[This is one of the first 'Tactical Notes' - short-format observations that I jotted down some time ago, where I feel that this snippet is enough and no long format essay is necessary] Venture Capital today looks like Private Equity a decade ago. It is entering its own private equity era. Product alone is no … Continue reading Tactical Notes: Venture’s Distribution Reckoning
When we due diligence emerging managers, not presenting an investible financial product is the fastest way to come to a "no". It's true that you have to make "good investments" (whatever that means), but unless you are only investing your own money, you need to offer a financial product that attracts LPs. HNIs and family … Continue reading Venture Capital is a Financial Product
[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).
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
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.
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.
Venture-backed startups are staying private longer (no news here). But how much longer? As venture capital investors, we are trying to learn from past mistakes and successes. And we need to calibrate for different market environments. A recent observation is that the sideways exits below $100M in deal value are vanishing. Startups keep going until … Continue reading Go Long. And Go Big or Go Home.
One of my favorite analysts at 451 Research is Brenon Daly. One of his remarks at the recent RSA 2018 Analyst Breakfast caught everyone's attention: We see about 120 to 140 infosec transactions every year in our Tech M&A Database. There are about 2,000 infosec vendors we are tracking, and venture capital is adding more … Continue reading More Than A Decade of Supply for Infosec M&A Transactions
In Part I I've written about perception of great VCs, and in Part II I showed some data on actual meaningful exits with outcomes greater than $500m over the past ten years. Meaningful exits often take 9 to 11 years to materialize (e.g. FireEye was founded in February 2004 with IPO in September 2013; Forescout … Continue reading Most Successful Cybersecurity VCs: The Top Firms. (Part III)
Yesterday I published a quick survey what CEOs, CISOs, and cybersecurity professionals think are the most successful VCs. The answers were somewhat surprising: There was no clear leader, and very few picked VCs that had outstanding exits over the past 15 years. So why do so many supposedly great cybersecurity VCs -- the "most successful", … Continue reading Most Successful Cybersecurity VCs: The Last 15 Years. (Part II)
