Opinions and Thoughts on Venture Capital, Investing, and Startups
I had a consulting career more than a decade ago and thought the typical project triangle was well known (google it). That has an implication for startups, and it is an important reason why VCs often ask about the "10x-factor": Can you do something 10x faster? Can you do it 10x cheaper? Can you create … Continue reading Wallet-Share, Time-Share, People-Share
When I came out of my own startup in 2002, I decided to focus my efforts on public land preservation and low-income housing. I signed a bunch of different (financial) products, and quite frankly didn't know much about US products, closed-end funds, and tax implications. When I had to restructure our family trust, I had … Continue reading $125M Evergreen Fund
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
In my dealflow I are often see great features, great products, and great companies. But I can only invest in great deals. Passing on your deal is not a judgement on your product, nor on your company, nor on your character. This isn't personal. Great Features. 10x Speed at 1/10th of current cost. Because when … Continue reading Great Product – Wrong Deal.
It is confusing for me why people are talking about "we're using AI to do <XYZ>". AI is a system, not a technology. You need to operate with the system. You cannot replace a specific technology or platform with AI if you don't replace all the systems as well. AI is a system of: People … Continue reading AI is a System, not a Technology.
Angel, seed, and early-stage venture capital investments are getting more and more expensive over the last 10 years. Investors write larger checks but don't get more ownership at the same rate. Last Monday, Pitchbook released their 1H 2019 Valuation Report (data as of 06/30/2019). The report has interesting charts, such as: Two charts from PitchBook's … Continue reading Early-stage Ownership is Getting More Expensive for Angels, VCs
The number of new early-stage VC funds with a focus on US-based pre-seed, seed, and early-stage startups grew from 163 (vintage 2014) to 490 (vintage 2019) [1]. As I wrote two weeks ago in "Rapid Decline of New U.S.-based IT Startups", the number of newly founded US startups in information technology declined from 5,856 (2014) … Continue reading US: More Early-Stage VC Funds are Targeting Fewer Startups
"Every A-round is $10M nowadays. That's the new norm. There is too much money in the market." I think I carelessly quipped something along these lines in the past three weeks. And I was wrong. I had fallen into the average-bias of VC-world, into false signaling of few outliers. As I wrote earlier (and so … Continue reading Massive Early-Stage Funding — I Was Wrong.
Fred Wilson has written about Un-SAFE notes. In a nutshell: they're not less expensive, and they hide some dilution problems when stacked. Because that's not always obvious, here is an Excel Worksheet to play around with. >> Download the Excel Worksheet. << The worksheet uses some circular references, so go to File > Options > … Continue reading SAFE Notes – Excel Worksheet Attached
Dave Kellogg is an outstanding leader and thinker -- go and follow his blog posts if you're not already doing so. He has a lot of good advice on planning and spending after getting funding ("post-funding"). Two of my portfolio companies went through the pleasure of raising a new round of financing last month. There … Continue reading Post-Funding: Trigger Spend on Milestones, not Timeline.