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VCs eating our own dog food: Using technology and analytics to make better investments

(To see the video above, please click the image, and then click on the Play button.) Private equity and venture capital investors are copying our sisters in the hedge fund world: we’re trying to automate more of our job.  When I was single, I registered for (a lot of) dating websites. When I met [...continue reading]

Free money for your impact tech startup

Congratulations!  You’ve decided to launch a technology-enabled startup with a positive social impact!  Nearly every major Silicon Valley venture-capital firm has now invested in a B Corp; maybe you will be one of them! Now the bad news: some venture capitallists have a bias against startups with [...continue reading]

Use agile budgeting to manage your cash

Instead of budget approvals, monitor key metrics and give managers more flexibility Traditional budgets can be destructive and a huge waste of time. How should a growth company manage their budget?  Does the annual budget approval process even make sense in a fast-moving firm? My friends who are [...continue reading]

How to choose an investment banker…or replicate one

Should you hire an investment banker?  And if so, who? The good news: even if you are a small company and can’t afford a banker, you can synthetically and cheaply replicate a banker. That’s part of the value proposition of an institutional VC; I have been the (unpaid) investment banker for many [...continue reading]

Fundraising Hacks: What type of capital should you raise, and how do you meet investors?

How do you decide which investor you should target and raise capital from?   I wrote recently about Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC?  Since then, I’ve talked with a number of other firms, and greatly expanded my database: Who are the [...continue reading]

Should you raise traditional VC or Revenue-Based Investing VC?

 Most founders who are raising capital look first to traditional equity VCs. But should they?  Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use.  RBI [...continue reading]

Should your new VC fund use Revenue-Based Investing?

You’re working on launching a new VC fund; congratulations!  I’ve been a traditional equity VC for 8 years, and I’m now researching Revenue-Based Investing and other new approaches to VC. The question I’m asking myself: should a new VC fund use Revenue-Based Investing, traditional equity VC, or [...continue reading]

Why are Revenue-Based VCs investing in so many women & underrepresented founders?

A new wave of Revenue-Based Investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt. Many are reporting that they’re seeing a more diverse pool of applicants than traditional equity VCs… even though [...continue reading]

Who are the major Revenue-Based Investing VCs?

So you’re interested in raising capital from a Revenue-Based Investor VC.  Which VCs are comfortable using this approach? A new wave of Revenue-Based Investors (“RBI”) are emerging.  This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC.  [...continue reading]

Revenue-Based Investing: A new option for founders who care about control

Does the traditional VC financing model make sense for all companies? Absolutely not. VC Josh Kopelman makes the analogy of jet fuel vs. motorcycle fuel. VCs sell jet fuel which works well for jets; motorcycles are more common but need a different type of fuel.  A new wave of Revenue-Based [...continue reading]

In Venture Capital, Should You Be a Momentum or a Value Investor?

  As a venture capitalist, should you be a Momentum or a Value investor? To simplify, there are two classic approaches to public markets investing.  The first is Momentum Investing, “a strategy to capitalize on the continuance of an existing market trend”, which usually meaning that the [...continue reading]

Are you hiring a cultural fit? Do you actually want to?

Who should you hire: the superstar with great skills who feels like a poor fit with the culture, or the person with weaker skills but who fits in culturally?  Even though I believe in hiring the stranger, cultural fit really matters. I once had an interview set up with a candidate who looked [...continue reading]

A family-friendly work environment is a powerful recruiting and retention tool

My wife and I have a lot of conversations about work-life balance, or as I usually think of it, making sure I don’t use up too many “spouse points”.  Many early-stage companies do not have these issues top of mind, because so many founders are pre-children. However, even people without children [...continue reading]

Face-to-face meetings are important, but written collateral is mandatory for closing the deal

I’ve noticed a lot of founders raising capital prefer to have face to face meetings, as opposed to answering questions in writing.  Some don't want to share a deck in advance of a meeting. When you’re fundraising, I suggest keep in mind you are accomplishing different goals.  The goal of all [...continue reading]

The investment committee rejected you; what does that actually mean?

One of the most common ways a venture capitalist rejects you is a variation of, “I love you, I love your company.  I brought it up to the investment committee (“IC”)....but they turned it down.” What does that actually mean? Is this the business equivalent of telling a flame, “It’s not you, it’s [...continue reading]

Your startup is dying — now what?

“Mann Tracht, Un Gott Lacht” (“Man Plans, and God Laughs.”) We hope for the best, but are forced to plan for the worst.  Almost all VCs will have companies that fail. The CEO comes to us.  She has 3 months of cash left. Existing investors have said they’d be glad to invest…if she gets a [...continue reading]

How to ensure everyone agrees on the contract you just signed

When we negotiate a deal, the paperwork is intended to document the deal.  If necessary, the paperwork is supposed to ensure that all parties keep their commitments. But I admit it: I’m paranoid.  How do I ensure enforceability?  We are investing millions of dollars based on a few pieces of [...continue reading]

Why venture capitalists are investing in international startups

Why are more US VCs investing in international startups? Take a look at The Fortune Unicorn List: of the top 100 most valuable unicorns in 2016, 39 are currently based outside of the United States.  While fundraising of US VCs has dropped slowly as a percentage of global limited partner [...continue reading]