VentureStart » venture capital

Startup Valuation — How It Really Works!

VStart — Tue, 09 Mar 2010 02:37:01 +0000

Want to know how Venture Capitalists think about valuing your startup company? Here is an article by Scott Lenet of DFJ Frontier, who have a Sacramento office. Looks like formulas aren’t used; rather valuation is based on three things:

Valuation of deals done on comparable companies
Investors’ experience, and having the opportunity to see many deals, done or not
Whether the investment return at the time the company exits (e.g., sells to another company, or does an IPO), under the best circumstances, meets the VC firm’s criteria

The article could lead one to think that a 10 times (10x) return is great for the investor. Well, we are not sure that is universally accepted. Consider the early stage investor (angel or seed stage VC) where maybe only one in ten of their investments really make it; 10x will just get you your money back on your entire portfolio (the great one just makes up for the nine that fail or just muddle along)! We would think experienced investors will have higher expectations!

Video For All Startup Entrepreneurs

VStart — Wed, 20 Jan 2010 01:24:33 +0000

We saw a great video today that every startup entrepreneur should take a look at. It is an online interview by Jason Calacanis of Brad Feld. Jason is an outspoken entrepreneur who recently created a huge online discussion about entrepreneurs having to pay substantial dollars to present to Angel investors. Brad Feld is an entrepreneur, turned Angel and VC, who is very entrepreneur centric and has a widely read blog (that’s where we found this).

This video is 2 hours long but the first 90 minutes are really worth listening to. It covers these topics:

Types of Angel investors and cautions about the make up of Angel groups
Paying Angel groups to present
Building an entrepreneurial culture in Boulder (population 150,000) by importing entrepreneurs — thoughts for Sacramento?
How, in web-based startups, having geeks on the startup team is more important than domain expertise
Good tips on pitching with an entrepreneur pitching live over the phone
How investors in multiple rounds of financing can destroy a company with in-fighting to the detriment of the entrepreneurs
Passion and perseverance — with an example of one of Brad’s investments that took off after ten years!

Yes, it’s long but …….

VC Bootcamp

VStart — Mon, 13 Jul 2009 18:06:05 +0000

DFJ Gotham Ventures & Wilson Sonsini Goodrich & Rosati gave a Venture Capital Bootcamp at Columbia University on June 3, 2009. Much of the content is good for Angels as well, and be sure to look through the entire slide presentation; there is some good material in the latter half. (You can also apply to a local FREE bootcamp entitled “Angle for Angels: A Primer for Entrepreneurs on Raising Capital“ put on by the Foothills Angels.)

You can see the video and slides at the Gotham site, but here are the slides that were posted on Slideshare.

VC Bootcamp By DFJ Gotham Ventures and Wilson Sonsini Goodrich & Rosati

View more presentations from Mark Davis.

Startup Angel and VC Investment Market as of June 2009

VStart — Sat, 11 Jul 2009 19:41:35 +0000

Dave McClure has been geeking out in Silicon Valley for almost twenty years as a software developer, entrepreneur, startup advisor, angel investor, blogger, & internet marketing nerd. Here is an interesting presentation from SlideShare on the current investment climate for (web) startups.

US Startup Investment Market (Startonomics Tokyo, June 2009)

View more presentations from Dave Mcclure.

Pitching Startups to VCs and Angels — David Rose Serial Entrepreneur and Angel

VStart — Thu, 09 Jul 2009 21:29:20 +0000

There are many sites, documents and videos on the web about pitching a startup to investors. Here is one video that stands out. It is by David Rose, an angel investor, and serial entrepreneur. He is also the founder of Angelsoft (the platform used by most angel groups to manage entrepreneur applications, and deal flow).

Hope you enjoy it!