Startup Professionals Musings

JUNE 13, 2020

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds.

Angel Investor 314

Angel Investor Entrepreneur IRR Valuation 314

Startup Professionals Musings

AUGUST 2, 2014

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited Angel investors. Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds.

Angel Investor 266

Angel Investor Entrepreneur Venture Capital IRR 266

David Teten

SEPTEMBER 16, 2014

Angel investors are generally former entrepreneurs and/or executives, who invest in privately-held, early-stage companies. Angels relish the opportunity to invest in passionate and driven entrepreneurs with ambitious visions of the future – who doesn’t want to be part of the next wave of innovation? Average Angel Returns Over Time.

Angel Investor 114

Angel Investor Technical Review Venture Capital Pre-Money Valuation 114

Up and Running

MARCH 6, 2019

The image here is of the Rice Business Plan Competition, entrepreneurs pitching at the finals. But don’t quote me a damned IRR. Some entrepreneurs take a pitch presentation as if it were some kind of verbal final exam, in which they have to know all the answers. That’s me in the front row, second from the aisle, on the left.

Net Present Value 87

Net Present Value Forecast IRR Oregon 87

Up and Running

DECEMBER 22, 2015

My personal favorite in the “pure nonsense category” is the IRR, the Internal Rate of Return , something that was interesting for about one hour as part of the MBA curriculum, but which has no relevance in the real world. Read more of my articles related to this topic: You Can Take That IRR and Shove It.

Angel Investor 60

Angel Investor IRR Software Review Startup 60

Seeing Both Sides

SEPTEMBER 26, 2010

Entrepreneurs needed a lot of money, there were only a few VCs with money (it’s a shockingly small industry, with less than 500 or so active firms, according to the NVCA), and the VCs got to sit back and leverage their position of superior information and insight to choose their deals and drive favorable terms. .

IRR 36

IRR IPO Entrepreneur LP 36

David Teten

JANUARY 19, 2021

See Why Are Revenue-Based Investors Investing in Women & Diverse Entrepreneurs? This causes the cost of capital for Flexible VC, often calculated through IRR (similar to an interest rate), can be higher than that of venture debt or traditional RBI. 20-30% is a common target IRR for investors. Emily Campbell, Esq.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Tim Keane

JANUARY 12, 2010

Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react.   Internal Rates of Return naturally compound, so a 50% IRR is 7.59

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Steve Blank

JUNE 11, 2013

For many entrepreneurs “raising money” has replaced “building a sustainable business” as their goal. Entrepreneurs need to think about 1) when to raise money, 2) why to raise money and 3) who to take money from, 4) the consequences of raising money. What is an IRR? Not all that glitters is gold. William Shakespeare.

Venture Capital 335

Venture Capital IRR Liquidity Event Business Model 335

Startup Professionals Musings

APRIL 3, 2012

Another rule of thumb is a target of 50% IRR (a discounted cashflow calculation). Successful serial entrepreneurs usually find it easier to raise money from venture capitalists. If you're a first-time entrepreneur, that doesn't mean you can't raise VC money, but you're going to find it more difficult getting VC traction.

IRR 248

IRR Term Sheet Startup Valuation 248

David Teten

MAY 8, 2012

As Steve Case has said, it’s ridiculous that anyone can gamble and be guaranteed to lose money, but there are strict regulations around who can invest in early-stage private companies and earn (in some cases) a 27% IRR on their capital. *. The Entrepreneurs Access to Capital Act helps to redress this. Start now! *

Securities and Exchange Commission 148

Securities and Exchange Commission IRR Entrepreneur Angel Investor 148

Startup Professionals Musings

MARCH 12, 2023

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited angel investors. Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds.

Angel Investor 246

Angel Investor IRR Venture Capital Valuation 246

Startup Professionals Musings

NOVEMBER 11, 2010

Another rule of thumb is a target of 50% IRR (a discounted cashflow calculation). Successful serial entrepreneurs usually find it easier to raise money from venture capitalists. If you're a first-time entrepreneur, that doesn't mean you can't raise VC money, but you're going to find it more difficult getting VC traction.

IRR 225

IRR Startup Term Sheet Angel Investor 225

Both Sides of the Table

MAY 25, 2013

After all, I am no stranger to the publicly expressing the frustrations of dealing with the downside of this industry as I wrote about in 2006 when I was an entrepreneur. The better way to think about VC returns is, do the firms consistently beat alternative asset clases on an IRR basis to adjust for the increased risk and lack of liquidity?

LP 374

LP Later Stage IRR Term Sheet 374

Startup Professionals Musings

MAY 9, 2011

Rose, who has been described as "the Father of Angel Investing in New York" by Crain's New York Business, and a "world conquering entrepreneur" by BusinessWeek. The second company in which I invested, back in 2001, was a novel concept from the serial entrepreneur who invented social networking.

New York 221

New York Accredited Investor Advisory Board IRR 221

Steve Blank

JUNE 11, 2013

For many entrepreneurs “raising money” has replaced “building a sustainable business” as their goal. Entrepreneurs need to think about 1) when to raise money, 2) why to raise money and 3) who to take money from, 4) the consequences of raising money. What is an IRR? Not all that glitters is gold. William Shakespeare.

Venture Capital 227

Venture Capital IRR Liquidity Event Business Model 227

Both Sides of the Table

MAY 19, 2018

Or if you’re a VC raising from LPs you have to list all of your deals, your investment value, your carrying value, your multiples, your IRRs, TVPIs, DPIs, etc along with net cashflows plus your previous LPAs. Most entrepreneurs (and VCs raising from LPs) think this means progress. Entrepreneur : “Sure. It doesn’t. No problem.

Cap Table 336

Cap Table Due Diligence Forecast Churn Rate 336

Gust

APRIL 30, 2014

Having now invested in over 85 startups, and finding that my personal metrics are very similar to aggregated industry ones, it is clear that (a) there is little to no correlation between my home runs and my personal favorites, and (b) angel investing done correctly really *can* produce a consistent IRR in the 25%-30% range.

Angel Investor 148

Angel Investor IRR Due Diligence Aggregator 148

Startup Professionals Musings

FEBRUARY 5, 2018

As an active angel investor, I’m accustomed to hearing entrepreneurs pitch their expectation to quickly create a new dominant brand, based on their disruptive technology. Investors measure their success by looking at the internal rate of return (IRR). Only recently, I realized that times are rapidly changing.

IRR 143

IRR Marketing Startup Angel Investor 143

Steve Blank

AUGUST 5, 2014

Larry was the best entrepreneur I’ve ever known, and completely unconventional…. I was on the way to my lifetime IRR of 90%. I loved what he was working on (thanks to perspective in data management from my large company experience here—that prepared mind thing). And it was an amazing time. What can you learn from this story so far?:

Venture Capital 335

Venture Capital Silicon Valley Chicago Cofounder 335

Both Sides of the Table

OCTOBER 17, 2019

The advantage is that in many of our best deals we now have $50+ million invested so we can really support entrepreneurs as their businesses scale. At Upfront when we know we have a winning hand we prefer to put more capital to work, which both helps the entrepreneurs succeed and drives more aggregate financial returns for our LPs.

IP 223

IP Intellectual Property IRR Cofounder 223

Professor VC

MARCH 10, 2009

His latest venture, Bharosa, was sold to Oracle for a 6X multiple in 3 years to his angel investors, a sweet close to triple digit IRR. In this economy, all entrepreneurs are going to hear a lot of "nos", but time spent going after customers rather than investors should provide a higher return on investment.

Bootstrapping 28

Bootstrapping San Jose Silicon Valley Angel Investor 28

Startup Professionals Musings

JUNE 5, 2016

Too many entrepreneurs tell me they are looking for an investor, and can’t differentiate between venture capital (VC) investors versus accredited Angel investors. Angels are more likely to fund new entrepreneurs, and early-stage or seed rounds, while VCs tend to focus on entrepreneurs with a successful track record, and later stage rounds.

Angel Investor 120

Angel Investor IRR Valuation Startup 120

David Teten

OCTOBER 15, 2013

ff Venture Capital has consistently generated a gross IRR on invested capital in excess of 30%, in a world where the average ten-year returns for venture capital firms are in the single digits. Funding platforms and tools such as AngelList and Indiegogo* are clearly changing how entrepreneurs are raising capital. Now we can.

Venture Capital 114

Venture Capital Accredited Investor IRR Later Stage 114

This is going to be BIG.

DECEMBER 28, 2013

If you are a venture capital investor and you''re not preparing yourself to succeed in a more diverse ecosystem of entrepreneurs, you''re just going to get left behind. My total valuation multiple across that span is nearly 4x and the return rate is up over 110% IRR. YC''s best investing days may be behind it. That''s 25%.

Venture Capital 162

Venture Capital Cofounder IRR Dilution 162

Up and Running

JUNE 17, 2013

As the session got into open-ended questions, I was surprised, and even shocked, by a frustration shared by several of the entrepreneurs. And Internal Rate of Return (IRR)? If you’re the one telling entrepreneurs they need to show some fantastic return on investment, stop it. I trust my judgment on that.

IRR 71

IRR Flash Angel Investor Venture Capital 71

David Teten

APRIL 8, 2013

Based on a range of sources, we believe that most funds with well-developed Portfolio Operator models have top-quartile returns (typically above 20% IRR in the relevant time periods). Our thesis that greater investor participation correlates with higher returns is consistent with two other formal studies.

Private Equity 114

Private Equity Hungary IRR Venture Capital 114

Feld Thoughts

JULY 31, 2013

As Boulder continues to gain visibility as a great place to create companies, I’ve decided to highlight some of the entrepreneurs – and their companies – who have contributed to Boulder in significant ways. Our equity IRR has averaged around 50% since inception. “How can Brad help? We raised $2.7B

Bandwidth 148

Bandwidth Colorado Startup IRR 148

Growthink Blog

MARCH 29, 2010

If you don't know how, or need inspiration, read Entrepreneur, Inc. Supporting good non-profits is great, but even better is to support entrepreneurs while making excellent money doing so. Startup investing has outperformed every major investing class, with IRRs of over 27.3% (click here to learn more). This list, too.

IRR 59

IRR Entrepreneur Washington Government 59

Professor VC

JANUARY 17, 2008

I think the title of this post is a TV show, but fitting as there has been much debate in the venture community as to the whether angel investors are good or bad for entrepreneurs and VCs. One group charges entrepreneurs "an administrative fee" to present to the group. Touched by an Angel. return on investment after 3.5

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Hunter Walker

NOVEMBER 13, 2018

You’re basically along for the ride with an investor who has very different incentives than you do – a different time frame, the AUM business vs IRR business, and requiring a scale in outcome that’s just astronomical. *This* is a more complicated situation for seed investors. What do I think is happening in #2?

Cap Table 103

Cap Table IRR IPO Early Stage 103

Agile VC

NOVEMBER 13, 2012

And I think it’s at best bad form (and at worst outright deception) when VCs who have little or no capital to make new investments aren’t clear with entrepreneurs about their situation. typically, which in most cases would to >20% IRR. So at a fund level (e.g.

LP 154

LP Portfolio Venture Capital IRR 154

Growthink Blog

JUNE 3, 2014

Over the last three weeks, we have discussed the various factors that drive the 25% IRR return potential of the startup and emerging company investing class. And more to the point, the great entrepreneurs, the builders of businesses, those that actually create wealth… …have always percolated at the edges and NOT in financial centers.

Omaha 91

Omaha Accredited Investor IRR Silicon Valley 91

Feld Thoughts

AUGUST 1, 2018

We are very long-term investors, focusing on net cash on cash returns, rather than short-term or intermediate IRRs. We very much look forward to continuing to work with everyone we currently work with, as well as another group of great entrepreneurs and VC fund managers in our Foundry Group Next 2018 Fund.

Syndication 17

Syndication Syndicate IRR Canada 17

Hippoland

NOVEMBER 13, 2016

When I was an entrepreneur, it never crossed my mind how VCs measure their success. So, as an entrepreneur, in many cases, you are pitching people who may not even be good investors. A common intermediary milestone for most investors is IRR (internal rate of return) of the fund. But I should have thought about it.

IRR 48

IRR Valuation Portfolio Due Diligence 48

K9 Ventures

MAY 14, 2011

This is probably the very first group that an entrepreneur who is starting out may approach for some funding for his or her idea. As fiduciaries, the general partners of the uVC funds have to begin to focus on the dreaded VC I-word : IRR. Friends and Family : Or sometimes referred to as the 3Fs for Friends, Family and Fools.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Accredited Investor 125

The Next Web

DECEMBER 16, 2012

Income-based valuations consider aspects like CAPM (capital asset pricing model), IRR (internal rate of return), NPV (net present value), WACC (weighted average cost of capital), NCF (net cash flow), and GAAP (generally accepted accounting principles). Asset approach.

Valuation 128

Valuation NPV Net Present Value IRR 128