This Week in Venture Capital with Jason Calacanis

Posted on Apr 7, 2010 | 50 comments


I was on This Week in Venture Capital today with Jason Calacanis talking about the big VC deals at the moment and talking about the VC industry.  It’s a new show that Jason has created along the lines of his popular series including This Week in Startups.  I think this one will become popular, too.   It’s designed to be an engaging way to catch up on the quick venture news of the week.

It’s about a 30 minute video (or about as long as it normally takes to read my rambling posts! ;-) ).  I’d embed the video but it doesn’t seem to allow you to do this so here’s the link the This Week in Startups, Inaugural show.

We covered the following and much more:

- FourSquare (rumors of both an $80m pre money or a $100 million acquisition). I was asked if I would pay $80 million.  My answer: “no.”  I believe that the team is high potential but the valuation seems stratospheric to me for the stage of the company.  But I’d love to be wrong and see them all make a ton of money.  I also agree with Charlie O’Donnell that they won’t sell to  Yahoo! now (or ever).  I believe that the “check in” game model has a shelf life but that FourSquare is smart enough to be working on future gaming aspects.
- Box.net (raised $15 million led by Scale Venture Partners and included DFJ and USVP .  Didn’t discuss much but I love the online document collaboration area that Box.net serves including players like Dropbox, Drop.io, DocStoc, Scribed and SlideShare.
- Quora (funding led by Benchmark at a crazy valuation: $86 million).  Crazy valuation.  But from what I understand A+ team and obviously backed by a great firm.  I can only imagine that there’s an inside story here I don’t know about.  Q&A delivers amazing SEO juice that I’ve seen at several recent companies so I get that.  Plus, maybe they’ve got some mega Facebook deal in the works?
- Gdgt (led by Spark, True Ventures) – Love the idea.  People spent a ton of time researching which gadgets to buy.  The Web 1.0 sites still dominate.  And SEO juice of sites with no value makes searching for real product feedback suck.
- Burstly (Led by … me! ;-) )- I’ve already written about why I invested in this company so won’t go on and on again.
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Also in the video:
- Is it a good idea for VC’s to pay stratospheric prices?
- IPO market is back.  We discussed some of the recent IPOs.
- Talked about the roles of partners, venture partners, associates and principals in a VC
- Why VC’s who have “dial out” programs to early-stage startups damage their reputation
- My blog and what it’s done for my deal flow
- and much more

  • http://lmframework.com/blog/about David Semeria

    Jason interrupts too much.

  • http://lmframework.com/blog/about David Semeria

    Jason interrupts too much.

  • http://www.twitter.com/kriscobbaert kris

    I liked it. It reminds me of twi Startups, which by the way led me to this blog.

    One thing I wanted to hear, but didn't, was other than money (and social validation), what exactly does a VC bring to the table ?
    This goes for angel investors like Jason Calacanis as well.

    Mark, you said you get so much emails that it almost becomes unmanageable, and the same is true when I look at Jason, you guys are all way too busy.
    I'm sure there's no lack of promises being made when it comes down to closing the deal but excuse me for being skeptical here, what assurances does an entrepreneur have that your money is actually 'better'?
    Do you have a team behind you that helps the entrepreneurs? In what way?
    How often do you visit and consult those companies? Do you limit yourself to board meetings?

    Now you could say we just don't invest in companies that need help, but when that's the case you acknowledge that funding companies is very similar to auctioning off your money and that you add no value whatsoever.

  • http://www.twitter.com/kriscobbaert kris

    I liked it. It reminds me of twi Startups, which by the way led me to this blog.

    One thing I wanted to hear, but didn't, was other than money (and social validation), what exactly does a VC bring to the table ?
    This goes for angel investors like Jason Calacanis as well.

    Mark, you said you get so much emails that it almost becomes unmanageable, and the same is true when I look at Jason, you guys are all way too busy.
    I'm sure there's no lack of promises being made when it comes down to closing the deal but excuse me for being skeptical here, what assurances does an entrepreneur have that your money is actually 'better'?
    Do you have a team behind you that helps the entrepreneurs? In what way?
    How often do you visit and consult those companies? Do you limit yourself to board meetings?

    Now you could say we just don't invest in companies that need help, but when that's the case you acknowledge that funding companies is very similar to auctioning off your money and that you add no value whatsoever.

  • http://arnoldwaldstein.com awaldstein

    Yup…classic TV stuff. Who's the show about? The guest or the host?

  • http://arnoldwaldstein.com awaldstein

    Yup…classic TV stuff. Who's the show about? The guest or the host?

  • http://arnoldwaldstein.com awaldstein

    Mark

    Would have rather got to know you better over a bottle of wine but hey, seeing folks talk while not a conversation is still a closer touch than a post, at times.

    BTW–think Foursquare, while inflated for certain, is gathering lots of attention outside of the techies. As a game of tag for young professionals, as just plain fun (2 out of 4 studio execs I met with this week are obsessed).

    Thnx for sharing.

  • http://arnoldwaldstein.com awaldstein

    Mark

    Would have rather got to know you better over a bottle of wine but hey, seeing folks talk while not a conversation is still a closer touch than a post, at times.

    BTW–think Foursquare, while inflated for certain, is gathering lots of attention outside of the techies. As a game of tag for young professionals, as just plain fun (2 out of 4 studio execs I met with this week are obsessed).

    Thnx for sharing.

  • http://bothsidesofthetable.com msuster

    Well …. I enjoyed the banter and fast pace so it didn't bother me too much. I enjoy riffing with Jason and the challenges of two ADD minds in one space ;-)

  • http://bothsidesofthetable.com msuster

    Well …. I enjoyed the banter and fast pace so it didn't bother me too much. I enjoy riffing with Jason and the challenges of two ADD minds in one space ;-)

  • http://bothsidesofthetable.com msuster

    Good questions. Feel free to contact any CEO of a company I've invested in and I think they'll tell you I go beyond the call of duty. That's why I struggle with email. I woke up at 6am this morning to conduct an interview for a top candidate for one of the companies I invested in. I've personally led all of the reference checking. I've helped two companies with their company launched including critiquing their websites, brand names and key messages. I helped another company this week with the most important customer meeting they've had to date. I got them their last big customer meeting. I went to Las Vegas to meet with a large channel partner of another company I invested in. VC could be a relaxing job if you didn't spend time helping portfolio companies. But that would be boring.

    Some VC's help a great deal. Others don't. That's why reference checking matters.

  • http://bothsidesofthetable.com msuster

    Good questions. Feel free to contact any CEO of a company I've invested in and I think they'll tell you I go beyond the call of duty. That's why I struggle with email. I woke up at 6am this morning to conduct an interview for a top candidate for one of the companies I invested in. I've personally led all of the reference checking. I've helped two companies with their company launched including critiquing their websites, brand names and key messages. I helped another company this week with the most important customer meeting they've had to date. I got them their last big customer meeting. I went to Las Vegas to meet with a large channel partner of another company I invested in. VC could be a relaxing job if you didn't spend time helping portfolio companies. But that would be boring.

    Some VC's help a great deal. Others don't. That's why reference checking matters.

  • http://bothsidesofthetable.com msuster

    re: wine – I'm sure we'll do that some day, too
    re: Foursquare – I know. But senior people who are obsessed will stop being obsessed because they “check in” game is for young people in the longer run. I've seen this happen with many senior people who aren't tech geeks. I like the company. I just think the game nature needs to evolve – and I'm sure it will. And $80 million for it's existing business is expensive for my tastes. Maybe if I had a $600 fund I'd feel differently?

  • http://bothsidesofthetable.com msuster

    re: wine – I'm sure we'll do that some day, too
    re: Foursquare – I know. But senior people who are obsessed will stop being obsessed because they “check in” game is for young people in the longer run. I've seen this happen with many senior people who aren't tech geeks. I like the company. I just think the game nature needs to evolve – and I'm sure it will. And $80 million for it's existing business is expensive for my tastes. Maybe if I had a $600 fund I'd feel differently?

  • http://arnoldwaldstein.com awaldstein

    Re: Foursquare. Well said…the check in space, life as a social game is fascinating nonetheless.

    The age factor on the the social web is a good takeaway for thought…Facebook is a monster because there is no real age gap for value and for usage. Likewise, no end in site for growth, for ad revenue and for the next frontier, the fan pages replacing promotional URLs on the open web.

  • http://arnoldwaldstein.com awaldstein

    Re: Foursquare. Well said…the check in space, life as a social game is fascinating nonetheless.

    The age factor on the the social web is a good takeaway for thought…Facebook is a monster because there is no real age gap for value and for usage. Likewise, no end in site for growth, for ad revenue and for the next frontier, the fan pages replacing promotional URLs on the open web.

  • http://prime-elite.com/ Brennan Sayre

    I agree, I think someone would be crazy to pay that type of valuation for FourSquare at this point. I think if they continue to evolve and consolidate their industry they will be a powerful force especially with the impressive team they put together.

    A lot of these other companies valuations kind of make you think twice about what some of these investors are thinking and to me I think they may be creating a mini-bubble. Bustly is a good business model and with the mobile industry continuing to grow, especially on the app side, they could bring in some serious revenue which is what a company should be based on not just the amount of users or hype like other companies.

  • http://prime-elite.com/ Brennan Sayre

    I agree, I think someone would be crazy to pay that type of valuation for FourSquare at this point. I think if they continue to evolve and consolidate their industry they will be a powerful force especially with the impressive team they put together.

    A lot of these other companies valuations kind of make you think twice about what some of these investors are thinking and to me I think they may be creating a mini-bubble. Bustly is a good business model and with the mobile industry continuing to grow, especially on the app side, they could bring in some serious revenue which is what a company should be based on not just the amount of users or hype like other companies.

  • http://twitter.com/AndyCDoyle Andrew Doyle

    T'is indeed rare to find a beast such as yourself Mark, mentor-cum-VC. I'm lucky enough to have a very senior exec of Siemens as a distant relative and mentor for my business, he will do for me as you do for your teams at the drop of a hat. You must get immense satisfaction from that, I know my mentor does but there isn't a bottle of wine big enough for me to express that back to him, any suggestions?

    Re the Gdgt valuation, that's crazy, just been on the site to look for a printer for my business, wasn't in the slightest bit useful. Business focused reviews are difficult to come by, opportunity?

  • http://twitter.com/AndyCDoyle Andrew Doyle

    T'is indeed rare to find a beast such as yourself Mark, mentor-cum-VC. I'm lucky enough to have a very senior exec of Siemens as a distant relative and mentor for my business, he will do for me as you do for your teams at the drop of a hat. You must get immense satisfaction from that, I know my mentor does but there isn't a bottle of wine big enough for me to express that back to him, any suggestions?

    Re the Gdgt valuation, that's crazy, just been on the site to look for a printer for my business, wasn't in the slightest bit useful. Business focused reviews are difficult to come by, opportunity?

  • http://www.growcomms.com/ Russell Palmer

    Jason interupted you too much. Watching your body language, especially towards the end, suggested to me that you were a little irritated at times too. Anyway, a very interesting conversation it's was interesting to me to get some more insight in the VC world.

  • http://www.growcomms.com/ Russell Palmer

    Jason interupted you too much. Watching your body language, especially towards the end, suggested to me that you were a little irritated at times too. Anyway, a very interesting conversation it's was interesting to me to get some more insight in the VC world.

  • http://lmframework.com/blog/about David Semeria

    Jason's nothing if not smart. I'm sure he'll take this feedback and run with it…

  • http://lmframework.com/blog/about David Semeria

    Jason's nothing if not smart. I'm sure he'll take this feedback and run with it…

  • http://MOVIECLIPS.com/ ZachJames

    Ha.. Nicely put. Really enjoyed the vid. thanks.

  • http://MOVIECLIPS.com/ ZachJames

    Ha.. Nicely put. Really enjoyed the vid. thanks.

  • http://lmframework.com/blog/about David Semeria

    BTW, I liked the “zigging whilst everyone is zagging” comment. If done wisely it can lead to great returns, and is subtly *not* the same as contrarian investing. It is basically underpinned by having the courage of one's own convictions, rather than merely doing the opposite of what the collective is doing.

    Also, I agree re. the enterprise opportunity. Enterprise clients are more demanding but they also have the rather useful characteristic of being willing to pay for services. I think the consumer web benefits from a disproportionate level of investor and media attention.

  • http://lmframework.com/blog/about David Semeria

    BTW, I liked the “zigging whilst everyone is zagging” comment. If done wisely it can lead to great returns, and is subtly *not* the same as contrarian investing. It is basically underpinned by having the courage of one's own convictions, rather than merely doing the opposite of what the collective is doing.

    Also, I agree re. the enterprise opportunity. Enterprise clients are more demanding but they also have the rather useful characteristic of being willing to pay for services. I think the consumer web benefits from a disproportionate level of investor and media attention.

  • http://twitter.com/dennyferra Denny Ferrassoli

    I really enjoyed listening to you I just wish it could have gone a bit longer. I'd love to see more blog posts similar to this one… A few quick jabs at what's happening in the “VC-o-sphere” and follow with your opinion. Your knowledge is always incredibly helpful and I think it would be interesting to see things through your eyes as well.

  • http://twitter.com/dennyferra Denny Ferrassoli

    I really enjoyed listening to you I just wish it could have gone a bit longer. I'd love to see more blog posts similar to this one… A few quick jabs at what's happening in the “VC-o-sphere” and follow with your opinion. Your knowledge is always incredibly helpful and I think it would be interesting to see things through your eyes as well.

  • bsrubin

    Too high valuations can be bad news not just for investors – but also entrepreneurs. A high valuation often means more money so an investor can hit their percentage targets. Russ Wilcox (Founder and former CEO at E Ink) turned my head about this – on a panel earlier this year (after their acquisition) he said 'raise the money you need (and more if you can) at the lowest valuation you can stomach'. E Ink raised tons of money and Russ likely had to turn down what would otherwise be great exits due to liquidation preferences that would leave the common out of the action.

  • bsrubin

    Too high valuations can be bad news not just for investors – but also entrepreneurs. A high valuation often means more money so an investor can hit their percentage targets. Russ Wilcox (Founder and former CEO at E Ink) turned my head about this – on a panel earlier this year (after their acquisition) he said 'raise the money you need (and more if you can) at the lowest valuation you can stomach'. E Ink raised tons of money and Russ likely had to turn down what would otherwise be great exits due to liquidation preferences that would leave the common out of the action.

  • http://twitter.com/L1AD LIAD

    on the occasions jason let you get a word in edgeways – it was a very enjoyable show
    you have a really interesting take on things.

    perhaps it should be your show…..

  • http://twitter.com/L1AD LIAD

    on the occasions jason let you get a word in edgeways – it was a very enjoyable show
    you have a really interesting take on things.

    perhaps it should be your show…..

  • http://www.adcaptcher.com/ Razvan Tirboaca

    I've watch it (great 'tips' of your interests) and I've got a question:

    Do you plan to invest in startups outside US (willing to relocate) ?

    Thanks for writing this blog and sharing so much infos.

  • razvantirboaca

    I've watch it (great 'tips' of your interests) and I've got a question:

    Do you plan to invest in startups outside US (willing to relocate) ?

    Thanks for writing this blog and sharing so much infos.

  • http://twitter.com/piplzchoice Gregory Yankelovich

    Fantastic show. Congrats! I've learned a lot in a such a short and enjoyable time. Thanks.

  • http://twitter.com/piplzchoice Gregory Yankelovich

    Fantastic show. Congrats! I've learned a lot in a such a short and enjoyable time. Thanks.

  • http://twitter.com/LadaRasochova Lada Rasochova

    Mark – This was great. I am going to show it to students in the Rady Venture
    Fund class on Monday :)

  • http://twitter.com/nuVentureGroup Lada Rasochova

    Mark – This was great. I am going to show it to students in the Rady Venture
    Fund class on Monday :)

  • http://markgslater.wordpress.com/ markslater

    We run our entire back office on Box. Awsome product.

  • http://markgslater.wordpress.com/ markslater

    We run our entire back office on Box. Awsome product.

  • http://markgslater.wordpress.com/ markslater

    you and i share the exact same view on FS mark.

  • http://markgslater.wordpress.com/ markslater

    you and i share the exact same view on FS mark.

  • http://markgslater.wordpress.com/ markslater

    yeah right.

  • http://markgslater.wordpress.com/ markslater

    yeah right.

  • http://markgslater.wordpress.com/ markslater

    I'll echo this. Its a crap shoot Kris frankly.

    You have the peel back the onion. you will get a similar story from all

    “top quartile fund..by some measurement”
    “real partner to the Entrepreneur”

    For me – and from what Mark writes – you should really seek out those with entrepreneur experience – and real experience, not name plates etc – that way – when you have an issue or a challenge – they wont be looking at it through the lens of a balance sheet – they'll relate to it and likely help solve it.

    I met with one such guy on Wednesday at Matrix Partners here on the east coast – a two time entrepreneur (a real one) – I left convinced that he really gets the challenges that are upon us with people and with product. I believe this is because we spent the better part of the 3 hour meeting beginning each sentence with… “this is how we did it here…”

    His parting comment was to assist with the beta in cambridge MA with his friends…..if we end up doing something together, i'm highly confident there will be significant “and one” involved.

    bottom line is – every entrepreneur needs help. Anyone investing not knowing this – is not someone you want.

  • http://markgslater.wordpress.com/ markslater

    I'll echo this. Its a crap shoot Kris frankly.

    You have the peel back the onion. you will get a similar story from all

    “top quartile fund..by some measurement”
    “real partner to the Entrepreneur”

    For me – and from what Mark writes – you should really seek out those with entrepreneur experience – and real experience, not name plates etc – that way – when you have an issue or a challenge – they wont be looking at it through the lens of a balance sheet – they'll relate to it and likely help solve it.

    I met with one such guy on Wednesday at Matrix Partners here on the east coast – a two time entrepreneur (a real one) – I left convinced that he really gets the challenges that are upon us with people and with product. I believe this is because we spent the better part of the 3 hour meeting beginning each sentence with… “this is how we did it here…”

    His parting comment was to assist with the beta in cambridge MA with his friends…..if we end up doing something together, i'm highly confident there will be significant “and one” involved.

    bottom line is – every entrepreneur needs help. Anyone investing not knowing this – is not someone you want.

  • http://twitter.com/rahul2084 Rahul

    great idea. Mark you should do a show! maybe a take on the current start-up and vc events followed by a guest and once a week in the beginning.

  • http://www.ecoelectrons.com/ Rahul

    great idea. Mark you should do a show! maybe a take on the current start-up and vc events followed by a guest and once a week in the beginning.