Berkonomics

AUGUST 10, 2023

They tolerate you and your management when the numbers are a bit murky but with an explanation that is believable and correctable. Draconian terms? We know why investors “join” your company… So be aware that professional investors are in your company for the eventual large profits at the liquidity event. That’s just the facts.

Liquidity Event 116

Liquidity Event Initial Public Offering Dividend Valuation 116

David Teten

AUGUST 19, 2019

Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. In 2019 we partnered with several revenue-based lending providers, effectively creating a marketplace. “. Alternative Capital. “ You qualify if you have $5k+ MRR. Decathlon Capital. Key elements: . “We

Revenue 60

Revenue Technical Review Software Review Equity 60

Both Sides of the Table

OCTOBER 12, 2014

In the old days there weren’t many fights about whether angels would take their prorata rights in financing rounds. People all across the value chain have taken notice including Limited Partners who are the people who invest in VC funds in the first place. Thus begins the dance. That seems fair.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

FEBRUARY 25, 2019

Here are some observations I have from this exposure: If a company moves from strength-to-strength with predictable outcomes, easy financings, low staff turn-over, limited competitive threats then the composition of the board probably doesn’t matter as much. As an investor board member I see this as my immediate goal, too.

LP 269

LP Startup Burn Rate Stock Options 269

Eric Friedman

AUGUST 18, 2021

He is also co-founder and Managing Partner of Deciens Capital, an early stage investment fund. As many of your listeners may know, there was an incredible piece published by a gentleman from Founders Fund, discussing Tiger [Global Management] and how they’re focused on the speed and scale business. On Sushi and VC.

Silicon Valley 88

Silicon Valley Venture Capital Cofounder Africa 88

Both Sides of the Table

NOVEMBER 9, 2014

Generally speaking in venture capital financings the legal documents will specify that only “major investors” (a threshold set in the agreement – which can be $500,000 investor or more). How party rounds can burn you if it takes time to find your groove. There is a reason for this.

SEC 352

SEC Venture Capital Early Stage Cofounder 352

David Teten

JANUARY 11, 2020

They’re taking a $1m check from me, or giving $5m to me as a limited partner. Other coinvestors: Limited partners, other VCs who are coinvestors, private equity funds which are potential growth-stage investors, etc. Google My Business , which helps me manage my Google presence. . This is hosted by NFX.

Social Media 60

Social Media Technical Review Media Private Equity 60

Steve Blank

FEBRUARY 3, 2011

We were just about to have a board meeting in another week to talk about raising another round of financing to keep our struggling disaster afloat. Their fiduciary responsibility was to manage a portfolio of investments for their limited partners. Our board meetings were collegial and often fun. If you succeed so do they.

San Francisco 333

San Francisco Silicon Valley Limited Partner Venture Capital 333

Steve Blank

JULY 15, 2010

VC’s invested their limited partners’ “risk capital” in a portfolio of startups in exchange for illiquid stock. This changed their interest from managing your board for their liquidity to managing the board for all shareholders. They’ve created virtual IPO’s for founders and employees via late-stage private financing.

Venture Capital 306

Venture Capital IPO Liquidity Event Entrepreneur 306

The Startup Magazine

MARCH 22, 2019

An article in Forbes explains that a venture capital firm makes its money through management fees (a percentage of the amount of capital that they have under management) and carried interest (a percentage of the profits of the business). Small business loans and crowdfunding will also finance a start-up business.

Angel Investor 119

Angel Investor Venture Capital Accredited Investor Equity 119

Babbling VC

OCTOBER 3, 2011

For those of you not in the know, they are one of the largest limited partners ( LP's : investors in venture capital funds) in Europe and are basically in almost all the funds throughout the market. Hypothesis 3: Insufficient diversification in European VC managers’ portfolios . This for me is a no-brainer.

LP 82

LP Europe Germany Venture Capital 82

Berkonomics

JUNE 15, 2017

They tolerate you and your management when the numbers are a bit murky but with an explanation that is believable and correctable. So be aware that professional investors are in your company for the eventual large profits at the liquidity event. They are your friends only as long as you meet or exceed planned growth and value.

Liquidity Event 97

Liquidity Event Initial Public Offering Dividend Valuation 97

Both Sides of the Table

FEBRUARY 6, 2017

In case you’re keeping score at home — that’s approximately the size of 65 US seed-stage funds managed by one company. We estimate that the top 5 US tech firms have more than $500 billion in cash sitting abroad and if this is brought back to the US it is likely to increase: R&D expenditure, M&A deals and Venture Capital financings.

Venture Capital 150

Venture Capital Saudi Arabia Kuwait Burn Rate 150

The Equity Kicker

FEBRUARY 28, 2014

I’ve just re-read the a 2012 report by the Kauffman Foundation about the contractual relationship between venture capital funds (often called GPs, short for General Partner) and their investors (often called LPs, short for Limited Partners). Both of these seem very reasonable to me.

Venture Capital 108

Venture Capital Limited Partner Portfolio Partner 108

Both Sides of the Table

MAY 23, 2010

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. a loan) that is later converted to equity at the time of the next financing. It starts as a debt instrument (e.g.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Agile VC

DECEMBER 6, 2012

A little more inside baseball from the VC biz… why VC’s rarely make “crossover” investments, with capital from multiple funds the VC firm manages invested in a single startup (see note 1). I was talking with an entrepreneur recently about this phenomenon.

LP 178

LP Balance Sheet Differentiation Limited Partner 178

Growthink Blog

MAY 23, 2011

The typical wisdom regarding the appropriate financing course for a new company goes as follows: 1. This venture capital financing - usually between $3 and $10 million - is the first of a number of rounds of outside investment over a period of three to five years. There are a lot of dark, hard days.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

David Teten

FEBRUARY 7, 2012

From the point of view of a limited partner, the great challenge is scaling the business. Our finance team acts as an outsourced CFO. If you calculate the dollars under management and divide by the number of Partners, they have one of the lowest ratios of any VC in the US with over $100m in assets.

Early Stage 148

Early Stage Private Equity Portfolio Aggregator 148

Steve Blank

JUNE 1, 2011

Investors get board seats to assure themselves and their limited partners that they are duly informed about their investment. 3) An experienced board brings an extensive network of customers, partners, help in recruiting, follow-on financing, etc. There are no standards for what each side (board versus management) does.

Silicon Valley 300

Silicon Valley Business Model Venture Capital Balance Sheet 300

Steve Blank

JUNE 1, 2011

Investors get board seats to assure themselves and their limited partners that they are duly informed about their investment. 3) An experienced board brings an extensive network of customers, partners, help in recruiting, follow-on financing, etc. There are no standards for what each side (board versus management) does.

Silicon Valley 273

Silicon Valley Business Model Venture Capital Balance Sheet 273

K9 Ventures

MAY 14, 2011

They are still individual investors, they invest on a full-time basis as professionals, but they have funds with Limited Partners. The limited partners may themselves run the gamut from individuals, family offices, venture capital funds to institutional LPs. They have 4-10 partners who are investing on their behalf.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

David Teten

AUGUST 20, 2019

Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Greater transparency to limited partners. Kim Folson, Co-Founder, Founders First Capital, observed, “RBI financing is more intimate than traditional equity. Potentially could use SBIC financing.

Revenue 60

Revenue SBIC Cofounder Venture Capital 60

Feld Thoughts

JUNE 25, 2015

Our deeply held beliefs are fundamental to our values, although we are comfortable challenging them regularly to make sure they are deeply held, and make modifications on occasion when we learn new things but only after a lot of thought and discussion, among ourselves and with several of our very close limited partners.

Syndicate 70

Syndicate Syndication Limited Partner Finance 70

Babbling VC

NOVEMBER 4, 2011

One partner may have a different appetite for risk in comparison to another. There may be differing opinions about how to manage a portfolio and so forth. I've decided to part ways with my partners. My partners will continue to manage the second and third fund but have put off raising a new one.

Portfolio 70

Portfolio Limited Partner Early Stage Cofounder 70

ithacaVC

FEBRUARY 23, 2012

Luckily, I am not in charge of the internal finance function at our fund. Some VC firms use the art of Level 3 inputs to mark up their valuations, which has a tendency to make limited partners happy. It is the time of year when VC firms do year end valuations for their portfolio company holdings.

Valuation 49

Valuation Institutional Investors Marketing Down Round 49

This is going to be BIG.

SEPTEMBER 19, 2012

million of limited partner commitments--a huge and exciting first step. Two Sigma is a technology and finance company in Soho filled with incredibly bright engineers and developers, so I’m really excited about leveraging that partnership in a number of cool ways.

LP 112

LP New York City New York Chad 112

Both Sides of the Table

OCTOBER 1, 2009

You can’t get paid for sitting on the sidelines – I always tell people that when recessions start managers in large companies get rewarded for cutting costs. The more Machiavellian the manager is the quicker he/she rises. When you start to visualize your own portfolio exits your checkbook becomes more available for new deals.

IPO 255

IPO Investment Bankers Venture Capital Marketing 255

Austin Startup

JULY 23, 2010

The company creates the leading software in an enterprise niche called pricing optimization and margin management. The company announced that is just completed $13M in financing from existing investors SMH Private Equity Group, ABS Ventures, Austin Ventures, and Trellis Partners. An item’s price is the price.

Balance Sheet 67

Balance Sheet Private Equity LP IPO 67

Berkonomics

JANUARY 27, 2010

They tolerate you and your management when the numbers are a bit murky but with an explanation that is believable and correctable. So be aware that professional investors are in your company for the eventual large profits at the liquidity event. They are your friends only as long as you meet or exceed planned growth and value.

Liquidity Event 67

Liquidity Event Initial Public Offering Dividend Valuation 67

ReadWriteStart

JUNE 13, 2011

Investors get board seats to assure themselves and their limited partners that they are duly informed about their investment. An experienced board brings an extensive network of customers, partners, help in recruiting, follow-on financing, etc. There are no standards for what each side (board versus management) does.

Silicon Valley 117

Silicon Valley Balance Sheet Metrics Early Stage 117

finance.fortune.cnn.com

AUGUST 21, 2012

Now Fortune has obtained more granular data, including returns for dotcom-era funds managed by such firms as Accel Partners, Benchmark Capital, General Catalyst Partners and Lightspeed Venture Partners. Through 12/31/11, less than 66% of the fund-of-funds called capital had been returned to limited partners.

Naming 49

Naming Term Sheet Private Equity Equity 49

Austin Startup

MARCH 7, 2021

At the same time, early-stage companies are thinking beyond the high prices of Silicon Valley to put down roots and find financing and growth partners. While Houston may have the most endowments and pension funds, when looking at the top five by assets under management, three are based in Austin?—?the Austin Ventures.

Texas 90

Texas San Antonio Houston Dallas 90

www.paulgraham.com

APRIL 28, 2010

My relationship with my cofounder went from just being friends to seeing each other all the time, fretting over the finances and cleaning up shit. The reason VCs seem formidable is that its their profession to.You get to be a VC by convincing asset managers to trust you withhundreds of millions of dollars. How do you do that?

Technical Cofounder 110

Technical Cofounder Startup Cofounder Founder 110

Both Sides of the Table

SEPTEMBER 23, 2010

Asked to respond to the topic, “What collusion happens with AngelList, if any&# I wrote the following: “Um, let’s not be naive here and not think that a “form of collusion&# doesn’t happen on virtually any financing round. Typical questions: What do you think of management? Investors talk to each other.

Entrepreneur 292

Entrepreneur Technical Review Valuation Stealth 292

K9 Ventures

NOVEMBER 30, 2008

The birth of modern-day venture capital (not considering the European monarchs financing explorations and projects as venture capital) can be traced back to American Research and Development, which was started by Georges Doriot. In return for the operational role the GPs play, their firm receives a Management Fee.

IRR 48

IRR Venture Capital LP Early Stage 48

David Teten

MARCH 14, 2018

Managers of VC funds typically want to grow their business aggressively, just like the founders we back. But, we normally have a clear ceiling on how high we can grow AUM, before hitting practical limits to deploying capital within the traditional VC model. . – Hire more non-Partner staff.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60