View from Seed

DECEMBER 11, 2019

Yes, there are intermittent points of feedback along the way, like valuation marks from subsequent rounds of financing. Venture is a field with a power-law distribution of outcomes. The median average investment time period to liquidity for a venture investment is currently 6.5-7.5 VC performance signal-to-noise-ratio is low.

Venture Capital 204

Venture Capital Cap Table Partner LP 204

VC Adventure

AUGUST 13, 2014

The data I site below is from Foundry LP StepStone. And more importantly the data were financing level, not company level. This analysis is on a company basis, not a financing basis (the chart is labeled “Deal” but in this case that means company, not round). Quick update here.

LP 99

LP Portfolio Distribution Finance 99

VC Adventure

AUGUST 13, 2014

The data I site below is from Foundry LP StepStone. And more importantly the data were financing level, not company level. This analysis is on a company basis, not a financing basis (the chart is labeled “Deal” but in this case that means company, not round). Quick update here.

LP 60

LP Portfolio Distribution Finance 60

ithacaVC

DECEMBER 14, 2011

Specifically, “too much” liquidation preference (I will use “LP” for liquidation preference). As most of you probably know, LP is one of the fundamental economic attributes of preferred stock that preferred shareholders enjoy. Series B round = $5mm and the Series B preferred stock is participating with a 2x LP.

Liquidation Preference 49

Liquidation Preference LP Preferred Stock Liquidity Event 49

This is going to be BIG.

MARCH 3, 2019

It’s just a model of the share price of a company going up and to the right smoothly until it exits for $300mm, and the outcomes for the shares purchased in each round of financing. This is the data of what your investment dollar distribution looks like if you’re doing the pro-rata of each of these rounds. How much do they hold back?

Portfolio 110

Portfolio Burn Rate LP Distribution 110

Professor VC

DECEMBER 8, 2015

Luckily, Google was one of the 150 and did ultimately return the fund assuming the LP was smart enough to hold the stock after distribution. I originally got to thinking about this when I received a 485 page information statement on a previously announced merger between Clean Power Finance and Kilowatt Financial.

Merger 28

Merger LP IPO Redemption 28

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. By the first quarter of 2016, the late-stage financing market had changed materially. Investors were becoming nervous and were no longer willing to underwrite new Unicorn-level financings at the drop of a hat. This is uncharted territory.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Haystack

JULY 20, 2018

Will the next company to raise $100M in financing just poach from decent seed-stage companies and pay triple the amount to lock up talent? Will folks be able to buy a house and raise their families here? Will the Bay Area’s cost structure compress the precious runway these newco’s have? These questions have been rattling around my brain.

San Francisco 116

San Francisco Silicon Valley Seattle Venture Capital 116

Both Sides of the Table

JUNE 29, 2011

I believe some VCs have entered the early-stage market as simply an option on future financing rounds. The LP Community Hasn’t Yet Caught Up. As I’ve started to get to know the other side of the VC industry lately (the people who invest in VC funds or “LPs&# ) one thing has occurred to me.

Venture Capital 296

Venture Capital Software LP Early Stage 296

Austin Startup

JUNE 26, 2019

By the by, women donors, I recommend diversifying some of your capital distributions to reap that ROI to keep doing good… (+ this is a whole ‘nother blog post…) Undeterred. Do you want someone already making $12–17/hour watching your kid to make less (so a LP can make their returns…)? We boot-strapped some more. We side-hustled.

Silicon Valley 54

Silicon Valley Startup B2C Sweat Equity 54

Start Up Blog

APRIL 29, 2013

An era defined and dominated by the few who could afford the factories, the media and the distribution systems. While non bank business financing is currently miniscule by comparison, the numbers from kickstarter.com tell us something is brewing. The top down era of one size fits all. And now it is over.

Uruguay 123

Uruguay Technical Review Vertical Las Vegas 123

Startup Lessons Learned

MAY 4, 2021

Can institutions be totally distributed or should they be rooted and loyal to a certain community or geography? And of course, I wasn't really interested in the finance side of it to me. And so, all of a sudden, you have finance, and compliance, and bankers, and folks like that. Do we need more regulation in this area or less?

IPO 113

IPO Cofounder Technical Review Government 113

David Teten

MARCH 18, 2021

Foundry Group, investing primarily in “ Software and Internet ”, follows six major themes, e.g., Human Computer Interaction (HCI) or Distribution. Revenue-Based Finance and Flexible VC investors invest using “alternative VC” structures, as opposed to conventional preferred equity and convertible notes. 5) Structure-defined funds.

Technical Review 78

Technical Review Cofounder Venture Capital Deal Flow 78