Understanding How Dilution Affects You at a Startup
Dilution. Or as industry insiders call it, “taking a haircut.” Everybody knows that when you raise money at a startup your ownership percentage of the company goes down. The goal is to have the value of the startup go up by enough that you own a smaller percentage of a much larger business and therefore [...]
Working with Friends
Last week I wrote about the value of repeat relationships in the venture capital and private equity business. I used the example of a portfolio company that recently raised capital from a firm we have worked with on a repeat-basis. I intentionally left out the investor’s name as well as the companies knowing that this [...]
Stock Market Drops. Then It Rallies. What Happens Next for Funding?
Venture Capitalists typically have partners’ meetings on Mondays. Why is that? Who knows. But probably because as a group we travel a lot. So the industry formed around a day of the week when all partners could avoid having company board meetings or traveling. Yesterday was a Monday. And not a pleasant one. Rewind. When [...]
The Coming Brick Wall in Venture Capital & Why This is Good for US Innovation
This is the final part of a 3-part series on the major changes in the structure of the software & the venture capital industries. The series started here if you want to read from the start. Or the Cliff Note’s version: Open Source & Cloud Computing (led by Amazon) drove down tech startup costs [...]
Evernote Celebrates Birthday by Joining the Billion Dollar Club (Really?)
Evernote has recently celebrated their third birthday. I also recently had my 21st birthday – it feels good to be able to legally grab a drink finally. (Hey, if Evernote can lie about their age, so can I…). Joke apart, I have no idea why a company would pretend to be half as young as [...]
Should a Startup Have a COO?
It’s rare I can dust off a 6-year old article, find it still relevant and repost it without any changes. But that’s what happened this morning, I felt provoked by this VentureBeat title: Even start-ups need a COO – wanted to respond, than I had that “I’ve already said this” feeling and realized I would [...]
The Art of Riding the Bubble
People are increasingly asking whether there is a Bubble underway in the tech business. The answer is that by the time you know there is a Bubble it’s probably too late to do anything about it. But if all you’re doing is asking whether there is a Bubble, the Bubble is probably not here, yet. [...]
Silicon Valley > Boston (The Data)
I love Boston. I lived there for five of the best years of my life, when I was working at D. E. Shaw & Co., and then when I attended Harvard Business School. If anyone asks, I always tell them, “if Boston had the same weather and career opportunities for me as Silicon Valley, I’d [...]
8 Questions to Help Decide if You Should be Raising Money Now
A year ago I blogged about one of my most common mantras that applies to sales, biz dev & fund raising alike: “Time is the Enemy of all Deals.” When times are really good for fund raising many teams delay to maximize their valuation. Sometimes this pays off, other times it doesn’t. So how should [...]
The Top 30 Most Respected Venture Capitalists (infographic)
A guide for Entrepreneurs There is a lot of content created by the Venture Capital community that has helped countless entrepreneurs. In fact, one of my favorites is How Andreessen Horowitz Evaluates CEOs. I recently stumbled upon the article again and it reminded me of an article I’ve been meaning to write for my entrepreneurial [...]
Why Did I Invest in Pose?
What a sweet feeling it was last week to see the launch of the photo sharing site Pose, whose application targets shoppers of apparel. If you don’t know it and own an iPhone (soon Android) please check it out. What I’d like to do is tell you the story of how the investment came to [...]
Going to Raise VC? Here’s a Primer on Process, People, Deck
If you want a very quick primer on all the stuff nobody ever tells you about raising venture capital check out this video where Mark Jeffrey & I break it down on This Week in VC. A summary of what we discussed is below: Not 100% in order of the video, but close. All of [...]
Why it’s Critical That you Reference Check Your VC
I was recently speaking with some founders about their fund raising process. They had received a term sheet from a VC and were wondering whether to work with this firm. I personally had three separate data points from entrepreneurs who took money from the firm that said “never again.” I really try to stay out [...]
Invest in Lines, not Dots
Everyone seems to be in such a rush to get shacked up these days. In normal times investors will look for “traction” before investing. We want to make sure we’re in love. This sometimes frustrates entrepreneurs who just want to “get back to running the business.” But if you understand it you’ll see that it [...]
An Entrepreneur’s Growth Equity Conundrum: Should I sell stock or sell growth?
Two times in the past year, I’ve been close to making an investment in two separate micro-cap growth equity opportunities only to have the opportunity go sideways deep into the process. The two businesses share a lot in common; they are similar in size, profitability, and growth prospects. Both are capital-intensive; the first being asset [...]
