Written by Jay Turo on Monday, January 4, 2010
Look to the right for a fantastic chart that tracks investment returns for various asset classes over the past 10 and 20 years.
A few points immediately jump off the page:
So that is past. What will the next 10 years hold? Here are three predictions:
My answer - yes but. Yes - because the 2 key factors that drive angel investing outperformance remain the same. One, returns have to be very high as compensation for illiquidity - most angel investments are in private-held, small companies years away from a sale or an IPO. And two, returns are high as compensation for the EXTREME variance of the asset class.
Now for the but. While the asset class returned an average of 30%+, it was attained via the sum of a very, very few winners (aka Google), and lots and lots of losers.
Quite simply, a few investors made a killing, and a giant many got killed.
But here is where it gets interesting. The one thing that has and will continue to drive angel investing returns - namely technology advancements - now allows investors, for the first time, access to smoothed-out returns (i.e. higher likelhood of hitting the 30% average versus the extreme highs and lows).
Written by Dave Lavinsky on Friday, January 1, 2010
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Written by Dave Lavinsky on Tuesday, December 29, 2009
It's really easy to make fun of big businesses. With all their bureaucracy, they tend to move slowly. And they tend to be difficult to work with.
Written by Andrew Bordeaux on Tuesday, December 22, 2009
Most of us are familiar with Ivan Pavlov and his famous Pavlov dog experiments.
2. Make room for those activities on your schedule (and do whatever you have to do to get it done, including scheduling meeting with yourself or working offsite)
3. Focus on achieving those things that need to be done. Don't let yourself get distracted.
4. Get organized.
5. Be disciplined. Do the things you need to do. Don't waste time on rituals like checking email, getting beverages, and socializing with co-workers in the morning.
6. Get back the attitude you had when you first started your company. By focusing on the high value-add objectives and freeing up your time from monotonous and low value-add activities, you will feel a renewed energy and excitement for your business.
To hear a clip of the interview, click the blue triangle on the player below.
Growthink University members can listen to and/or download the full interview here: http://www.growthinkuniversity.com/members/383.cfm
Written by Jay Turo on Monday, December 21, 2009
Barring a massive rally between now and the end of the year, the "00's" will be the worst decade in the history of the stock market.
Very, very tough. Trillions lost. Retirement plans delayed. Heartache and heartbreak.
Given the amazing and world-changing advances in human productivity and connectivity over the last 10 years, may the venture capital industry, and correspondingly the world of emerging technology - re-find its return footing.
This falls into the category of the equity markets being "due" for a big returns decade. A simple, but defensible premise.
3. May The Nation's Entrepreneurs Lead The Way. Never has there been more productive, focused, mature, and cause-driven entrepreneurs alive in the world than there are today.
Take a look at the below list of the top performing stocks of the past 10 year (1999-2008):
Symbol Company 10 Yr. Cum. Return
And you know what? Come 2019 there will be TEN DIFFERENT obscure and small companies that will make this list.
Noone knows who these companies will be. But to attain alpha, you MUST find them.
One thing is for sure - a few investors WILL find them.
The more interesting question of course is - will you be one of them?
I look forward to your attendance and feedback.
Written by Growthink on Friday, December 18, 2009
Looking for venture capital? Or looking for great insights to grow your business?
1. Ed Sim (Dawntreader Ventures)
Inspirational video for entrepreneurs
"Without a bigger sense of purpose, it is hard to be an entrepreneur and stick through the inevitable tough times that will come your way."
2. Josh Kopelman (First Round Capital)
Board Transparency - and the Implicit Web
Discusses the repurcussions of accessible data and the necessity of transparency with your Board of Directors.
3. Jeremy Liew (Lightspeed Venture Partners)
Why the Economics of Social Gaming are So Attractive to Investors
Trend to watch for in 2010: Social Gaming, this article tells you why.
4. Seth Levine (Foundry Group)
Want more jobs? Support Entrepreneurship
Levine recommends taking the steps included in his blog article to boost the economy and create jobs.
5. Chistopher Allen (Alacrity Ventures)
Community by the Numbers, Part III: Power Laws
What defines the success of a community and how can we predict this?
6. Fred Wilson (Union Square Ventures)
Some Thoughts on Email After Dealing with 500 Emails
An inside peak into VC email response.
7. Bill Gurley (Benchmark Capital)
What is Really Happening to the Venture Capital Industry
VC Bill Gurley takes readers through an overview of the ups and downs of 2009.
8. Paul Graham (Y Combinator)
Startups in 13 Sentences
If VC Paul Graham could tell startups 13 things, these would be them.
9. Dave Hornik (August Capital)
Innovation Doesn't take a Vacation in an Economic Downturn
Innovation isn't dependent upon finance.
10. Brad Feld (Foundry Group)
VC Behavior in Board Meetings
Advice on putting the phone down, and paying attention at board meetings.
11. David McClure (Founders Fund)
Startup Metrics that Matter
This vlog teaches new entreprenuers what metrics really matter in the early stages of their development.
12. Erick Schonfeld (Techcrunch)
Venture Funds Raise Only $1.6 billion in 3rd Quarter. Most of That Went to Vinod Khosla
A quarterly overview on VC funds raised from Q3 2007 - Q3 2009. $750 million of the $1.6 billion raised went to Khosla ventures.
13. MG Siegler (Techcrunch)
The Cost of FriendFeed: Roughly $50 million in Cash and Stock
A successful exit for a small social media startup; FriendFeed was purchased in August 2009 for $50 million. Highlights the payout for initial investors.
14. Steve Fredrick and Don Rainey (VentureBeat)
Venture Capital 2009: The Year in Review
Highlights included 3 venture-backed IPOs in Q3 2009, an expanding start-up world and the reduced cash required to start companies.
15. Marc Andreessen (Andreessen Horowitz)
Introducing Our New Venture Capital Firm Andreessen Horowitz
Announcing a new $300 million fund for technology startups. Investing between $50,000 and $50 million, this blog post outlines EXACTLY Andreessen Horowitz's requirements.
16. Laura Grimmer (VentureBeat)
5 Ways VC firms Can Stop Shooting Themselves in the Foot
Excellent advice for VCs looking to grow their business and expand the pipeline of deals.
17. Peter Rip (Crosslink Capital)
What's Broken - Venture Capital or Venture Perceptions?
Refutes the idea that venture capital is the worst place to be because the "old model doesn't work."
18. Rick Segal (JLA Ventures)
The "Take the Deal or Not" Debate
Questions every person should ask themselves before they take a deal with a venture capital firm.
19. Mike Hirshland (Polaris Venture Partners)
More on the Founder/CEO Question
When should the founder step aside as CEO for the greater good of the company?
20. Jeff Bussgang (Flybridge Capital Partners)
Should Entrepreneurs Be More Like Teenage Girls?
Recommendations for a growth mindset and success for reaching goals as an entrepreneur.
21. Tim Oren (Pacifica Fund)
Silicon Valley's Dirty Little Secret
What are the long term social and political impacts of Silicon Valley? Some insightful thoughts into Silicon Valley culture.
22. Eric Friedman (Union Square Ventures)
99.99% (Or It's Totally Going to Happen But Isn't Signed Yet)
Until a contract is signed - it's not a done deal.
23. Mike Speiser (SutterHill Ventures)
Better Incentives Can Improve Online Advertising
Publishers should incentivize advertisers to create good content. Brings up the idea of ad content that enhances, rather than diminishes, user experience.
24. Matt McCall (DFJ Portage Venture Partners)
Do You Need to Be in the Valley?
Addresses the age old question of whether entreprenuers in the tech space need to be in Silicon Valley to succeed.
25. Stu Phillips (Ridgelift Ventures)
Venture Capital - Time for V3.0
Stu Phillips raises an important point - VC2.0 which began with the Internet and resulting bubble - is out. A new system needs to be created.
26. Jason Caplain (Southern Capitol Ventures)
Include Sales in your Strategy
Entreprenuers need to connect with their buyers early on; sales is an integral part of EVERY company.
27. Jason Mendelson (Foundry Group)
Senator Dodd - Making it harder for small businesses to get funded
A VC outlook on the legislation changes proposed that will alter the ability for companies to get financed.
28. Nic Brisbourne (Esprit Capital Partners)
Financial Forecasts in a Business Plan
"Any business plan that has financial forecasts under year 1, year 2, etc. rather than 2009, 2010, etc. is too early stage for us." Brisbourne urges entrepreneurs to be precise in their projections and have a definitive timeline for revenue.
29. Albert Wenger (Union Square Ventures)
Hiring: Lack of Diversity Becomes Self-reinforcing
Historical hiring practices may affect the ability to bring on diverse, younger talent.
30. David B. Lerner (Totius Group, Columbia Venture Lab)
Getting from Zero to One in Your Startup: Founder Compensation Should be Slim to None
An important point for every founder to konw - your investment is on the back end - not from annual salary.
31. Larry Cheng (Fidelity Ventures)
Succeeding with a Potential Single Point of Failure
Two success stories of companies who exited in spite of single point of failure possibilities.
32. Raj Kapoor (Mayfield Fund)
Prediction: Social Nets Will Make More Money Off-site vs On-site their Websites
Interesting take on how social networks will continue to monetize.
33. Will Price (Hummer Winblad)
The importance of being present in the moment AND enjoying it.
34. Howard Morgan (First Round Capital)
UNI- Acquired Tastes in Food and Investing
Morgan talks about business plans that excite him as a potential user - not as an investor.
35. Mark Suster (GRP Partners)
How to (re)Approach People (Advice on the Eve of LeWeb)
"Business etiquette tips for dealing with VCs and Corporates at Conferences"
36. Christine Herron (First Round Capital)
What's the Secret Success of Mint.com? The Real Numbers Behind Aaron Patzer's Growth Strategy
How much does it take to get started? When should you raise money? Interview with Mint.com CEO opens up and answers these questions.
37. Fred Destin (Atlas Ventures)
The Arrogant VC: A View from the Trenches (full length version)
Destin posts the answers to "tell me why VCs are disliked by entrepreneurs"
38. Rob Day (@Ventures)
Conventional Wisdom and Cleantech Venture Capital
Day clears up what Cleantech is, and in which firms "Cleantech VCS" invest.
39. David Feinleib (Mohr Davidow Ventures)
When You Are the Product
A reminder that, regardless of the technology or device, when pitching investors you are pitching yourself.
40. Bijan Sabet (Spark Capital)
Creating an Operating Plan for 2010
Advice for any year really, on creating an operating plan that works.
41. Phillippe Botteri (Bessemer Venture Partners)
Impact of the Recession on SaaS Sales & Marketing Productivity
How has the recession affected SaaS? Not much.
42. Andrew Parker (Union Square Ventures)
How does Microsoft's Bing plan to compete? By paying customers not to compete.
43. Mark Peter Davis (DFJ Gotham Ventures)
Bootstrapping vs. Venture Funding
The pros and cons of two finance methods for startups.
44. Allen Morgan (Mayfield Fund)
Co-Founders vs. Early Employees
Quick thoughts on the differences between the co-founders and early employees.
45. James Chen (CXO Ventures)
Don't Bite the Hand that Feeds
This lesson applies to both business and government: Don't bite the hand that feeds you.
46. David Aronoff (Flybridge Capital Partners)
Why do companies fail?
47. Max Bleyleben (Kennet Partners)
The Hunt for Growth Is On
Tech success is creeping into Europe and other markets as the US emerges from recession.
48. Jason Ball (Qualcomm Ventures Europe)
Pitch your startup: VCIC 2009
2009 awards have been given, but 2010 awards are just around the corner.
49. Don Rainey (Grotech Ventures)
The 7 Troublemakers you meet in a Startup
7 personality archetypes an entrepreneur can expect to meet when starting a company.
50. Peter Haas (Founder, AIDG)
In Social Enterprise, Force Yourself to be an Entrepreneur First
Ten rules for starting an international service organization.
Written by Dave Lavinsky on Friday, December 18, 2009
This video reveals a common mistake entrepreneurs make when shopping for capital.
Written by Dave Lavinsky on Wednesday, December 16, 2009
This video will help you raise capital more confidently and quickly.
And if you enjoyed that video, you may be interested in my new online training course, Secrets to Raising Capital, where I give you step-by-step instructions on exactly how to raise 40 different types of capital to grow your business.
Written by Dave Lavinsky on Tuesday, December 15, 2009
Because of all the negative news in the financial markets, this may come as a surprise to many, but last week, over Half a Billion dollars was given to startups and growing companies.
That's right. In venture capital alone, over $200 million was given out. Startups like Ansca Mobile (mobile application firm) and Branders.com (online seller of promotional items) raised $1 million and $5 million respectively.
And early-stage companies like Lanyon (management solutions to the hospitality industry) and Seeking Alpha (financial commentary website) raised $7 million and $10 million respectively.
And the angel market was also booming from coast to coast. Next Big Sound in Boulder, CO (music services) raised $1 million, PBworks in San Mateo, CA (wiki hosting) raised $650,000 and FitnessKeeper in Boston, MA (fitness platform) raised $400,000 among many, many other deals.
And hundreds of other startup and early stage companies raised debt financing and funding from numerous creative and alternative sources.
So, money IS out there. And lots of it.
The key is, as it has always been, to know what sources of financing are right for you and how to get them.
My brand-new capital raising course - "The Secrets to Raising Capital" - shows you exactly how to do that.
This 14-week course covers 40 sources of capital. It teaches you what they are; helps you determine which sources (note that "sources" is plural on purpose) of capital are right for your business, and most importantly, gives you step-by-step action plans to raise each one.
Click here to learn more about my new course.
Written by Jay Turo on Monday, December 14, 2009
Showing once again where our modern media priorities are, shoved off the front page last week by more lurid Tiger Woods talk, was the very under-reported but potentially game-changing proposal that President Obama made last week regarding eliminating all capital gains taxes on startup and small business investments.
There are so my ways that this is good for small business, for America, and for private company investing. Let me note three:
1. Simple Fairness. It has been a very tough couple of years for startups and small businesses. Unlike automakers and big banks, the nation's entrepreneurs were left to completely fend for themselves through the recent economic tsunami.
And, as befits a class of people that can only be described as modern-day action heroes, given their massive and unsung contributions to the American way of life, the entrepreneurs among us have handled their adversities as they always do - with stoicism, with grace, and with the simple coda that nothing is immutable to hard work.
But it is beyond time that someone lend them a hand. If, miracle of miracle, Congress follows the President's lead and makes this proposal law (and given how lower capital gains has been a Republican mantra since I was in high school, the probability is high that it will), it will unleash a huge investment bull market across the entrepreneurial landscape.
And let's not forget how overdue this is - for the 1st time in history this last decade will go down as the only one where more money was invested INTO venture capital than was earned out. While early-stage private equity investing did much better in the decade than VC's, it has still been a very rough go of it.
The hope here is that this tax break will be a catalyst for capital move from do-nothing and know-nothing investments like gold and into productive ones like technology startups and small businesses.
2. Startup and Small Business Tax Breaks Spur Innovation. The proposed capital gains tax break, when coupled with the proposed tax credits for small business hiring and investment, will provide a much-needed boost to entrepreneurial risk-taking and innovation.
Remember, this information age of ours is a story of "guys in garages." Gates and Allen, Jobs and Wozniak, Page and Brin.
Similarly, the big ideas of the coming "Energy Age" - in battery technology, in cold fusion, in greenhouse gas reversal, will NOT come from the federal government or big business.
Why? Because very simply the most creative people do NOT want to work within any kind of bureaucracy. Rather, they will come from the yet to-be-founded startup, that fluid and flexible small business about to break-out.
Anything that makes it easier for these innovators to have cheaper access to capital - which a waiver of the tax on capital gains effects - is a HUGE positive.
3. Let's Get the Best and Brightest to be More Entrepreneurial. Finally and tied to this point, the central economic and investment issue of our age is not inflation, it is not big bank bailouts, it is not health care reform, it is not Democrat versus Republican and it is not liberal versus conservative.
No, it is what can and needs to be done to spur the "best and brightest" among us to be more entrepreneurial and more successful when they are.
Why? Because entrepreneurs create the innovations that create the jobs that create the wealth that create our whole, cherished American way of life.
So we need everyone in positions of influence in our society - government, media, education, entertainment - to stand-up for the entrepreneurs.
The proposed capital gains tax break in this context is as important in what it signals as its direct stimulus effect.
And for you investors out there, the best thing is that if YOU do the best thing for the economy and the country and invest in entrepreneurs, well guess what?
If you do it right, you will make far more on your money that you could ever imagine.
This is called doing well while doing good. And it is highly recommended.
I look forward to your attendance and feedback.
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