VC 2006-11: $136 Billion In, $146 Billion Out
There’s a lot of talk recently about a Kaufmann Foundation report on the venture capital industry that states: Over the past decade, public stock markets have outperformed the average venture capital fund and for 15 years, VC funds have failed to return to investors the significant amounts of cash invested, despite high-profile successes, including Google, [...]
The Controversial First Role to Hire After Your A Round
I’ve thought a lot about team construction of early stage companies. I was once asked on Quora what my idea startup team would be. I wrote the following: “I like to invest at the seed or A round. My ideal team is simple: Assuming 6 people 1. 5 engineers 2. 1 CEO who doubles as [...]
The State of Venture Capital and the Internet
Early today I gave a keynote at the VCJ Venture Alpha conference here in San Francisco. I was asked to speak about the topic of “what is going on in the venture capital world and what is the next big thing after social networking?” // Future of VC Internet – Tough topic, but what the heck? Next [...]
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 [...]
Cloudburst Expected on Wall Street | Xignite Raises $10M
When not moonlighting at Chaotic Flow and Cloud Ave, I’ve been toiling away at Xignite for the better part of the last three years, and I’m happy to announce that the company has successfully closed $10 million in B round funding. The round was led by of Starvest Partners‘ Deborah Farrington who is #77 on [...]
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 [...]
Talk With Everyone
Reading Mark Suster‘s excellent post, “Why You Need To Take 50 Coffee Meetings” brought to mind one of my personal corollaries: Talk with everyone. I’m a relatively small-time investor. It’s a documented fact, and I don’t try to hide it. But that means that I need to deliver value beyond money if I’m going to [...]
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 [...]
Changes in Software & Venture Capital – Part 2 of 3
Yesterday I wrote Part 1 of the series on the changes to the software industry over the past decade that has led to changes in the venture capital industry itself. If you don’t want to read that post, the summary is: Open source computing drove computing costs down 90%, which spurred innovation in technology [...]
Understanding Changes in the Software & Venture Capital Industries
In this three-part series I will explore the ways that the Venture Capital industry has changed over the past 5 years that I would argue are a direct result of changes in the software industry, not the other way around. Specifically, Amazon has changed our entire industry in profound ways often not attributed strongly enough [...]
10 Marketing Lessons for Early-Stage Tech Startups
I made every textbook mistake at my first startup, which is why I believe I was much more effective at my second one. I have adopted the motto “good judgment comes from experience, but experience comes from bad judgment.“ We need to learn from doing, by trial-and-error. If I can help you avoid some [...]
What Should You Do with Your Crappy Little Services Business?
There’s a line of thinking in Silicon Valley that you should build product businesses rather than services businesses. This thinking is largely driven by the venture capital industry (and subsequently Wall Street) who are in search of high margin, highly scalable businesses. It’s nearly impossible to get a services company financed by VCs. You’re small fish.
So, Mr. Bootstrap took venture funding, huh?
Longtime readers of this blog will know that I’m a big fan of bootstrapping. Instead of putting together a pretty pitch deck and hitting Sand Hill Road (or 300 W. Sixth Street, as the case may be) I’ve long preferred the model where you open up the IDE, build something valuable, find a few people [...]
Silicon Valley Money and Idea Network
Amazing companies, great founders, powerful investors and driven CEOs – all in one (in my case two) influence maps. Definitely take a close look and draw your own conclusions!
