What Entrepreneurs Should Learn From WhatsApp
Facebook’s acquisition of WhatsApp for $19 billion has dominated all news in Silicon Valley for the past 48 hours. Yesterday, I was at a urinal, and a group of people asked me what I thought. Most of the discussion seems to be around whether Mark Zuckerberg was crazy to pay so much for a relatively […]
The reasonable startup valuation formula
It seems like it’s unfashionable these days for investors to worry about startup valuations. In my opinion, that kind of thinking is likely to lead to disaster for both investors and startups. Far too many people make the mistake of focusing on relative valuation. “This deal is a bargain in comparison to the other deals […]
If Tumblr is worth $1.1 Billion, is Pinterest worth $19 Billion
My friend Adam Rifkin, who runs the awesome PandaWhale (where I get a ton of my news), recently wrote about the Tumblr acquisition for AllThingsD. It’s a smart and well-reasoned essay, which is well worth reading. His basic argument is that Tumble is valuable because it is a massive interest graph: “Tumblr is one of […]
Don’t Try to “Pull an Instagram.” Here’s Why …
Instagram. It’s understandably on everybody’s mind these days. Clichés abound about, “You know what would be cool? …” I’ll write soon on my views of why I believe Instagram took off as a social network and what I think comes next. Instagram happens to be one of the few social networks I regularly use along […]
The Lesson of Dropbox: Usage = Value
Word on the street is that Dropbox is about to raise a major round of financing at a $5 billion+ valuation. While some will cry “Bubble!”, I think there’s a different lesson we can learn: Usage = Value. Let’s face it–Dropbox isn’t the most complicated business or technology. It’s a relatively simple storage app that […]
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. […]
Please let there be another internet bubble because this time I won’t screw it up
Internet Bubble 2.0 is firmly entrenched, with stupid valuations of companies that have never turned a profit. For those that remember the halcyon days of 1998 through 2000 where every half-baked idea would get stupid amounts of funding, it is interesting to see the lessons from then not applied to today. At this point I […]
You set the price; I’ll set the terms
Bill Daniels, a cable tycoon, was a consummate deal maker. I never had the honor of meeting Bill, but his reputation in the industry has stood the test of time as have some quotes that have been attributed to him. My Partners, some of whom had the great pleasure of knowing and doing business with Bill, are […]
The Great VC Ice Age is Thawing (for now) – Part 1 of 3
When venture capitalists scale back investing activities it can be very swift and leave many companies that are in the process of fund raising hung out to dry. Just ask anybody who was trying to close funding the fateful week of September 11, 2001 or even March 2000. I would argue that the shut-down of […]
Who Will Twitter Acquire With Their Fresh $100 Million?
Last week the NY Times reported that Twitter has raised about $100 million of new funding, making the company’s value to be $1 billion. Just to put things in perspective, they also provide an example: For context, that is almost double the market capitalization of Domino’s Pizza, which has 10,500 employees and had $1.4 billion […]
Twitter Valued at $1B? Peanuts! 37Signals Worth $100B!
37signals is now a $100 billion dollar company, according to a group of investors who have agreed to purchase 0.000000001% of the company in exchange for $1. Founder Jason Fried informed his employees about the new deal at a recent company-wide meeting. The financing round was led by Yardstick Capital and Institutionalized Venture Partners. In […]
When Expectations Converge
Image via Wikipedia Yesterday, I posted on a VentureBeat piece covering the correlation between exit market conditions and venture capital company-building behaviour and philosophy; or lack thereof. The piece called for a back-to basics approach to venture capital, where investors are focused true partnering with entrepreneurs to build fundamental value over a traditional investment horizon […]
The Dreaded Question of Valuation
This is part of my ongoing series, “Pitching a VC” – the entire outline is here Whenever I sit on panels and discuss the topic of fund raising the topic of how to handle the discussion of valuation (e.g. how much you’re worth) always comes up. I have very fixed views on this topic although […]
