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This week I wrote about obsessive and competitive founders and how this forms the basis of what I look for when I invest. I had been thinking a lot about this recently because I’m often asked the question of “what I look for in an entrepreneur when I want to invest?” I had invested in myself for years.
Everyone seems to be in such a rush to get shacked up these days. In normal times investors will look for “traction&# before investing. Swing by their offices to make it easy for them to say yes and promise not to take up more than 30 minutes for the update (and stick to it). Investors are writing checks for dots.
I started in 2007 with a thesis that my primary investment decision would be about the team (70%) and only afterward about the market opportunity (30%). I was telling him that it was much easier when I started because there were fewer deals, life was less public and somehow the world seemed to be spinning more slowly.
Preparing for the game… If you have been following our recent insights, you’ll be up to speed knowing that professional investors negotiate tough terms, from provisions of control over asset acquisition, eventual sale of the company, future investments, forced co-sale when others attempt to sell their shares and more.
Seed investments are down by any measure (funds, deals, dollars) over the past 3 years in deals < $1 million AND in deals between $1–5 million. The reality is that as a result of two major trends the costs of starting a technology startup went down massively. The “A Round” of my startup in 1999 was $16.5 What gives?
We remain confident in the long-term trend that software enables and the value accrued to disruptive startups; we also recognized that in a strong market it is important to ring the cash register and this doesn’t come without a concentrated effort to do so. The answer is: not much.
But should you actually write one if you’re a startup, an industry figure (lawyer, banker) or VC? This is a post to help you figure out why you should write and what you should talk about. People often ask me why I started blogging. It really started simply enough. Struggling to come up with enough topics?
Some really great stuff in 2010 that aims to help startups around product, technology, business models, etc. 500 Hats , February 1, 2010 When to Use Facebook Connect – Twitter Oauth – Google Friend Connect for Authentication? 500 Hats , February 1, 2010 When to Use Facebook Connect – Twitter Oauth – Google Friend Connect for Authentication?
In my Twitter bio is says that I’m “ looking to invest in passionate entrepreneurs ,” which almost sounds like I was just looking for a cliché soundbite to describe myself. Running a startup is a grind. Great programmers are artists, for sure, but rock stars is about the last definition I’d choose.
I find it amusing when a journalist writes an article about a prominent startup (either privately held or preparing for an IPO) and decries that, “They’re not even profitable!” Exec Summary: Most companies (98+%) in the world (even tech startups) should be very profit focused. One of them is profitability.
This is a post I’ve been dying to write for 18 months. I invested in LA-based Gogii , one of the fastest growing, most exciting mobile social networking companies you’ve never heard of and maker of a product called textPlus. I only recently invested and I only got here through persistence. But I never gave up.
When the masses start all running one way without questioning “why?&# – and when it defies any logic I can figure out in my head – I call bullshit. They have marked-up paper gains propped up by an over excited venture capital market that has validated their investments. “ Question Authority.&#.
I was speaking recently to the team at NuOrder , an LA-based company we’re an investor in about “realism in startups” — an impromptu talk I have given to any of our portfolio companies who ask. During the Q&A I was asked about how I make investment decisions in early-stage businesses. I fall in love.”
It’s very common for startup companies to have COO’s. So I know I’m getting myself into a bit of trouble by writing this. But … Startups don’t need – shouldn’t have – COOs. I have this conversation with every startup that comes to see me and has a CEO & a COO.
Tracy DiNunzio isn’t your typical Silicon Valley startup founder. She did her first tech startup after the age of 30. And she didn’t start her company in Northern California. She leveraged herself and even sold many of her possessions to get started. She started her business from a personal need.
It’s not hard to find people willing to write the narrative that “venture capital is not an asset class” or “venture capital has performed terribly.” I hope to publish that deck and a full writeup in the next 10 days in partnership with Dan Primack at Fortune (if my writeup doesn’t suck, I guess ;-)).
2 preamble issues having read the comments on TC today: 1: I know that the prices of startup companies is much great in Silicon Valley than in smaller towns / less tech focused areas in the US and the US prices higher than many foreign markets. I said both in the article but felt compelled to provide a statement up front for the skimmers.
We all like to think of startups as “non hierarchic&# organizations and to some extent that should be true. I see two common mistakes in companies (not just in startups, in fact). By going on sales calls you pick up directly the feedback of what customers want and also what they’re telling you about competition.
Many MBA programs still cater too much to the needs of large, corporate management jobs or prepare students to enter big consulting companies or investments banks. Her post is short & well written so definitely worth a read if you’re a startup person and want to hear some sensible views on sales.
I recently sat down with Matt Coffin , the founder of LowerMyBills, which sold for $400 million but was very nearly a bankruptcy only a few years early, and talked “startups.&#. Matt is one of the most transparent, focused & honest startup guys you’ll meet. Or read the quick, informative summary below the image!
I was reading Danielle Morrill’s blog post today on whether one’s “ Startup Burn Rate is Normal. I love how transparently Danielle lives her startup (& encourages other to join in) because it provides much needed transparency to other startups. Let’s set up a framework. Gross Burn vs. Net Burn.
One of my favorite events last year was attending Startup Grind where I got to interview Clayton Christensen, author of The Innovator’s Dilemma. ” We talked about my influences as a younger person and what got me started in technology and entrepreneurship. And of course we talked about many of my views of building startups.
If you have been following our recent insights, you’ll be up to speed knowing that professional investors negotiate tough terms, from provisions of control over asset acquisition, eventual sale of the company, future investments, forced co-sale when others attempt to sell their shares and more.
When I first startedwriting this blog several years ago I had less followers than you have right now. But the realist in me knew I couldn’t write daily nor could I convince you to think to check out my blog with regularity. It’s like a Pachinko machine (yes, I had one in my house growing up). I should know.
When convertible debt first started being introduced as a “faster, cheaper way to get startups funded” they didn’t have pricing built into them. In fact, most early investor work hard to help their startups get to the next level so it makes no sense for the angel investor and founders to be at odds.
They often create the biggest tensions between investors who are investing at different stages in the business. Prorata investments rights given investors the right to invest in your future fund-raising rounds and maintain their ownership % in your company as your company grows and raises more capital.
It’s the first EIR that we’ve had in the years that I’ve been with the firm and I hope will be the start of our investment in this program. We’re excited to continue to grow our investment professional staff and will continue to do so over the course of 2013 & 2014 with our new fund.
It’s the key to growing a successful business and is a theme the Steve Blank plays up a lot. Be a mensch – the world is small than you think and bad karma will catch up to you “We’re in a very small community. You need to keep your relationships up.&#. Start early. I agree whole heartedly.
Brad wrote up his answer here – you should read it because it’s very instructive for how I believe communities ought to think about naming conventions. I recommend that you start by writing down the attributes you would want people to think about when they think about your brand. This is the list I would start with.
As a result I didn’t write my first venture capital check until March 2009 – exactly 5 years ago. At the time I pointed out: “If I had realized exits almost certainly it would be because I invested in a company that failed. “Ok, so this guy can write a blog and source deals but can he make any money?”
I’m over-paying for every check I write into the VC ecosystem and valuations are being pushed up to absurd levels and many of these valuations and companies won’t hold in the long term. On the one hand, you’re over paying for every investment and valuations aren’t rational. That used to be called A-round investing.
So I thought I’d write a post about how I drive my personal creativity. (A This applies equally to VCs, startups & big company executives. The key is channeling what you learn when you drive onto paper for retention purposes so you have to write it down soon afterward. So no whinging about what a long post this is!
This blog started from a series of conversations I found myself having over and over again with founders and eventually decided I should just startwriting them.It Kobe is famous for waking up crazy early every morning and practicing for longer and harder than nearly anybody else in the NBA. Think about Kobe Bryant.
One of the questions I’m most often asked as a VC is what I’m looking for in an investment. For me I’ve stated publicly that 70% of my investment decision is the team and most of this is skewed toward the founders. This post covers the first out of 10 that I’ll write about. Next on the checklist.
There are certain topics that even some of the smartest people I talk with who aren’t startup oriented can’t fully grok. It’s common cocktail party chatter to hear people confidently pronounce that some well known startup is sure to blow up because, “How could they succeed when they’re not even profitable!”
of all statistics are made up. I’m writing this post to make sure you’re all on that same playing field. Here’s how I learned my lesson: I started my life as a consultant. I had to read each report, synthesis it and then come up with our best estimate of the markets going forward. I say it deadpanned.
Upon graduation from Wharton, John and Kyle launched a startup based upon a simple, pedestrian product: a computer mouse shaped like the head of a golf driver. However, a number of them wanted to vicariously experience the startup world through John and Kyle''s venture. It''s gonna highlight our emotions, our ups and our downs.
Francisco Dao came up with the idea of letting 10 companies that weren’t selected for Twiistup to do a presentation the night before to a group of people and let the audience pick one company to win the final slot at Twiistup. So I thought I’d write a piece on how to not suck when you give a presentation.
Shots on Goal Being great as a startup technology investor of course requires a lot of things to come together: You need to have strong insights into where technology markets are heading and where value in the future will be created and sustained You need be perfect with your market timing. On Funding?—?Shots
Lower costs to start a business (95% reduction), many more companies created & funded by angels / seed. Limited Partners or LPs (the people who invest into VC funds) have taken notice as 2014 is by all accounts the busiest year for LPs since the Great Recession began. ” Stated simply – if you seed funded Uber at $4.5m
I only say that because after years as a VC I can always tell when my peer group invested in something because “it seemed like it would make money” versus when they invested out of passion. I really want to start my journeys only with people with whom I want to work closely with for the next 5-7 years or more.
At the big consulting firms, investment banks and established large technology companies we’re taught to produce long reports, make sure that every document is perfect quality and that every possible bit of diligence has been done. That doesn’t work in a startup. The startup entrepreneur knows that they’re going to be wrong often.
One of the hardest decisions entrepreneurs make when they start a company and raise outside capital is figuring out what an acceptable “burn rate” is. That is, how much should your company be willing to lose in cash every month as you make investments in staff and equipment that funds technology, sales, marketing and management.
There is a battle between entrepreneurs who try to change the world and solve a meaningful problem and those who write take-down pieces with no apparent personal benefit other than attention. Even bigger is the desire to stick one’s middle finger up at all of the people who doubted you all along. ” **. We checked safety.
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