Conversion Finance IRR 
Both Sides of the Table
SEPTEMBER 15, 2022
This happens slowly because while public markets trade daily and prices then adjust instantly, private markets don’t get reset until follow-on financing rounds happen which can take 6–24 months. IRRs work really well in a 12-year bull market but VCs have to make money in good markets and bad. It’s just math. And we’re patient.
David Teten
JANUARY 19, 2021
Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. As a result, unfounded hockey-stick graphs and unicorn promises give way to financial fluency, realistic expectations, frank conversations about what a business can credibly achieve, and transparency. . Flexible VC: Compensation-based.
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Tim Keane
JANUARY 12, 2010
For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing. Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors. (If you plug in an IRR of 58.5%
Both Sides of the Table
MAY 24, 2021
This “overnight success” was first financed in 2004. as measured by MOIC, TVPI and IRR and by sources that don’t reveal the underlying data and who themselves have to rely on incomplete datasets. This is true in consumer but it’s also true in enterprise software. Imagine if, say, Autodesk had purchased it in 2009 for $100 million?
View from Seed
JULY 15, 2020
One topic of conversation among VC’s over the last few months is how their portfolios are faring during the Covid pandemic. Many of these companies are probably valued at their last financing round, which probably occurred in a very frothy funding environment. Reshuffling the deck.
This is going to be BIG.
DECEMBER 28, 2013
Why give more airtime to someone whose peak of influence, and perhaps success, is clearly behind him--especially to talk about topics where he clearly isn''t adding value to the conversation. My total valuation multiple across that span is nearly 4x and the return rate is up over 110% IRR. That''s less than 10%. That''s 25%.
Occam's Razor
OCTOBER 14, 2014
Outcomes of the conversations with your Finance team and Sr. Leaders (company is leaving China, our IPO is next week, 1,800 new stores are being opened in 180 days, our new IRR is 8%). Conversion rate is one of those metrics that I strongly encourage you only create benchmarks for from your own data. Don't do it.
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