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) . 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.
The number of new IT startups with headquarters in the U.S. is rapidly declining. There are less and less IT startups founded every year since 2013. I was looking for something else at Pitchbook but stumbled over this massive decline: Startups founded by year with primary focus on Information Technology ("IT") and headquarter in the … Continue reading Rapid Decline of New U.S.-based IT Startups
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.
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?
[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
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.