Smart-as-a-whip VC Sim Simeonov did some math and some simulations and came up with the conclusion that a large “portfolio effect” has a major, almost overwhelming, effect on the financial returns of e.g. angel and seed VC portfolios. English translation: make a LOT of small bets in order to win. (Even if most of those [...]
Posts under ‘vc’
Can a VC sit on more than 10 boards without f***ing up?
[Update: the conversation referenced below was with Scott Austin of the Wall Street Journal; he has written an article about the subject. In it, he quotes some VCs that have well over ten board seats, including Forest Baskett of NEA. I know Forest only through his and his firm's reputations (both stellar), and I emphatically [...]
VCs passing for “soft” vs. “hard” reasons
I recently made the choice (mistake?) of telling an entrepreneur, whose business I actually liked and respected, the real reason why I was passing on investing at the time. In this case, there was a new CEO recently signed up to work with a technical founder, there were some family relationships on the team and [...]
Can you trust any VC OVER 40?
Steve Blank at Entrepreneur Corner writes with the inflammatory headline, “Can you trust any VCs under 40?“ He doesn’t actually talk about trust, but instead gives us a gloss on the history of the original Internet IPO bubble (1995-2000) and the subsequent mini-boom in M&As (2003-2008). His thesis is that any VC under 40 has [...]
The Downturn, REAL vs. FAKE VCs, and REAL WEALTH
In early October 2008 I was asked by a local entrepreneurial booster group for a quote giving VCs’ take on the state of the financial world. Here’s what I wrote (but was too busy/lazy to blog) at the time: REAL VCs have committed funds from stable, liquid, institutions who are not going away (state governments, [...]
VCs and the Naughty Bits
I spotted a piece by Paul Kedrosky today during a blog-feeds-catchup-session where Paul talks about a sort of “(minimum) two degree of separation” rule that VCs maintain between themselves and the sex industry. (Quotes above for my words, not his.) In other words: benefiting from infrastructure, transport, payment mechanisms — cool. Having fleshy bits linked [...]
Liquidation Preferences: A Response to Leo Dirac
In a recent blog entry, Leo Parker Dirac poses the question of the fairness of liquidation preferences in VC financings of startups. He’s going to be delivering a lightning talk based on it tonight at Ignite Seattle. (To those of you who don’t know, liquidation preferences, or prefs, are usually a multiple of invested dollars [...]
VC Career Snippets: "The Wormhole"
This is the first of a series of “snippets” about getting a job in VC. I get asked about this approximately weekly, so I am going to try and do a highlights reel of things I tell people or thoughts I come up with on the topic. In a nutshell, VC is this weird parallel [...]
VC Essential Tensions: Momentum vs. Contrarianism
It is my intention to begin a series of entries dealing with “essential tensions” in investing in general and VC in particular. This is the first of the series. Venture capital as an industry deals with momentum investing. Paul Kedrosky has argued on his Infectious Greed blog that VC is a “bubble business,” and that [...]
VCs Are Not Your Channel (But They Might Be Your Friends)
Occasionally I get calls from folks who get the bright idea that, since VCs have a bunch of portfolio companies under influence, they can leverage selling their stuff by talking to me instead of pounding the pavement to the whole portfolio. If you’re thinking of doing this, remember that we (VCs) are not your personal [...]