Revenue Multiples And Growth. 20 years on - Hazard Lights. This December marks 20 years since I made my first venture investment.
I wrote about the specifics of that company here, but instead of reliving that one company, here in another bout of nostalgia I am going to reflect on what remains the same and what has changed in my 20 years as a venture capitalist. In 2014 the US VC industry is on a pace to invest over $40B in some 4,000 companies and venture firms across the industry will likely raise over $25B. This compares to 1994 when the industry invested $4.1B in just over 1,200 companies and raised $7.6B. Further, the innovation is far far more global with markets such as China and India raising and investing significant amounts of capital, up from virtually nothing 20 years ago, while markets where there was some level of VC in 1994, such as Europe and Israel, have also seen tremendous growth and expansion.
Ten Good Reasons to Take Venture Capital Money. Following up on my post from Monday that rang like "reasons not to take VC money" here are some reasons you should: 1) You really like the investor and believe they can add more value than you give up in equity. 2) You are growing, and if you don't raise, you won't be able to build the infrastructure required not to come apart at the seams. 3) You have the team in place or identified to build the product, you've done your homework by talking to customers that it is, in fact, the right product, and you're the best person to lead the effort, but you can't fund the build of the product yourself.
The three skills of a great PM – TL;DR since this got long: good and great PMs differentiate themselves by focusing on improving the rate of various aspects in product development.
Christina Cacioppo. Ten Realities of Taking Venture Capital Money. If you take venture capital money... 1) You increase the chances that you may not be CEO of your own company one day--and that also might be the best thing for its long term success. 2) You are signing up to sell the company one day--to another company or to the public market, but definitely to someone. 3) You will almost certainly take more venture capital money after that.
If You Don’t Respect Your Customers You Won’t Be Successful. I spend a lot of time with startups and thus hear many companies talk about their approach to sales and their interactions with customers.
From these meetings you can really tell the leaders that care deeply about their customers and those the look down on them. Given customers & sales are the lifeblood of any organization you’d imagine everybody would respect their customers. You’d be very wrong. I was thinking about it this week through some snippets of recent experiences. Starting with a positive. The Fatal Pinch. December 2014 Many startups go through a point a few months before they die where although they have a significant amount of money in the bank, they're also losing a lot each month, and revenue growth is either nonexistent or mediocre.
The company has, say, 6 months of runway. The Venture Capitalist Struggle — Bonanzinga @ Entrepreneurship at Work (Euro... In the startup community, we often hear and read a lot about the entrepreneurial struggle — the daily difficulties and challenges facing those building companies.
Rarely, however, do we hear about the other side of the equation — the investor struggle. Although it may appear that the life of an investor is a charmed one filled with great travel, luxury hotel and amazing conferences that couldn’t be farther from the truth. When you ask any VC how it is going you always get the same answer: amazing. Undercorns: Making sense of the current venture climate. Once upon a time, fundraising was a long, arduous task.
CEOs and their management teams would diligently prepare for a process that could take 6 months and more from start to finish. In a sure sign of the times, the time it takes to raise capital these days is getting shorter and shorter. In some cases companies are getting funding commitments *before* they even begin a fundraising process. The Grind vs The Pivot. Everyone knows what a pivot is.
You launch something, it fails to get product market fit, so you change direction and launch something different. There are many examples of successful pivots. Flickr, Twitter, Slack, and Kik all came out of pivots. August 23, 2004 - Google is Probably Worth About $24 a Share. August 23, 2004 Google is Probably Worth About $24 a Share (over and above IPO proceeds) John P.
Hussman, Ph.D. All rights reserved and actively enforced. [Post-note: In response to questions about the calculations below, the figures in this article refer to the expected discounted value of operating cash flows that will be delivered to investors by the business. That is, the figures assume a 100% purchase of the operating assets. Capital And Success. In a post early last week I asserted this: Access to capital and raising a boatload of it is rarely the thing that wins the market. And then later in the week I saw this tweet. Should You Sell Your Company? Sittin’ up drunk shuffling thoughtsGot paper but I’m lostLosing focus what a n#%$a still hustin’ for? My seed is straight the family’s settledIdle time get the man in trouble—Nas, Suicide Bounce One of the most difficult decisions that a CEO ever makes is whether or not to sell her company. 5 mistakes we all make with product feedback. It rarely makes sense to take feedback from all users and it never makes sense to get it all at once.
At the outset of a new project, or especially if you’ve recently taken over a product, it’s tempting to survey all your users to appraise where things are. It’s usually a mistake. In fact there are five common mistakes that we see over and over. Intercom makes getting feedback extremely easy, and as a result, it’s easy to become a little trigger happy with the feedback requests.
Here’s five quick fixes for product feedback: The Founder’s Guide To Selling Your Company. For most founders, selling a company is a life changing event that they have had no training for. At Y Combinator, one big thing we help our startups with is navigating questions around the acquisition process. Originally, I wrote this guide for YC startups outlining what I’ve learned in my last ten years as an entrepreneur about selling startups.
If you are going through an acquisition, hopefully this will be useful to you. Make sure your company never runs out of cashStartupCFO. Managing the Prophets of Rage. Make a Plan That You Can Beat. Reducing friction in VC fundraising — Growth Hacking, Marketing and Venture Capital. The Thin Skin of the Venture Capital Market. Averaging In And Averaging Out. BIJAN SABET. With venture backed startups, its likely the company will need to raise additional capital after a seed or Series A financing. Atomico. Publishers and the Smiling Curve. Peak Google. Startupclass.samaltman.com/courses/lec09/ Not All Startup and Venture Experience is Equal #getoffmylawn.
I probably do some kind of speaking event at least every other week. When It Comes to Market Leadership, Be the Gorilla. Determining Valuation Multiples. A Few Non-Obvious Things I Learned as a New VC. How Facebook and Google Now Dominate Media Distribution. Inertia. Career Paths in Startups With Limited Visibility. Why You Should Find Product-Market Fit Before Sniffing Around For Venture Money. How many ecosystems? How Jean Tirole’s Work Helps Explain the Internet Economy.
“A standard protocol for machines to negotiate bitcoin payments for resources” One paper by Nobel Prize winner Jean Tirole that every internet user should know. The Incredible Unbundling of Marketing. How to predict technology flops - Inside Intercom. Seed Round Pricing (Actual data warning!) Travel planning software: The most common bad startup idea.
Five ways to build a $100 million business. After Ringing the IPO Bell. Before You Plan Your Product Roadmap - Inside Intercom. Before the Startup. Lecture 3 - How to Start a Startup. Here is How to Make Sense of Conflicting Startup Advice. Sam Altman – Lecture 2: Ideas, Products, Teams and Execution Part II. The Long Fall. Sam Altman – How to Start a Startup Lecture 1. Startup Risk and Valuation – Correlated Causation. San Francisco’s (In)Visible Class War. The Metrics Required for Raising a Series A Round. Swatch inventor: Swiss watch industry missed the smartwatch boat. Bill Gurley: Silicon Valley Is Taking On Too Much Risk. The State Of Investments In Europe: A Review Of The Last 5 Years. Winter Is (Probably) Coming (Soon) Thoughts on Hiring: Working for TBH. Requests for Startups.
A Collection of Uncommon Points of View on Startups. Peter Thiel, technology entrepreneur and investor. AMA : IAmA. iPhone 6 and Android value. Startups Are NOT Glamorous – They Run on Fear. Failing Better. How Andreessen Horowitz Is Disrupting Silicon Valley. Why Amazon Has No Profits (And Why It Works) Annual Planning is Killing Your Growth – Try This Plan Instead. OpenTable - Opportunity – Correlated Causation. Legacy Media: The Lost Decade In Six Charts. Three Years Later: Tim Cook’s Apple. August Capital GP and Early Skype Investor on "What a VC is Really Thinking During Your Pitch" Are Board Meetings a Waste of Time At The Seed Stage? What Is A "Good" VC? The Unbundling of Scale. On Getting An Outside Lead. Why the Structural Changes to the VC Industry Matter. The Best Advice I've Ever Received.
Mistakes You Should Never Make. The Pro-Rata Opportunity. The Changing Structure of the VC Industry. Here’s Why a Booming Tech Market May Fool You into Thinking You’re Successful. Musings — The Power of Patience. A Dozen Things I’ve Learned from Fred Wilson. The Characteristics of a Billion Dollar Hardware Startup. Apps: Shrapnel v. Bloatware. Why Venture Capital is So Much More Compelling Now. Tech IPOs, a Good Investment or Not? Economic Power in the Age of Abundance.
The Disruption Debate is Focused on the Wrong Ideas. A Dozen Things I’ve Learned from Vinod Khosla. How Apple TV Might Disrupt Microsoft and Sony. If SaaS Products Sell Themselves, Why Do We Need Sales? Ballmer's bid for the Clippers: Investment, Trade or Expensive toy?