December 22, 2017 Bryce Roberts via Medium : Where There’s Smoke There’s Fire

The largest VCs have made their bets early, so funding slows for fast followers. Timelines for user growth take longer than anticipated. Revenue comes harder and less profitably than planned. New competition continues to get funded, albeit from less well known funding sources. Then, the category starts to feel and look and actually be overfunded.  Enter the next shiny thing. (read more…)

CATEGORY: resilience, VC, winner take all

December 6, 2017 First Round Capital : State of Startups 2017

Before we do, though, we want to acknowledge the significance of two ongoing conversations in our industry — both of which are heavily represented in the results we chose to feature. The first is about diversity and inclusion, which we incorporated into last year's survey to get founders' perspectives on root causes and possible solutions. And the second is about sexual harassment. We included a number of questions about this issue in 2017, and the results were stark. At First Round, whenever we ask founders what data they most want and need, they almost always say the same thing: they want to know what other entrepreneurs are thinking and doing (and whether what they're doing is normal or in line with their peers). To answer these questions, we're pleased to publish the industry's largest set of data specific to the founder and startup experience — we hope you find it informative and insightful. (read more…)

CATEGORY: growth, leadership, resilience

November 10, 2017 Bryce Roberts via Medium : How We Think About Returns

About 5yrs ago the team at Basecamp (fka 37Signals) stopped editorial work on a section of their site they called Bootstrapped, Profitable and Proud (BPP). The stated purpose of the site was to “profiles companies that have over one million dollars in revenues, didn’t take VC, and are profitable”.  Today, many view profitability as limiting or the acknowledgement that a founder has lost interest in hyper growth and has been lulled into the ease of running a mere “lifestyle business”. (read more…)

CATEGORY: alternative financing, profitability, resilience

October 2, 2017 Luke Kanies via Medium : Moving Beyond Silicon Valley Software Companies

Like the general financial industry, the world of venture capital has become adept at using money to create more money, but it does not consider of the wisdom of its actions. It chooses easy answers, thus leaving harder but better questions unexplored, and accepts high collateral damage to the employees, customers, and industry that at best is painful and at worst is pure exploitation. (read more…)

CATEGORY: resilience, risk, VC

July 20, 2017 Jonathan Lu via Hacker Noon : What climbing taught me about Venture Capital

For VC’s, the probability of failure is high but the consequence of failure is low / the probability of success is low but the consequence of success is high, so it’s only rational that they swing big and take a lot of shots on goal. There are 898 VC firms that invested in 7,751 companies in 2016 according to the National Venture Capital Association, meaning that VC firms invested on average in 8.6 companies last year. Compare that to 3600 Private Equity firms that invested in 3,538 companies according to Pitchbook’s annual report, for an average of 1 company per firm. (read more…)

CATEGORY: resilience, VC, winner take all

June 1, 2017 Bryce Roberts via Medium : Real Businesses

I assure you there are founders out raising money right now in the hopes of building a business so they can flip it, make millions, and fund their own comfortable “post financial” lifestyle. Of course, they would never frame it that way; so let’s be clear, if your pitch deck has an “exit strategy” slide you are pitching a lifestyle business. (read more…)

CATEGORY: bootstrap, product-market fit, profitability, resilience

October 15, 2016 Founder Collective via Tech Crunch : Overdosing on VC: Lessons from 71 IPOs

Venture capital is a hell of a drug. Used properly, it’s like adrenaline energizing many of the greatest companies of the past fifty years. Used incorrectly, it creates toxic dependencies. (read more…)

CATEGORY: bootstrap, resilience, VC

January 13, 2016 Eric Paley via Tech Crunch : When Burn Rate Outweighs Enthusiasm

It doesn’t matter whether a company’s burn rate is $10K per month or $10 million per month, companies die when their burn rates are greater than investor enthusiasm. Burn rate is a bet on the potential of a business. That bet, re-evaluated at each round of funding, is based on the belief of venture capitalists that multiples of value will be created with the money they invest in a company. Unfortunately for founders, enthusiasm can be fickle while burn rates are stubborn. The two can easily get out of sync. (read more…)

CATEGORY: leadership, profitability, resilience

September 27, 2015 Mark Suster via Medium : Why I Fucking Hate Unicorns and the Culture They Breed

If you’re fortunate enough to raise $100 million early-on to build your startup — congratulations. But to all of the 99.999% of other startups out there please know that this isn’t the success by which to measure yourself. Measure yourself in gym visits, in 3-yard gains, in sacrifice and dedication. Avoid the metaphorical parties and the alcohol and the extra pounds and know that your gains will come in lines of code and purchase orders and signed offer letters and repeat purchases. And during your year in the gym nobody may notice. It may have to wait until way down the road when you come out 80 pounds lighter. (read more…)

CATEGORY: leadership, resilience, valuation

June 25, 2015 Jerry Neumann : Power Laws in Venture

The professional innovation community takes it as a given that venture returns are power-law distributed. In Peter Thiel’s class at Stanford he said “…actual returns are incredibly skewed. The more a VC understands this skew pattern, the better the VC. Bad VCs tend to think the dashed line is flat, i.e. that all companies are created equal, and some just fail, spin wheels, or grow. In reality you get a power law distribution.” (read more…)

CATEGORY: resilience, VC, winner take all