The Changing Landscape of Early-Stage Financing

Funding options and pathways for early-stage companies are changing – more rapidly now than at any time in the past quarter century.  We’ve detailed many of the changes individually in these newsletters, so it was helpful to find this brief article that encapsulates many of the more interesting shifts into a relatively comprehensive overview. Much of the activity is happening…

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Venture Capital: Behind to the Future

Venture deals in 1Q of 2011 were big money… but they were also small volume: PwC’s MoneyTree report shows 736 deals (a decrease of 6.5% from 1Q 2010) with a value of almost $5.9 billion (a jump of 14% over the same timeframe). What is most impressive is the sheer scale: fourteen different companies secured venture rounds of $50M or…

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Pandora’s VC Box

For the vast majority of its history (as captured in this 2007 article), music service Pandora was on the brink of shutting its doors.  Sheer perseverance, a tapdance in business models, the easing of regulatory and litigation risk, and the surprising success of its iPhone app – credited with doubling the number of new customers -- and the company is…

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In The Gutter, the Stars Shine Bright

There were two companion pieces recently published by venture capitalists: why VC returns are going up (WSJ) and investing at the bottom of the VC cycle (NYT).  Both of these pieces look at the amount of money committed to venture firms in 2010 and, somewhat akin to the view of the stars from the gutter, conclude that there is no…

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Venture Twits

Like many people, I am now getting more and more news and information through twitter. I've always thought that facebook is socially familiar --  because it is permission-based and synchronous, one gets information about people one knows.  However twitter is socially aspirational -- you can follow people you don't know well and who, if you met them in real life,…

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The Muddled Middle

Top tweeter Fred Wilson has two interesting posts that echo the same theme: venture investing should be much more complicated than simply finding the Next Big Thing. First, he talks about the fallacy of bimodal returns - that the two most likely outcomes for an early-stage investment are either a fast flame-out or an oversized return. As evidence, he shares…

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Venture Capital Duality

It's a theme as old as Dickens and reflects both a central tenet of biology and the basic economic belief that as an industry matures, it divides.  Fred Wilson sees the venture capital industry increasingly split into two parts: "The first VC industry is investing in software based businesses. The software VC business has been fundamentally altered by the massive…

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Venture Voodoo, all over again…

Exactly a year ago we saw media reports on venture fundraising that contorted themselves, depending if the half they saw was empty or full.  So here we go again, but now it's not even clear how much water the glass holds.  The WSJ uses data from Dow Jones to report 2010 venture fundraising to date of $7.5 billion -- which…

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Tech IPO: Comeback Kid or Merger Catalyst?

After venture-backed IPOs went MIA in 2009, VentureBeat notes the oddly imprecise appearance of 15-17 IPOs in Q2 alone, close to 2007 levels.  But even VentureBeat sounds a cautious note, since post-IPO performance has been poor, with most securities trading below their opening price.  More interesting is that the median time from firm creation to IPO in this data set…

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Summer Funding (happened so fast)…

It has long been a repeated truism that one can't raise venture capital over the summer.  Last year a VC actually looked at the data and finds both that an equal proportion of deals close in the summer months, and that his own firm's busiest closing month was August (followed, oddly, by December, which is usually seen as another holiday…

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