Both Sides of the Table

APRIL 27, 2014

'I was having dinner with a friend last night and we were chatting about venture capital and a bit about what I’ve learned. I started in 2007 with a thesis that my primary investment decision would be about the team (70%) and only afterward about the market opportunity (30%). I was telling him that it was much easier when I started because there were fewer deals, life was less public and somehow the world seemed to be spinning more slowly.

VC 374

VC investing investment entrepreneurs 374

Gust

APRIL 27, 2014

'Software Development Process via Wikipedia. Even when your startup is a one-man show and lots of fun, a “business” needs some discipline and controls to keep it from being defined as a hobby by investors, and assure some financial return. Like it or not, you are now entering the dreaded realm of specifying and documenting “formal business processes.

startup 187

startup entrepreneurs development networking 187

Berkonomics

MAY 1, 2014

'Let me tell you the story of how I raised $100,000 to fill a gap needed to purchase a new home for my young family years ago. I had located a beautiful home that would be a stretch to finance, and had arranged for a first mortgage from the bank, and a second from the seller. Home values were rising so fast that I knew I had to move quickly. So I went to visit a number of customer CEOs, told them my story, and asked them to advance some amount against their future billing from me.

creativity 81

creativity consulting financing finance 81

This is going to be BIG.

MAY 2, 2014

'I don''t drink. I mean, I consume liquid, but all of those liquids are non-alcoholic. I''m not Mormon. Nor am I an alcoholic. I have no real moral issue with reasonable amounts of drinking--and actually quite envy wine enthusiasts. It seems like a neat and interesting hobby. I just really don''t like the taste. Otherwise, I probably would drink wine.

culture 418

culture startup venture capital networking 418

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development

Tomasz Tunguz

MAY 1, 2014

Earlier this week, I wrote about the increase in cash compensation and decline in equity grants to VPs of Engineering and Product in startups. I received a lot of comments about the analysis, and in particular hypotheses to explain the data. I dug a bit deeper into the data set to find an explanation. Founding employees keep more equity today than ever through the Series A and Series B.

startup founder 40

startup founder founder startup investing 40

Both Sides of the Table

MAY 1, 2014

'Amazon. It’s the company that evokes fear into more startups and venture capitalists looking to fund eCommerce businesses than any other potential competitor. Every pitch I’ve ever seen has led to the, “Would Amazon eventually do this? And could we then compete?” type questions. But what if you could do the reverse of Amazon?

real estate 380

real estate innovation ventures collaboration 380

Fink About It

APRIL 29, 2014

A company whose board I serve recently decided to accept an offer to be acquired. About one third of the way through the due diligence period, I checked in with legal counsel to see where the legal bill stood and found out that we were already at $200k… whaaaaat? This was close to the overall budget [.]. The post 5 THINGS YOU CAN DO TODAY TO SAVE MONEY ON DILIGENCE LATER appeared first on Fink About It.

board 59

board VC 59

Tomasz Tunguz

APRIL 28, 2014

Since 2008, there has been a secular trend to increase cash compensation and decrease equity to startup management teams. Tho two tables below tell the story for VPs of Engineering (VPE) and VPs of Product (VPP) across the US broadly and in the SF Bay Area. VPE US SF. Cash +10% +16%. Equity -19% -17%. VPP US SF. Cash +26% +8%. Equity -31% -25%. In the past 5 years, VPEs have benefitted from a 10 to 16% increase in their cash compensation, but have seen their equity grants fall by 17-19%.

startup 40

startup ventures investing investment 40

Gust

APRIL 26, 2014

'Sure! There are quite a few senior executives of large companies who are angel investors. Unless there are specific competitive or ethical issues with a particular investment, there is nothing different from their employer’s viewpoint about investing in a private company rather than a public one. The only legal issue is that they need, like anyone else, to be an accredited investor.

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investing investment 138

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financing

Tomasz Tunguz

APRIL 27, 2014

The chart above compares the contribution of two hypothetical inside sales people with $400,000 quotas to an early-stage startup’s finances. In this case, contribution is the 18 month revenue of sold customers tallied cumulatively minus the salary costs of $100k annualized of the sales person. I’ve modeled a six month linear ramp for the sales person to reach 100% of quota.

culture 40

culture financing finance opportunity 40

Tomasz Tunguz

APRIL 30, 2014

What a difference three weeks make! Since I wrote “ The Correction in SaaS Company Valuations ”, SaaS company valuations have continued to fall. As a basket, SaaS companies have fallen 33% from their highs (median), wiping all the gains for the last year. To make that point more explicit, below I’ve charted the total value of public SaaS companies over the last ten months.

SaaS 40

SaaS economic environments disruption opportunity 40