The VC Cosmological Constant

In his recent essay on “Startup Investing Trends”, the always insightful Paul Graham referred to the VC cosmological constant: http://bit.ly/13kaUV5 “There’s a rule of thumb in the VC business that there are about 15 companies a year that will be really successful. Although a lot of investors unconsciously treat this number as if it were … Continue reading The VC Cosmological Constant

Addressing the founder liquidity problem

The recent reports that Snapchat’s founders each took $10 million off the table during their Series B raised the usual debate about founder liquidity: http://bit.ly/11P65n1 On the pro side are the arguments espoused by one anonymous investor: “Founders get ‘rich’ now, and de-risk some of the startup. Doesn’t change alignment, just rewards them for their … Continue reading Addressing the founder liquidity problem

Build a profitable business while spending as little as possible (the lesson of Xobni)

It’s not that complicated to build a success startup.  Just build a profitable business while spending as little as possible.  It’s not complicated, but it’s hard. I recently saw the news that Yahoo! had bought Xobni.  Xobni was a noble attempt to tackle the email overload problem (xobni = inbox backwards).  According to the stories … Continue reading Build a profitable business while spending as little as possible (the lesson of Xobni)

Why (it seems like) all VCs are assholes

There’s one school of thought that tries to paint VCs as the enemy of the entrepreneur.  The VC-haters cite a litany of evidence, ranging from the tendency of VCs to turf out founders to the pressure they put on startups to scale prematurely. There is no doubt that VCs–like the rest of us–make mistakes.  But … Continue reading Why (it seems like) all VCs are assholes

The reasonable startup valuation formula

It seems like it’s unfashionable these days for investors to worry about startup valuations.  In my opinion, that kind of thinking is likely to lead to disaster for both investors and startups. Far too many people make the mistake of focusing on relative valuation.  “This deal is a bargain in comparison to the other deals … Continue reading The reasonable startup valuation formula

Y Combinator’s Startup Math

Paul Graham has a great essay out in which he explains his view of both Y Combinator and the startup ecosystem.  As usual, it’s a thoughtful essay with a lot of great points.  But what I’d like to focus on are the numbers he provided on YC’s portfolio: http://bit.ly/13kaUV5 “Y Combinator has now funded 564 … Continue reading Y Combinator’s Startup Math

Valuation is the universal lever for mitigating startup investment risk

I am a well-known valuation hawk.  That is, I have often gone on the record as saying that investors should care about the valuation they pay when they invest in startups, and that valuations are too high. This doesn’t make me popular in many circles, but I care more about speaking what I think is … Continue reading Valuation is the universal lever for mitigating startup investment risk

Is Writing Now A Core Focus For Top Tier VCs?

I read with some interest the news that Michael Copeland was leaving Wired to join Andreesen Horowitz to lead that firm’s “content strategy.” http://tcrn.ch/19u4LWj It makes perfect sense that Andreesen Horowitz would make this move.  Not only has a16z flourished by departing from the traditional VC model (hiring tons of non-investing staff to add value … Continue reading Is Writing Now A Core Focus For Top Tier VCs?

Smart Investors Should Seek Out Female Founders

I loved the points that Kat Gordon made in her recent guest post on Inc.com: http://bit.ly/15vVKYE “1). Women are amassing wealth, influencing spending, and driving tech usage at rates well beyond men. By 2030, women will control two-thirds of the nation’s wealth. 2). Founders are most likely passionate about something that meets a need or … Continue reading Smart Investors Should Seek Out Female Founders

Silicon Valley: The “Ultimate Meritocracy”

My fellow denizens of Silicon Valley are fond of referring to our happy little ecosystem as the ultimate meritocracy.  It’s definitely true that in comparison to the rigid and/or corrupt regimes that prevail in other industries and geographies, Silicon Valley is a meritocracy, but it is far from perfect. I often joke with the female/minority/over-30 … Continue reading Silicon Valley: The “Ultimate Meritocracy”