March 2011
1 post
New Role, New Blog
At the end of last summer, we ended up moving back to North Carolina after a couple year stint in New York City. It was an awesome ride in NYC, and I loved getting experience as a venture lender in one of the hottest startup markets in the country.
After the move, I continued to work for the Bank and with my clients in the NY area while living in NC. About a month ago, however, I began to...
December 2010
1 post
Watchrobgo:
A Candid Conversation Between a VC and a Super Angel.
Something fun I put together while playing with Xtranormal.
November 2010
3 posts
VC Asset Class Size and Performance
There’s a continuing discussion around the optimal size of the venture asset class that is perpetuated quarterly when the latest numbers come out around fundraising and performance. I attended one of the PWC Moneytree breakfasts last week and have been thinking through the numbers again.
It’s common knowledge that overall VC asset class 10 year performance numbers began to look...
Too much curation?
One of the great advances of modern Internet technology is the ability for a user to curate his or her own news so that stories of interest “seek you out”. This started for me with RSS and a simple set up in Google Reader which became a daily staple several years ago. I was able to keep up with dozens of blogs as well as some more traditional media sites for mainstream news.
...
Can great entrepreneurs have "normal" lives?
I don’t know Seth Priebatsch but by all accounts he is an uber-talented entrepreneur who has successfully started multiple companies - and here’s the catch - he’s only 21 years old!
Yesterday I saw this article on CNN.com and it sparked a thought which I’ve been tossing around in my head for a while now. Namely, is it possible for really successful entrepreneurs to build...
October 2010
3 posts
Venture Debt and Warrants
Recently a question was posed on Quora on “Why do venture debt shops take warrants?”
My answer, which I posted on Quora:
In general, venture debt shops are divided between the bank lenders (SVB, Square 1, etc) and the captive debt funds. From the venture bank perspective - the companies getting venture debt from a bank typically can’t access a debt facility from a...
How Much Money Should My Startup Raise?
Couldn’t agree more with what Nivi of Venture Hacks said in his Quora post on the subject:
Raise less if you want to keep your valuation down and keep the option open for an early exit where everyone (investors, employees and founders) makes money.
Raise more if you’re here for the long term and you want to protect your company from poor funding environments or hiccups in your growth....
When Life Calls
I started this blog in early 2010 when I realized that there was little to no public information from industry insiders about how venture-backed companies raise debt. There are now a plethora of VCs who blog - but as far as I could tell, there were very few (if any) venture bankers - or venture debt fund guys/gals - who were talking shop on the Internets.
So I threw a few posts up about venture...
July 2010
1 post
“In my talk with John Battelle yesterday at Geo Loco, where I said some...”
– Some seriously powerful - yet simple - thoughts from Fred on what matters in a venture investment. Awesome stuff.
May 2010
3 posts
“That cornucopia of content appears to be turning YouTube — considered by many to...”
– From the NY Times article about YouTube’s 5th birthday.
Hard to believe that YouTube, this fixture of modern cultural existence, has only been around for 5 years. And it seems to only be growing faster and faster - amazed that they’ve doubled video views in the last 7 months.
And...
Ask me Anything
I’m joining the growing ranks of bloggers who are open to answering questions about anything and everything. You’ll see now on the right side bar a “Ask me Anything” link that uses the Tumblr Ask feature.
So bring on the questions and I’ll try to do my best to answer them.
Are Venture Banks Strategic Partners?
In my conversations with various venture capitalists about venture debt, I have sometimes heard VCs say, “we think what you’re doing is great, and when our companies need debt we’ll be sure to introduce them to you…but right now they don’t need debt and we don’t see their banking relationship as a strategic one which requires our input.”
It’s a...
April 2010
3 posts
The Power of Simple
Over the last few months I’ve been thinking a lot about a framework for the way I look at the world. I think it applies across both personal and professional facets of life, and across a multitude of layers within these buckets. The irony is that this worldview with seemingly infinite reach is inherently not complex; rather, it’s that there is Power in Simple.
Before I go on I want to...
Customer Service in the Age of the Internet
In the last week I’ve been the witness to two divergent but equally telling stories of customer service from two companies who have nothing to do with each other. I was not involved directly with either customer service interaction – rather, I heard about the experiences through old fashioned word of mouth – which makes the instances all the more valuable for sharing and learning from.
The first...
Young VCs & Performance
I was talking with one of my friends who is an associate at a large PE fund and he brought up the interesting point that he has “no idea whether or not my bosses think I’m doing a good job.” He believes he’s performing and is putting in the requisite time in the office - but at the end of the day, it’s unclear how he (as an associate) is being judged by the partners...
March 2010
6 posts
The iPad is Revolutionary, as even a "Normie" can...
The first iPad units are shipping and we’re surely headed for a deluge of opinions from far and wide about what the iPad means as a product and how successful it will be. And I’m not just talking about opinions from the geek tech rags which have covered these topics ad nauseum already. Real mainstream America wants to know – as evidenced by several of my friends who have asked for an opinion on...
Venture Debt: How covenants can be good, bad or...
In my prior post I gave an overview of the theory behind financial covenants in venture debt deals and some basic examples of the type of covenants used by lenders. With this post we will take a deeper look at what happens when there is a covenant trip and the pros and cons of venture debt deals with covenants.
When a covenant violation occurs (often called “tripping” a covenant), it is...
Venture Debt: Let's Talk Covenants, Part I
There’s no way to talk about venture debt without bringing up the notion of financial covenants. The simple mention of the word “covenant” evokes a connotation of doom and fear in the hearts of many entrepreneurs and equity investors alike - perhaps in part caused by horror stories of overzealous lenders using a covenant trip to invoke remedies (read: sweep cash or foreclose on assets) which led...
Venture Debt: The Implicit Contract between...
In my first two posts on Understanding Venture Debt, I provided a general overview of different types of venture debt facilities and a brief look at the banks and funds who are actively involved in the space. With this post I hope to shed some light on one of the less-obvious but highly important aspects of the venture debt landscape: the “implicit contract” between venture capitalists and...
3 tags
When Tech Writers Talk Business
Like a lot of people in the VC/tech world I spend a good amount of time each day scanning the various online tech rags for the latest industry news. While these sites are generally great sources of information and, more importantly, instigators of conversation, they are also frequently the source of frustration when the focus turns from technology to attempting to describe business prospects or...
2 tags
Understanding Venture Debt - Part II: Banks and...
In my first post in this series about Understanding Venture Debt, I provided a quick overview of the various types of debt facilities available to venture backed companies. With this post I will provide an overview of two types of institutions which provide the debt financing and the relative cost of capital of each, as this plays a vitally important role on overall venture debt deal terms.
The...
February 2010
2 posts
2 tags
Understanding Venture Debt - Part I: What is...
One of the great values of the web is the democratization of information – anyone can look up anything at anytime and likely find an answer. Within the entrepreneurial world, and more specifically the world of venture capital, this has led to a surge of transparency in an industry which has historically had a bit of a black-box or club mentality.
Today there are a ton of fantastic resources out...
4 tags
If you build it, they may come - but will they...
I was reviewing a business plan/slide deck last week for a consumer web/technology entrepreneur who is beginning conversations with investors regarding a Series A round of funding. The founder has made amazing progress to date, building a scalable technology platform, several branded sites, and some notoriety in the space he’s attacking. When you get into the details and realize that the founder...
January 2010
2 posts
2 tags
2009 Venture Capital Stats: What's the Real Story
The 2009 venture capital numbers are out, and if you believe the headlines, the news is not good. By now many are familiar with the raw numbers - $17.7B total invested by VC firms in 2009, down 37% from 2009. As one who is involved in the industry, I’m continually frustrated and surprised by coverage and analysis related to aggregate VC financing statistics.
There is a general tendency among...
4 tags
So What is a Venture Banker?
I love what I do.
It’s nice to be able to say that. I’ve been on the other side of the happiness equation, pounding the phones doing cold calls for a venture-backed start-up. I was young and eternally optimistic and had just the right amount of naivete and enthusiasm to think I could change the world by selling a SaaS CRM application that was “way better than...