Comments on: Understanding VCs – Where Are You on the Flightpath? http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/ Entrepreneur turned VC Mon, 14 Nov 2011 23:37:00 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Roy Rodenstein http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/comment-page-1/#comment-5824 Roy Rodenstein Sun, 04 Apr 2010 05:57:44 +0000 http://www.bothsidesofthetable.com/?p=2289#comment-5824 Ignore/just the way my mind works but- Have to say I'm shocked nobody mentioned Flight Control in this post! Tried the iPad version today too. It's a good companion course to this article :) Ignore/just the way my mind works but- Have to say I'm shocked nobody mentioned Flight Control in this post! Tried the iPad version today too. It's a good companion course to this article :)

]]> By: Roy Rodenstein http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/comment-page-1/#comment-11979 Roy Rodenstein Sun, 04 Apr 2010 05:57:44 +0000 http://www.bothsidesofthetable.com/?p=2289#comment-11979 Ignore/just the way my mind works but- Have to say I'm shocked nobody mentioned Flight Control in this post! Tried the iPad version today too. It's a good companion course to this article :) Ignore/just the way my mind works but- Have to say I'm shocked nobody mentioned Flight Control in this post! Tried the iPad version today too. It's a good companion course to this article :)

]]> By: Roy Rodenstein http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/comment-page-1/#comment-5823 Roy Rodenstein Sun, 04 Apr 2010 00:57:44 +0000 http://www.bothsidesofthetable.com/?p=2289#comment-5823 Ignore/just the way my mind works but- Have to say I'm shocked nobody mentioned Flight Control in this post! Tried the iPad version today too. It's a good companion course to this article :) Ignore/just the way my mind works but- Have to say I'm shocked nobody mentioned Flight Control in this post! Tried the iPad version today too. It's a good companion course to this article :)

]]> By: David Semeria http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/comment-page-1/#comment-11991 David Semeria Sat, 03 Apr 2010 22:30:20 +0000 http://www.bothsidesofthetable.com/?p=2289#comment-11991 Rather than an emergency landing, an unscheduled landing request from Airforce One might be a more appropriate analogy... Rather than an emergency landing, an unscheduled landing request from Airforce One might be a more appropriate analogy…

]]> By: David Semeria http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/comment-page-1/#comment-5822 David Semeria Sat, 03 Apr 2010 17:30:20 +0000 http://www.bothsidesofthetable.com/?p=2289#comment-5822 Rather than an emergency landing, an unscheduled landing request from Airforce One might be a more appropriate analogy... Rather than an emergency landing, an unscheduled landing request from Airforce One might be a more appropriate analogy…

]]> By: Aaron http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/comment-page-1/#comment-11984 Aaron Sat, 03 Apr 2010 04:09:24 +0000 http://www.bothsidesofthetable.com/?p=2289#comment-11984 That probably happens if you talk to syndicate groups who are all friends with each other<br><br>I just helped a startup CEO add competition to a deal that doubled the raise on the round A. Competition happens if the deal is good enough....if there is enough social value. If there isn't they will give you nasty ultimatums cause they are busy dating other guys and don't really care if you take the deal or not.<br><br>The equation in the market seems to be product + team + traction (traction= users 500k+ or revenue $300k+ runrate) = VC $$$. Those are the deals i'm seeing close with decent terms with competition. Some deals that are closing with phenomenal priced rounds right now have both parts of the traction users and revenue. That probably happens if you talk to syndicate groups who are all friends with each other

I just helped a startup CEO add competition to a deal that doubled the raise on the round A. Competition happens if the deal is good enough….if there is enough social value. If there isn't they will give you nasty ultimatums cause they are busy dating other guys and don't really care if you take the deal or not.

The equation in the market seems to be product + team + traction (traction= users 500k+ or revenue $300k+ runrate) = VC $$$. Those are the deals i'm seeing close with decent terms with competition. Some deals that are closing with phenomenal priced rounds right now have both parts of the traction users and revenue.

]]> By: Anonymously Posting http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/comment-page-1/#comment-11983 Anonymously Posting Sat, 03 Apr 2010 01:43:29 +0000 http://www.bothsidesofthetable.com/?p=2289#comment-11983 I think you're not quite thinking about it the right way. It's more like you're trying to date four chicks at the same time. Two or three of them decide they like you enough. They then get in a room together (a syndicate) and figure out how to torture you. =) <br><br>There is a degree of competition for deals, but given how hard it is to get funding (my experience is 3% of all deals I looked at actually got money) it's generally not true that there's this huge competitive dynamics and any entrepreneur is going to be playing one VC off of another. If anything, that can backfire and turn VCs off. This isn't 2000 when VCs all had $1B funds they had to deploy and needed to fund the whole round by themselves. They invest in syndicates again from what I can tell (and Mark can correct me if I'm wrong).<br><br>Yes there are those A++ deals with a guy that sold two prior startups for $1B, but those are not exactly the norm. <br><br>What is funky about VCs though is that they are kind of like lemmings in that they want to date the prettiest girl at the ball (sorry about all the imagery in one sentence). One of my friends who founded a company and got money from a very blue chip firm told me that it was difficult to get the first round of funding, but now he regularly fields calls from VCs wanting to learn more about the company. When it rains it pours. I think you're not quite thinking about it the right way. It's more like you're trying to date four chicks at the same time. Two or three of them decide they like you enough. They then get in a room together (a syndicate) and figure out how to torture you. =)

There is a degree of competition for deals, but given how hard it is to get funding (my experience is 3% of all deals I looked at actually got money) it's generally not true that there's this huge competitive dynamics and any entrepreneur is going to be playing one VC off of another. If anything, that can backfire and turn VCs off. This isn't 2000 when VCs all had $1B funds they had to deploy and needed to fund the whole round by themselves. They invest in syndicates again from what I can tell (and Mark can correct me if I'm wrong).

Yes there are those A++ deals with a guy that sold two prior startups for $1B, but those are not exactly the norm.

What is funky about VCs though is that they are kind of like lemmings in that they want to date the prettiest girl at the ball (sorry about all the imagery in one sentence). One of my friends who founded a company and got money from a very blue chip firm told me that it was difficult to get the first round of funding, but now he regularly fields calls from VCs wanting to learn more about the company. When it rains it pours.

]]> By: Andy Hunn http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/comment-page-1/#comment-11980 Andy Hunn Sat, 03 Apr 2010 01:34:04 +0000 http://www.bothsidesofthetable.com/?p=2289#comment-11980 Great analogy - we're living this right now. Great analogy – we're living this right now.

]]> By: Todd Havens http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/comment-page-1/#comment-11981 Todd Havens Fri, 02 Apr 2010 23:13:13 +0000 http://www.bothsidesofthetable.com/?p=2289#comment-11981 Sounds like someone has spent a good deal of their life in and out of airports!<br><br>Another great post, Mark. This is quite the education you deliver here on your blog, where it's always succinct, honest and of tremendous value. Thank you for that. Do I smell a very market-friendly book in the works? Sounds like someone has spent a good deal of their life in and out of airports!

Another great post, Mark. This is quite the education you deliver here on your blog, where it's always succinct, honest and of tremendous value. Thank you for that. Do I smell a very market-friendly book in the works?

]]> By: Aaron http://www.bothsidesofthetable.com/2010/04/01/understanding-vcs-where-are-you-in-their-flightpath/comment-page-1/#comment-5821 Aaron Fri, 02 Apr 2010 23:09:24 +0000 http://www.bothsidesofthetable.com/?p=2289#comment-5821 That probably happens if you talk to syndicate groups who are all friends with each other... look at angel list basically all the kids saying they invest with Ron Conway are cross talkers.<br><br>I just helped a startup CEO add competition to a deal that doubled the raise on the round A. Competition happens if the deal is good enough....if there is enough social value. If there isn't they will give you nasty ultimatums cause they are busy dating other guys and don't really care if you take the deal or not.<br><br>The equation in the market seems to be product + team + traction (traction= users 500k+ or revenue $300k+ runrate) = VC $$$. Those are the deals i'm seeing close with decent terms with competition. Some deals that are closing with phenomenal priced rounds right now have both parts of the traction users and revenue. That probably happens if you talk to syndicate groups who are all friends with each other… look at angel list basically all the kids saying they invest with Ron Conway are cross talkers.

I just helped a startup CEO add competition to a deal that doubled the raise on the round A. Competition happens if the deal is good enough….if there is enough social value. If there isn't they will give you nasty ultimatums cause they are busy dating other guys and don't really care if you take the deal or not.

The equation in the market seems to be product + team + traction (traction= users 500k+ or revenue $300k+ runrate) = VC $$$. Those are the deals i'm seeing close with decent terms with competition. Some deals that are closing with phenomenal priced rounds right now have both parts of the traction users and revenue.

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