TMT Exits — No End in Sight?

In May, Neeraj Agrawal and Logan Bartlett from Battery Ventures published a great presentation on the 2019 Software market. The Telecoms, Media, and Technology Sector ("TMT") is a bit bigger. Over the past 10 years TMT exit volume has been steadily rising. Until 2019, there was no end in sight. VC-backed TMT Exit Volume Globally … Continue reading TMT Exits — No End in Sight?

Board Questions to ask about Stock Options, NSOs, ISOs, Restricted Stock, Restricted Stock Units (RSUs).

[Earlier I wrote about the different vehicles] You're sitting on a board and the CEO presents some proposed grants. Motion to approve - second - all in favor - ay. Here's what you should have asked before the board meeting. A. Economics What's the vesting schedule? What are these options worth right now? What do … Continue reading Board Questions to ask about Stock Options, NSOs, ISOs, Restricted Stock, Restricted Stock Units (RSUs).

Leading Unicorn VC Firms and The Long Tail

We often get the question about "Leading Unicorn Venture Capital Firms". And emerging fund managers are sometimes taken aback when we are unfazed about their two unicorns in their portfolio and continue our due diligence. Business Insider just published an article about early-stage investors with billion-dollar outcomes. [DISCLAIMER BELOW] [EDIT 5/28/2019, 08:38 PDT -- I … Continue reading Leading Unicorn VC Firms and The Long Tail

Volume and Choice drive down Startup SaaS M&A Multiples.

SEG: 1Q19 SaaS M&A Update, via http://softwareequity.com/research/ SaaS multiples of venture-backed SaaS Startups are driven down by volume and choice. Tom Tunguz has written a lot about SaaS multiples, specifically about Where are SaaS Companies Priced After the 2018 Correction. We are getting a lot of inquiries from VCs, entrepreneurs, and LPs alike about pricing. … Continue reading Volume and Choice drive down Startup SaaS M&A Multiples.

Five Areas of Startup Equity Awards Boards Should Discuss.

There are enough primers on the Internet. This is not a primer. But take it as a discussion guideline with your board, your lawyers, your executives. Types of Equity Awards Options An option is a contract between a startup and an "optionee" (mostly employees, but could be contractors or board members) that provide a right … Continue reading Five Areas of Startup Equity Awards Boards Should Discuss.

VC Funds: $100 billion of dry powder in the Bay Area.

I was using Preqin to understand office locations of firms (institutional, family offices, and corporates) that are doing direct venture capital investments and are still seeking actively for new investments (collectively called "VC firms" below). Tobias Lam from the Preqin NYC office was kind enough to pull some back-end data on office locations for firms … Continue reading VC Funds: $100 billion of dry powder in the Bay Area.

VC Funds: Six months to first close on 40-60% of final close size.

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.

VC Funds: First-Time Funds take a Median of 12+ Months to Raise.

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.

VC Funds: A Median of 17 Months in Market to Final Close.

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.

Fred Wilson’s “Return on Burn” (Excel Worksheet Attached)

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)