Category: Venture Capital
Like many people, I’m currently deep in SPACland. I’ve been writing privately about it a lot but have now crossed over into a zone where I feel like writing more publicly about it.
When Jason and I wrote the first edition Venture Deals in 2011, we built off a series of 30+ blog posts we wrote in 2005 about Term Sheets. It’s fun to explore them for historical reference since Jack Bauer plays a major part in the posts.
While these posts were the seed for what is now a book (Venture Deals: Be Smarter Than Your Lawyer And Venture Capitalist), it was also a way for us to think through all the elements of a VC financing, back at a time when there was enormous opacity about how these worked, along with massive information asymmetry between people who did them all the time (e.g., us) and the entrepreneur, who did a few of these over her lifetime.
While the web is a much noisier place in 2021 than it was in 2005, the opacity and information asymmetry around SPACs are remarkably similar to what existed 16 years ago around venture deals.
The cliche “everyone’s an expert, but no one knows anything” applies. Yes, there are some experts, but not that many. And the amount of misinformation, misperception, opacity, and information asymmetry is enormous.
As I continue to write privately, I’m going to start writing more publicly. And I encourage comments, feedback, and corrections.
While there is much debate about SPACs, I believe they are a long-term part of the capital stack. They are evolving rapidly, which is part of what is so interesting about them, at least to me.
We are running the Venture Deals Online Course from March 7, 2021 – April 30, 2021.
We’ve moved the Venture Deals Community from Slack to Mighty Networks where we have much more functionality and flexibility.
Once again, we’ll do a weekly AMA with a variety of people participating.
For now, registration is open. Please sign up if you want to take the Spring 2021 Venture Deals Online Course.
We are running the Venture Deals Online Course from September 13, 2020 – November 6, 2020.
Our summer session had over 10,000 registrants and over 2,000 people completing the course. We got a lot of feedback about things to improve, several of which we are introducing into the Fall session.
Once again, we’ll do a weekly AMA with a variety of people participating. We are also creating a new Venture Deals online community available to all past and current participants of the course. We’ll provide the link for the online community on day one (we’ll be using Mighty Networks, which I’ve loved for my virtual Startup Community.)
For now, registration is open. Please sign up if you want to take the Fall 2020 Venture Deals Online Course.
I had a really nice week off the grid. More on that in another post.
I woke up this morning with a very long run in mind. The air quality in Longmont is awful because of the forest fires and, after checking the weather on my iPhone and seeing an air quality index of 138, I decided that a run wasn’t going to happen.
So, I ate breakfast with Amy and read the Sunday New York Times.
That was an error. Breakfast was great, but the NY Times was awful. Well, the paper wasn’t awful, but it made me feel awful. I hadn’t read any news all week, including any tech news, and 15 minutes of turning the pages made me anxious.
I think that’s the last time I’m going to read the NY Times.
I needed a palate cleanser. I saw on Slack that my partner Moody released episodes two and three of his Venture Kills vlog. Since I’d finished off The Last Dance during the week, I figured watching Moody might work to shift my mood.
I should have just watched this and skipped the NYT. I feel mostly back to normal now.
My partner Chris Moody decided to be a vlogger and has started a new video series. I suggested he hang out on TikTok but he prefers trying to get famous on Youtube.
So far he has 57 Views but 102 Subscribers. I find that fascinating.
We are running the Venture Deals Online Course again this summer. But before I get to that, I want to highlight a blog post from a Black colleague. I’m getting, and reading, many of these each day. For the foreseable future, I’ll highlight and amplify one at the beginning of each post I do, in case you are interested.
The country, collectively, has grieved five times in 60 years. People of color have collectively grieved five times in 2 weeks. And we carry that into work, school, our relationships, and are expected to be okay— even if and when we’re not.
Well, white friends, white allies, I’m done being uncomfortable alone. If you’re a white ally in racial justice, if you’re committed to being anti-racist, if you see that our peace, our harmony, our healing, and progress are bound together, then its time for you to share in this uncomfortability.
I encourage you go to read Ruben’s post Black Lives Matter. At Work. In Life.
We are running the Venture Deals Online Course from June 28, 2020 – August 21, 2020. We usually only run it twice a year (Spring and Fall), but given the Covid crisis, we’ve had many requests to run it this summer.
We’ve now had over 20,000 people take it. The last cycle was particularly fun as several of the AMAs I did had around 1,000 people on it. Someone also set up a Slack channel for the course which I was active in and met a number of new friends.
Registration is open now. Please sign up if you want to take the Summer 2020 Venture Deals Online Course.
I do a lot of random podcasts and especially like to be an early guest on new ones to help get them started.
The first five episodes are with me, David Cohen, Susan Conover, Amos Schwartzfarb, and Charlie O’Donnell.
Andrew Waine is the producer. He’s currently a senior at the University of Florida finishing his Bachelor’s degree in the Summer of 2020.
He reminds me of a young Harry Stebbings of the 20 Minute VC who reached out to me early (I was on Harry’s 65th episode in 2015), hustled, and did a fun interview with me where we cover the following topics.
- What is in the new edition of Venture Deals
- My time as an entrepreneur and entry into venture capital
- Advice from Jack Tankersley, an early mentor
- The differences between raising fund I vs. fund II at a VC Firm
- How fund sizes impact investing strategies
- How a startup can weather the storms of an economic downturn and the characteristics of the companies that survived the 2008 recession
- My opinion on USV founder Fred Wilson’s blog post about the importance of follow-on capital
- Why Foundry Group invests capital into other VC funds
- What startup accelerator Techstars looks for in its applicants
- Some resources and advice for a young person looking to gain knowledge about VC and Startups
You will even find out where I learned that “even pigs can fly in a hurricane” around minute six.
Harry Stebbings just released a new episode with me on the 20 Minute VC. I love how Harry uses all caps to title the episodes.
I adore Harry. I did an interview with him early on (#65) so it’s particularly fun to do an interview number that is great than this year.
We cover the following topics, among others. Plus, there is a special book giveaway and a few other gems buried in the episode.
1.) How Brad made his way into the world of venture following 40 angel checks and how that led to his co-founding Foundry Group? Why did Brad find the transition from angel to VC in the early days such a challenge? What 2 core things did he focus on when writing angel checks? How has that changed now as a VC?
2.) How did seeing the boom and bust of the dot com impact Brad’s investing mindset today? How does Brad think about investing through market cycles and the right way to think about investment cadence? Why does Brad believe that to be successful as a VC you have to be fundamentally optimistic?
3.) Where does Brad believe we are today in the cycle? Does he agree with Bill Gurley on the biggest challenge being the “oversupply of capital”? What must entrepreneurs understand with regards to market cycle dynamics and how they can and need to future-proof their business?
4.) From analysing his best investments, why has Brad come to the conclusion that TAM in the early days is really not helpful? What are the commonalities in how Brad’s most successful companies approach experimentation?
5.) What does Brad mean when he says, “don’t have fake CEO or fake VC days”? What does he mean when he often says, “run your fucking business”? What in Brad’s mind would constitute a “fake day” vs moving the needle for your business? What does Brad think is the best way for VCs to truly get to know one another? Why is, “hey let’s do a deal together one of the most hollow and fake statements in venture?”
6.) Brad has sat on some of the most meaningful boards of the last 2 decades, what have been Brad’s biggest learnings on what it takes to be a great board member? How does that change with the progression of your career? What advice would Brad give to me, having just gained my first board seat? If the VC does not support the CEO, what is the right process? Why does Brad believe the VC should work for the CEO?
7.) What is Brad’s biggest advice when it comes to learning how to say no? What advice does Brad hear most often that he commonly disagrees with? Why does Brad feel we are in a moment of peak noise in the ecosystem today? To be a great leader, what 2 skills does Brad believe you need to have?
There are some blog posts that every entrepreneur should read.
He covers three cases:
- Bullish aka You Are Absolutely Killing It
- Written You Off
- Too Early To Tell – Some Good Stuff, Some Challenges But A Lot To Do
The real gold in this post is in the Too Early To Tell category. Hunter has a great lead in:
“Here’s where I think founders and cap tables
shouldbe more proactive. The default is to let the firm assign another person at the fund (hopefully a GP) and then just keep working on the plan of record as if nothing changed. My experience suggests this will be neutral to negative long term,unless you end up in the “killing it” camp by next fundraise.”
Hunter’s notion that founders and the CEO should be proactive here is right on the money.
At Foundry, we periodically load balance our boards. This is a different phenomenon than the one Hunter is talking about, although we’ve learned to be clearer about what we are doing when we are doing it. I recall a personal low point when a founder/CEO who is a close friend asked to go for a walk and started the conversation with “You could have told me that you were leaving my board in a more graceful way than a one paragraph email.” Very true.
The lesson once again is things change, communicate clearly, and be proactive.
My partner Seth Levine has written several posts over the years on the
His 2019 post, titled creatively How To Get A Job In Venture Capital is excellent. Things have changed in the last decade since his 2008 post titled How to get a job in venture capital (revisited), which was an update from his 2005 post titled How to become a venture capitalist. All three posts are worth reading.
Following is a teaser for each of the key points Seth makes.
- Take the long view. Despite the relative increase in the number of venture firms, there still aren’t all that many jobs in
- Get involved in your community. Venture and entrepreneurship aren’t spectator sports and are best experienced from within.
- Get involved in companies. There are lots of great ways to help out companies directly.
- Network. Most people are terrible networkers. They treat networking transactionally and they are always looking to take from their networks vs. give to them (good networkers adhere to the #givefirst mentality)
- Engage. Lots of venture capitalists put out a lot of content and it has never been easier to engage with the venture community. Comment on
blogand Medium posts, follow VCs that you respect on Medium and Twitter, send them ideas and thoughts on what they’re writing about and investing in. Stay active and top of mind.
- Look for any way in. Your first job in venture is typically the hardest to get.
- Work for a startup or start one of your own. This was true 10 years ago and it remains true today.
- Invest if you can. With investment becoming slightly less regulated there are opportunities to put even modest amounts of money to work through platforms like AngelList and others. If you have the ability, it’s not a bad way to show an interest in investing and give you something to talk about in your networking.
- Persevere. Getting a job in
ventureis hard and can take a while. Likely it won’t happen. Keep the long game in mind, have fun while you’re going through the process and keep at it.
If you are interested in a job in venture capital, go read Seth’s posts How To Get A Job In Venture Capital (2019). And How to get a job in venture capital (revisited – 2008). And How to become a venture capitalist (2005).