The nice folks at Down to Business have republished my post The Priorities of a Venture Capitalist. Down to Business is a website and online show that is a fresh take on the business Q&A. Host Pat Croce cuts through buzzwords and jargon to find out what drives the people who are revolutionizing business in the worlds of media, technology, entertainment, fashion, and beyond. It’s got some fun stuff on it.
A well worn tradition of most venture capital firms is the Monday Meeting. While there are several variations of it, including having it the meeting on Tuesday or Friday in an effort to be counter-cultural, most venture capital firms gather on Monday’s to review their portfolios, have companies come in and present for follow-on rounds or new investments, and ponder the state of the universe. I expect there will be a lot of pondering today. Given that it’s only 1:23pm and I’ve already received several missives commenting on the Sequoia RIP article (including a skeptical email from someone forwarding the VentureBeat article stating that Sequoia raised the largest new fund in Q3 ), it’s clear that many VC firms are sitting around today discussing ways they can “help” their portfolio companies in these “uncertain times.” ...
Congrats to the everyone involved in LeftHand Networks – it was announced today that HP is buying them for $360 Million in cash. LeftHand was born and raised in Boulder and is a large company (and acquisition) for this region. HP is clearly in a buying mood having just completed their acquisition of EDS a few weeks ago.
My partner Chris Wand has a long guest post up on Ask the VC titled How Should I Approach a VC I Don’t Know? Lots of good do’s and don’ts for anyone looking to connect with a VC.
And post #2 is up (I guess post #1 went up yesterday and I missed it since I only read feeds in the morning.) Post #2 is titled Gross and Net Returns and – while it describes them – it has an excellent spreadsheet that go through the assumptions Fred and his partner Brad Burnham made on how they would invest their first Union Square Ventures fund. Fred uses this model as the basis for describing the math of Gross and Net Returns. ...
Fred Wilson has an excellent post up today titled Venture Fund Economics . It appears to be the first of several posts he’s planning to write on this topic. “When I write about venture fund returns, there are always comments and questions that lead me to believe that the economics of a venture fund are not well understood. And since most of the readers and commenters on this blog are people who work in the startup ecosystem, I think its important that the economics are better understood. So I am planning on some posts on this topic in the coming weeks.” ...
The NY Times has a great short article up titled The I.B.M. Acquisition Machine: A Seller’s Perspective . It has several quotes from Pierre Haren, the co-founder of CEO of Ilog which IBM acquired on Monday for $340 million. I’ve been involved in the sale of two companies to IBM. While a brief article, the comments Haren makes ring 100% true with my experience.
I feel like bitching about FAS 157 today. I was at the annual meeting for one of our LPs yesterday and there was a long discussion about the impact of FAS 157 on both the buyout and the venture capital business. Once again everyone was in violent agreement that this was yet another accounting rule – promulgated by the accounting industry – to generate more fees for the accounting industry while burdening companies, especially entrepreneurial ones, with additional regulations that have no real impact on reality. ...
Having been an entrepreneur and VC for over 20 years, I’ve now seen plenty of economic cycles – both at a macro level and specifically in the areas I invest in. As a result, I smiled when I received three conflicting pieces of information today from two people I know and like and one person that I don’t know but know is respected. Matt McCall at DFJ Portage calls the current VC cycle “dead” as of Q2 2008 in Rough Ride Ahead: Buckle Up & Get Your Money Now (if you can) . He says it with conviction, although he does acknowledge that he hopes he is Peter the Wolf. ...
My partner, Jason Mendelson, had a post yesterday on AskTheVC about our view on the problem of figuring out who will have to serve as the shareholder rep following the closing of M&A deals. For anyone who doesn’t know what this shareholder rep issue is, Jason does a good job of briefly explaining it. We’re pretty much done serving as the rep on these transactions. It’s been a problem for us for years, but we’re now working with and advising a company called Shareholder Representative Services that professionally manages the post-closing process so that we no longer have to get stuck with this job. We also get better information and results when SRS is our rep than when one of the other stockholders takes the job. ...