This is the last post on this topic, but there were some more questions. It takes about 6 Months to Reach First Close This chart is showing the median per vintage year, together with the 1st and 3rd quartile boundaries and a green average line (with a horrible R-Squared of 0.0087). In a first close, … Continue reading VC Funds: Six months to first close on 40-60% of final close size.
I got a few questions on last week's post about the number of months VC funds are in the market before a close. Raising VC Funds in the US vs. Rest of World I was asked to look at different geographies: Months in Market to Final Close for each Year of Vintage broken down by … Continue reading VC Funds: First-Time Funds take a Median of 12+ Months to Raise.
I get this question a lot: How long does it take to close a VC fund? We all know the anecdotes of marquee firms closing their funds within weeks. But don't forget that it often took 20 years to become a marquee firm and to build a robust platform and track record. So they closed … Continue reading VC Funds: A Median of 17 Months in Market to Final Close.
Minimum valuations and their required revenue at fixed value-creation-multiple of cash consumption. In the last blog post I wrote about Fred Wilson's excellent insight into value creation relative to cash burn. I got a lot of questions about it so here is an Excel spreadsheet for you to download and play with -- let me … Continue reading Fred Wilson’s “Return on Burn” (Excel Worksheet Attached)
Sounds obvious. So I am puzzled when I get pitches where the basic parameters of investment returns are not met. There are many different types of venture capital investors. You should know which type of investor you are talking to. So here's one real example from last month: We're selling an edge appliance for IoT … Continue reading Pitch Clinic: VC Investments Need Hyper-Growth (D’oh!) — Excel Worksheet Attached.
I know you have a great product. I wouldn't be talking to you otherwise. But I am not a customer. I am a potential investor. As the CEO, you have been juggling all sorts of crisis situations over the past year, and you have been at the forefront of selling, probably meeting with customers and … Continue reading Pitch Clinic: Sell Stock, not Product
Benchmarks are great to tell you where you are compared to others. In venture capital, there are three common problems with benchmarks: History, math, and ego. 1. Benchmarks are History Benchmarks are backward looking. Past performance is no guarantee of future results. Maybe market mechanics changed. Maybe the supply and demand of startup funding in … Continue reading The Pitfalls of Benchmarks.
[There are countless obvious lessons from Jocko's books and podcasts that apply to all people and all companies. Here are some insights that might be less obvious from the last #muster.] Some VCs talk about startups needing to be paranoid, with an obsessive attention to what is going on in the environment around them. I … Continue reading Jocko and Startups: Default Aggressive.
We've got this awesome team and we're doing <insert-cool-stuff-here>. None of <insert-public-companies-here> can do that. We're light years ahead of them! I love great teams. Which investor doesn't. But just because you have not heard of any group within <insert-public-companies-here> doesn't mean they can't do it. In fact, any pitch about a unique technical skill … Continue reading Pitch Clinic: “Noone else is doing it!”
Enterprise CTOs or CIOs often ask me about how IT will change in the future, about the "Disruption of Technology in 3-5 years". Most CTOs and CIOs realize that that is primarily a strategic question rather than a question about a certain vendor or technology. I usually explore the specific challenges together with the executive … Continue reading The Future of IT: The Next Five Years.