edition Available via Kindle Matchbook

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If you have purchased the hardcopy edition of Venture Deals 3rd Edition, you can now buy the Kindle version also for $2.99 The post Venture Deals 3rd Edition Available via Kindle Matchbook appeared first on Feld Thoughts. Venture Capital book venture deals

What’s Old Is New Again

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Entrepreneurship cycles investing Venture Capital I know I’m getting old. I remember in 2007 when the idea of a super angel appeared, where successful entrepreneurs were suddenly angel investors making 10 or more seed investments a year. This was a “new” innovation that was celebrated with much fanfare. Between 1994 and 1996 I made 40 angel investments with the money I made from the sale of my first company.

Transparent Funding Announcements

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Kyle followed the tradition of extreme openness about the financing process that I think Rand Fishkin started with his post three years ago titled Moz’s $18 Million Venture Financing: Our Story, Metrics and Future. Venture Capital buffer fundraising mattermark moz salesloft transparency VCWe are in a cycle again where how much you raise is the story. It’s what the press likes to write about (e.g. Company X raised Y from A, B, and C).

Thanks Elon Musk For Being A Real Leader On Patent Reform

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As Ars Technica summarizes in New study suggests patent trolls really are killing startups : Turns out there is a very real, and very negative, correlation between patent troll lawsuits and the venture capital funding that startups rely on.

Cynic or Optimist?

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Venture Capital andy grove intel investing macro paranoid optimistThere will be a downturn. It might be in a day. It might be in a year. It might be in a decade. We have no idea when it will come, but it will come. I was talking to a VC yesterday who was an entrepreneur in the late 1990s, which we is now commonly referred to as the Internet bubble. He was very successful as an entrepreneur and has continued to be very successful as a VC.