Author, Investor, Speaker, Mentor
Y Combinator CEO Sam Altman just released a fascinating set of statistics about the firm. The numbers are pretty stunning; Y Combinator’s 940 companies are now worth more than $65 billion. That’s an astonishing mean value of $69 million…and recall, that Y Combinator buys into those startups at a sub-$1 million valuation. Now that’s a … Continue reading The Odds Are Always Against Startups
One of the biggest VC trends in the past half-decade has been the move towards what people are now calling “platforms.” While the details vary by firm, the common thread is moving from the classic VC model (a small number of General Partners who make investment decisions, market the firm, and help build companies) to … Continue reading Do Venture Capital “Platforms” Make Sense?
I love Jason Lemkin’s writings about entrepreneurship and building SaaS companies. Jason’s most recent success is EchoSign (sold to Adobe), and he was unusually candid about the importance of having a VC investor rather than a “party” round: http://bit.ly/17a2AW7 “Everything else, for funding, in the end didn’t really matter. The first $2m? Great, but we … Continue reading Always Get A Lead Investor
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
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)
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
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
Henry Blodget is a smart journalist who knows how to drive pageviews. He certainly got me to click through when he picked the headline, “DEAR ENTREPRENEURS: Here’s How Bad Your Odds Of Success Are” http://read.bi/17yADel Blodget riffs on a tweet by Paul Graham to estimate the odds of startup success: “Graham says that 37 of … Continue reading The Real Odds That Your Startup “Succeeds”
The always insightful Mark Suster recently tackled the subject of acquihires–the practice of large companies buying small startups simply to acquire their people. Mark lays out an excellent argument for why the acquiring companies are actually losing out when they make acquihires: http://bit.ly/10Cn0WP “You have been at Google, Salesforce.com, Yahoo! for years. You have worked … Continue reading Why I hate acquihires (unless I’m doing the selling)
Jason Lemkin, the co-founder of EchoSign, has written a thoughtful piece about seed investing. In it, he calculates that if you do 30 seed investments at $25K each (roughly the lower bound for a diversified portfolio), you’d need $750K in capital. (Even this is an underestimate, since it leaves out the need for follow-on investments) … Continue reading Why DIY seed investing is like taking a job as a court reporter