Every call I get that question: "What about AI?". Yes, what about it? If you have any summer interns they'll probably make some proposals how to automatically source and select investment winners with AI. With investors -- LPs and GPs alike! -- I rather like to talk about "AI Infrastructure". Because most of them have … Continue reading AI Infrastructure for Investors – How to Start
In my post Public Equities: 2022 Outlook, I wrote: Time is Money. Don’t Wait. I got a lot of flak for that. How could I recommend investing when I don't know what the future brings?! Wouldn't that really depend on the risk target of an investor? True. That's why I wrote about what I am … Continue reading Followup: Don’t Sit on the Sidelines!
For some reason, just because I'm German, everyone seems to think that I know the impact of the war in Ukraine onto capital markets. I don't. Well, I didn't. Here we go: Bifurcation of economies; return of regional networks and economies; strong US dollar; bifurcation of energy markets; increased military investments
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
Statistically, startups mostly fail. We love to think of ourselves as great investors. But Venture Capital fundamentals still didn't change: Fund returns are driven by outliers, and returns are concentrated in few firms. All VCs are constantly evolving and refining their thinking, processes, conviction. That's why we write long investment memos: Not because be need … Continue reading Venture Capital: Preparing for Failure.
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.
What does your customer want to buy? Are they using your product as a stepping stone or enabler to a much bigger transformation? Or are you part of a larger product and fit the puzzle? Are you selling a product or a platform? I listened into sales conversations at one of our startups. The product … Continue reading Sales Strategy — Selling a Product Versus Selling a Platform.
