Showing posts with label Investment. Show all posts
Showing posts with label Investment. Show all posts

Monday, January 07, 2013

What After Mobile?

Image representing Fred Wilson as depicted in ...
Image via CrunchBase
Fred Wilson: Putting 2012 To Bed
My venture investing career has three phases all roughly 6-8 years long. The first, at Euclid, was software to internet. The second, at Flatiron was internet to bubble. And the third, at USV, has been web 2 to mobile. I have always used a new firm to denote a new investment phase for me. Throw away the old. Start with the new.
One way to look at mobile is that it is the touch interface, successor to the GUI, Graphical User Interface. When you come from that angle, the question what after mobile has an easy answer.

Natural User Interface, NUI, with all its software and hardware implications.


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Saturday, August 04, 2012

Slow Investing, Remote Investing


Remote is not so remote. You can get real time, deep coverage, in text, photo and video formats, from any corner of the world. There is real time cheap to free communication.

The so called First World collapsed a few years back because it did not invest its surplus trillions into Third World infrastructure that give guaranteed 10% annualized returns.

Instead those surplus trillions were used to torpedo the basic financial infrastructure in the First World. Shady real estate investments that collapsed like a house of cards.

Real estate is thought of as a safe investment. The house is still there no matter what happens. That is the thinking. What if the house is there but it lost 80% of its value? Is the house still there? If you think it is still there, I call it gold standard thinking. Getting rid of the gold standard was a good thing. Not all people, including some people in Congress, agree.

Bypassing Wall Street

How can Wall Street do the damage it has done and still not be taken over by a whole new generation of finance startups? It is like if Blogger were to refuse to let you migrate all your content to Wordpress. In a more of a market economy you should be able to move your money from one bank to the next in a flash.

A globalized world does not quite jive with the nation state moat. And damage happens.

There is global infrastructure, and there is global microfinance.


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Monday, October 24, 2011

"Insuring" Angel Investors

An assortment of United States coins, includin...Image via WikipediaThe idea behind insurance is that you pay for auto insurance, I pay for auto insurance, and so do a million other people. Not a million get into accidents. When a few do, it is paid for by all collectively.

Angel investors get screwed by established venture capitalists routinely. In the later rounds the VCs hog the negotiations in ways that people who believed in you early end up getting the short shift. You end up not making money even when the startup does well.

And then there is the no small matter of losing your money entirely because the startup you invested in went down.

It is a numbers game. Startups are known to go down. The best VCs expect at least one third of their startups to go down. And at the outset they have no idea which one third.

Monday, April 25, 2011

That 10X Return Thing

Web startupsImage via WikipediaWhen VCs invest in your startup, they want a 10X return. So if they invest a million, they want you to turn that into 10 million dollars.

Why? Because they are greedy bastards? Maybe.

It's a numbers game. Say nine out of all 10 startups fail. That is pretty close to the actual numbers, by the way. So money was lost on nine out of 10 deals. One million turned into zero dollars. That stunt is still a lot of hard work on the part of many people, believe it or not.

But one makes it, and gives a 10X return. So 10 million dollars were invested in 10 different startups. Nine of them went down. One turned that one million into 10 million. That is a break even situation. The VCs started with 10 million dollars, they ended up with 10 million dollars. Where's the game?

Tuesday, March 22, 2011

Venture Capitalists And Their Thesis

Hacking Venture Capital, Fred Destin, Mini See...Image by paulamarttila via FlickrYou can waste time as an entrepreneur knocking the doors of the wrong venture capitalists. VCs tend to have sectors they are knowledgeable about and are interested in. If you are not a fit, you are not a fit. You might have a brilliant idea, a brilliant team, a brilliant product, but if you approached the wrong VC, you will still get a no.

Venture Capital Investment Thesis Myths For venture capitalists, an investment thesis states the main idea of their fund–essentially, why your venture fund exists, and what it proposes to invest in ..... does the company mesh well with our macro-economic analysis? Are they operating in a market we understand? What are the future expectations of the sector? .... many venture capital firms don’t have investment theses. Those firms also tend to not last. .... Like writing a presentation/business plan/executive summary, there’s no set procedure for creating an investment thesis. ..... investment theses only last a couple years ... investment thesis will most likely be constantly tinkered with

Friday, November 05, 2010

Ben Horowitz: Hip Hop Mogul

Ben: As Kanye says, hip hop is 1/2 what you say and 1/2 how you say it, so I put the tracks up on the blog http://bhorowitz.com
Me: @bhorowitz The hip hop quotes make your blog stand out and gets me to keep coming back. Although the posts are also good.


Friday, September 24, 2010

Scoble Chimes In On Angelgate

Scoble, Longhorn EvangelistImage via Wikipedia
Robert Scoble: The secret hell of tech industry angel investors: when the story broke, I thought it was just Mike being bombastic and trying to make something out of a dinner that he wasn’t invited to..... Mike stumbled into a story that has a ton of undercurrents. ..... The angel investor world is getting HYPER competitive .... Entrepreneurs are seeing access to lots of capital. ..... 10 people just are not going to have enough market power to do anything really naughty although it’s good to nip this problem in the bud, which is why I now support Arrington’s stance.
The early stage investment world is seeing major churn, but I would like a much larger geographical spread, not just on the continent, but globally. It will happen.
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Wednesday, September 08, 2010

Chris Dixon: A New Breed Early Stage Investor



Chris Dixon is a New Yorker. Chris Dixon has a day job. He is working to build a middle range, ambitious company. Hunch is one of those post-algorithm search engines. They try to bring in the human element more front and center.

Chris Dixon was not trained as a techie. He did not learn programming at school. But he is very much a creature of the tech world, the startup world. He very much fits my definition of a techie. He belongs. He will rule.

I wish more prominent tech entrepreneurs blogged like Chris Dixon does. But his blog is less that of a tech entrepreneur, and more that of an early stage investor.

I think Chris Dixon's real calling is not that he is a tech entrepreneur, but that he is one of those who are really defining early stage investing. If you listen to Dixon, you will think VCs are dinosaurs. They don't "get" it. They are not hands on enough. They don't really get their hands dirty. Writing checks no longer does it. You really have to be involved.

And this blog post by Chris Dixon is a jewel. It really distills a lot of what he has said over time.
GigaOm: Chris Dixon To VCs: Act More Like Startups: “have fewer meetings” and “have everyone at the firm blog/tweet.” ..... venture firms should act more like the startups they invest in, right down to his suggestion that they “have offices that look and cost like startup offices — or better yet, don’t have offices at all [and] spend your time visiting companies.” ..... VCs should not “talk/tweet/blog about your vineyard, yachting, golfing etc. while you tell your CEOs to work non-stop and be frugal.” ..... “Stop kidding yourself that you add a lot of value beyond recruiting/intros/governance/financing/selling companies.” ..... “Say no to companies. Saying “come back later” feels like a free option to you but actually hurts you and the startup in the long run.”

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Wednesday, July 14, 2010

Seed Money

Image representing First Round Capital as depi...Image via CrunchBase
It is much cheaper to start a dot com today than it was in the late 1990s. What I do for free on the Blogger platform today had to be built from scratch for a dot com I was part of in 1999. Amazon got rid of servers for you. Only a few days back Google dropped a bomb: now anyone can create an Android app. Elementary programming is now like flipping the light switch.

The need for early stage funding is not as dire as it used to be. But the need for later stage funding is still dire. I am going to argue that is also going to change in the next wave of innovation. There will be companies like OfferPal Media that will help you monetize early and strong. There will come a time when most startups will need little to no money early stage, and little to no money late stage. Asking a startup to both build a great service and to monetize that service is like asking coders to buy and upkeep servers. Makes no sense.

But this newish development is not just about there being less need for big, early money. This also is about saying investors need to get down and dirty with their investments. They don't need to put in daily involvement like members of the executive team, but showing up once in a while for the Board meeting and getting your fee perhaps does not cut it no more. You need a more hands on approach.

The dot com domain is going to stay fertile for a long, long time. To see saturation in that domain is to suggest the human mind will attain satiation at some point, and I just don't see that happening. The human mind has been programmed to stay permanently hungry. Content creation, content curation, content search: they will stay in play.

There is plenty of room on the cutting edge. But then there is plenty of room if the entire world is your stage. You have to be willing to go wherever there might be opportunities for growth.

And money does not differentiate between one sector and the other. New hot domains will emerge. Clean tech, bio tech, nano tech are the obvious names being bounced around. And there are old names. I believe microfinance could easily digest a few trillion dollars. All that money the Wall Street junkies sunk into real estate the past decade and brought the house down for the rest of us, if they had been innovative, they would have taken some of that money into microfinance.

Summary statement: things are exciting, and are getting heated up. I can't even see five years out, let alone 10.

Fred Wilson: Some Thoughts On The Seed Fund Phenomenon
I blog because it helps me think through a lot of issues we face in our business ...... it still takes on average $20mm to get a web startup to sustainable positive cash flow. But the vast majority of that capital will be required after the business has "traction." ..... What has changed in technology venture capital is not so much the total capital requirements, but when they are required. ..... Dennis and Naveen had built the service all by themselves and had just lured Harry onto their team. They needed no capital to do that. In fact they did not even have a bank account when we went to close our seed investment...... The deals that work get very competitive when it is time to raise real money. ..... First Round Capital, the grandaddy of the web 2.0 super seed funds, has now evolved into a firm that is twice as big as our firm in terms of investors and they have more capital under management than we do. And I've met a couple investors who are talking about creating "seed bridge funds." I think that's a great idea..... We are still figuring out to evolve the VC business to reflect the change in financing needs of entrepreneurs and we aren't done by a long shot.
Paul Kedrosky: The Coming Super-Seed Crash
a combination of ease of entry, lower capital requirements, failing incumbent venture capital (VC) firms, and general fervor has driven the emergence of a host of new "super-seed" firms. These small-ish outfits -- usually running less than $20m -- specialize in seeding a bazillion companies, following on in very few, and generally trying to be fast-moving and networked. ..... Nor does it mean that incumbent VCs will once again rule the world with mega funds. Many of them, like the dinosaurs, have turned out to be evolutionary dead-ends that couldn't adapt with a changing financial landscape. ..... Declining average cost of company creation is driving declining average cost of venture firm creation. ...... Incumbent VCs make up shit about the inadequacies of super-angel funds ..... Venture capital is hard, whether practiced by brain-dead VC incumbents, or by smart and nimble super-angels. Most VCs, and most angels, fail -- it's just that its takes 10 years to kill a VC fund ..... as incumbent VCs justifiably vanish en masse, niche overshoot seems almost ecologically inevitable among super-seed funds.
Chris Dixon: It’s Not That Seed Investors Are Smarter – It’s That Entrepreneurs Are
was a very common occurrence before the rise of seed funds, due to VCs pressuring entrepreneurs to raise more money than they needed so the VCs could “put more money to work.” ..... I thought the brands of the big VCs would help me and didn’t really understand the dynamics of fund raising. ..... Today, entrepreneurs are much savvier, thanks to the proliferation of good advice on blogs, via mentorship programs, and a generally more active and connected entrepreneur community. ...... prominent seed funds will outperform top-tier VC funds
John Boyd: The Rush To Early Seed Stage: Later Stage Implications And Top 7 Mature Themes
every time I turn my head there is another seed incubator popping up. .... Things are not as active in traditional venture capital funds as many struggle to raise super sized funds and maintain the flow of fees. Angels and incubators, on the other hand, are exceedingly active. ...... While some of these early stage deals will be capital efficient even in later stages, many will still need relatively large raises that angels and incubators just can't handle. ..... an early stage deal has to reinvent itself multiple times. ..... Some really famous seed investors use the shotgun approach. ..... Early stage investing requires an ability to go from failure to failure without any measure of diminished hope or exuberance. To me that implies a lot of the ex-corp dev guys and lawyers who are now active seed investors may drop off. ....... My relationships with teams I've invested with early on are like family as you are often in some pretty thick battles with them. ....... Right now we don't have enough competition in broadband and too much spectrum is tied up warehoused in too few hands.
Fred Wilson, 2006: Web 2.0 Is A Gift, Not A Threat, To VCs
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Thursday, May 21, 2009

Google's Newest Venture: Google Ventures


Image representing Google as depicted in Crunc...Image via CrunchBase


Google's Newest Venture: Google Ventures young companies with truly awesome potential ...... finding and helping to develop exceptional start-ups. We'll be focusing on early stage investments across a diverse range of industries, including consumer Internet, software, clean-tech, bio-tech, health care and, no doubt, other areas we haven't thought of yet. ........ times are tough, but great ideas come when they will ...... the current downturn is an ideal time to invest in nascent companies that have the chance to be the "next big thing," and we'll be working hard to find them ...... If you think you have the next big idea
http://jyoticonnect.googlepages.com
Google Ventures seeks to discover and grow great companies - we believe in the power of entrepreneurs to do amazing things. ....... We invest anywhere from seed to mezzanine stage and embrace the challenge of helping young companies grow from the garage to global relevance. ..... we're out to build great companies, period.
http://jyoticonnect.googlepages.com
First and foremost, we're looking for entrepreneurs who are tackling problems in creative and innovative ways. ..... amounts ranging from seed funding to tens of millions of dollars
Distributed Search
Wolfram Apha Is Cool
Google Falling Behind Twitter?
Taking The Number 2 Spot On Google Search For Donut Android
Hitting Number 4 For Google Search Results on Cupcake Android
Donut Android: Windows 95, Android 2009?
Cupcake Android Delay Reason: Donut Android
Bad Time To Start A Company?
Google Is Working On Search
Ggoats
New York City: Transformed Forever?
Reimagining The Office
Stream 2.0: The Next Big Thing?
Microfinance, Nanotech, Biotech, Software/Hardware/Connectivity
David Gelernter: Manifesto
Stephen Hawking Has Taken Sick
The United States Of Entrepreneurs
Spamming Om Malik
My Relationship With Ashton Kutcher
The Human Is The Center Of Gravity In Computing
Visionary Entrepreneurs Will Recreate The World
That StartUp Mentality (2)
That StartUp Mentality
Five Years Of Gmail: What Would Gsus Do?
The Search Results, The Links, The Inbox, The Stream
Fractals: Apple, Windows 95, Netscape, Google, Facebook, Twitter
I Talked To Google Through Twitter And It Worked Like Magic
NY Tech MeetUp Mailing List Web 5.0 Controversy
Web 5.0 Is Da Bomb
Competing For the Web 3.0 Definition
Craig Silverstein











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