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Some Reflections on VC Investment Decisions

Both Sides of the Table

I know I can’t be in every deal and I know that the easy part of being a VC is writing the first check in a deal. And when the press releases and the attaboys wear off it still comes down to real work. If an accelerator is writing you they’re also writing 25 other VCs. I don’t. Pay attention.

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Invest in Lines, not Dots

Both Sides of the Table

Note that “performance&# on my chart is a loose term for my definition of perceived progress that can take the form of product, customer adoption, employees, investors, press or whatever. Investors are writing checks for dots. Entrepreneurs – you might be pumped up with that super quick round done at a high price.

Invest 411
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The Authoritative Guide to Prorata Rights

Both Sides of the Table

For starters some funds are small and thus while they put $750k into your company to own 10% of your company they might not be able to write another $2 million if you then raise a $20 million round (10%). New investors sometimes want early investors to put in money to “prove” they have confidence in the new price.

Guide 336
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Why Early-Stage VCs Should Be Careful About Intros from Bankers

Both Sides of the Table

What price? The only way for a company to be overvalued is if there’s someone willing to pay that price. ” Therefore one goal of Y Combinator appears to be “get the highest price and best terms.” They do this because they have amazing skills at writing business plans. What stage? ” Fair play.

Startup 361
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The Importance of Proprietary Deal Flow in Early-Stage VC

Both Sides of the Table

What price? The only way for a company to be overvalued is if there’s someone willing to pay that price. ” Therefore one goal of Y Combinator appears to be “get the highest price and best terms.” Or maybe I’m paying the highest price? What kind of deals should I be doing? What stage?

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On Bubbles … And Why We’ll Be Just Fine

Both Sides of the Table

I will write more about this in the next 2 weeks. I suppose I should have imagined that this line would get more press than all other comments combined. But that doesn’t mean that people are paying rational prices as investors based on intrinsic value. I believe that. It is great for entrepreneurs and great for VCs.

Pricing 309
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What Angel Investing & Florida Condos Have in Common

Both Sides of the Table

I pointed to several Economist articles I had read that mapped historical prices of real estate for 400 years and how on average property values grow at no more 1.5% above inflation yet in many markets in the US & Europe prices were rising at 10-25% per year. We jockey to make sure the press release has our names on it.

Invest 299