What’s the best way to navigate the fundraising climate?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Reblogging An Old Post: The Word Bubble – AVC

That doesn’t mean we aren’t investing in this cycle. We are as active as we’ve ever been. But we are investing at this stage of the cycle with our eyes wide open. And I’m writing about it in the hopes that others do the same.

What’s the best way to navigate the fundraising climate?

Josh Kopelman (Partner at First Round)
What the Seed Funding Boom Means for Raising a Series A | First Round Review

The problem is that the number of A rounds hasn’t changed. That amount of Series A capital HAS NOT increased. So, if you have 4x the number of companies with seed funding, that’s 4x the players competing for the same money… making it 4x harder to raise an A round than it was five years ago.

What’s the best way to navigate the fundraising climate?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The First Law Of Internet Physics – AVC

I told him that when you are looking at financial manias, the amplitude of the mania is inversely correlated to its duration. I like to think of these manias as waveforms. When they build slowly they last longer. When they develop overnight, they dissipate quickly as well. This rule also works pretty well for consumer internet services.

What’s the best way to navigate the fundraising climate?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What Has Changed – AVC

the momentum/late stage investors have moved from consumer to enterprise. there is a large pool of money in the venture capital asset class that is opportunistic, momentum driven, and thesis agnostic. the consumer web has matured. we are almost 20 years into the consumer web and we have large platforms that are starting to suck up a lot of the oxygen. google, facebook/instagram, amazon, microsoft, apple, twitter, ebay, yahoo, AOL, craigslist, wor… (read more)

What’s the best way to navigate the fundraising climate?

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

In 2013, it [was] whether you can break through the noise. [In 2013], there [were] probably a thousand consumer internet startups founded every quarter — how do you become one of the 1 to 3 that matter in a 7-year timeframe? Those are the kinds of objections you need to steer into at the beginning of your pitch.

What’s the best way to navigate the fundraising climate?

Mark Suster (Managing Partner at Upfront Ventures)
What Do LPs Think of the Venture Capital Markets for 2016? | Bothsides of the Table

LPs remain staunch supporters of the venture capital industry, and their investment pace into VC seems likely to hold steady for the next one to two years (barring any unforeseen negative market events). This support will start to meet headwinds in the next three to four years if our industry doesn’t find a way to drive more exits and recycle capital back into the ecosystem. Without some cash distributions, eventually LPs will become stretched. … (read more)

What’s the best way to navigate the fundraising climate?

Mark Suster (Managing Partner at Upfront Ventures)
So What is The Right Level of Burn Rate for a Startup These Days? | Bothsides of the Table

[In 2016] As I have pointed out in previous posts, 91% of VCs surveyed believe prices are declining (30% believe substantially) and 77% believe that funding will take longer than it has in the past.

What’s the best way to navigate the fundraising climate?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Mobile Downturn – AVC

In tech investing, we get booms when a new cycle emerges and downturns as it matures and consolidation of economics happens (think Microsoft in the late 80s/early 90s). The downturn is always followed by something radical and new that starts on the fringe and becomes mainstream. Timing all of these things is hard. But it is what we have to do.

What’s the best way to navigate the fundraising climate?

Sam Altman (President at Y Combinator)
What to do if a bubble is starting – Sam Altman

The only thing that is cheap during a startup bubble is capital. Make sure you have enough money in the bank, and treat this money as the last money you’ll ever raise. Focus on a path to profitability. Resist the urge to ramp up to a crazy burn rate.

Sam Altman (President at Y Combinator)
Valuations – Sam Altman

Definitely don’t start a company just because capital is available. Resist the urge to raise and spend too much money; if capital feels cheap, its psychologically easier to spend.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
When the going gets tough, the tough get going – AVC

The real reason I welcome the tougher environment is that it will make all of us better. We will have to make better decisions. The market won’t bail us out. We will have to earn our returns instead of being handed them. And I’m not just talking about investors. I’m talking about everyone working in tech startups. The going is getting tougher. Time for the tough to get going.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Understand the broader financing climate. In 2004, investors regained interest in the consumer internet again. Friendster raised a big round in 2003; MySpace started gaining traction. But with so many investors still licking their wounds from the dot-com bust, many focused on proven business models, such as advertising or e-commerce. As a result, we knew that our pitch would need to steer into investors’ biggest concern: the lack of revenue.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Reblogging An Old Post: The Word Bubble – AVC

That doesn’t mean we aren’t investing in this cycle. We are as active as we’ve ever been. But we are investing at this stage of the cycle with our eyes wide open. And I’m writing about it in the hopes that others do the same.

Josh Kopelman (Partner at First Round)
What the Seed Funding Boom Means for Raising a Series A | First Round Review

The problem is that the number of A rounds hasn’t changed. That amount of Series A capital HAS NOT increased. So, if you have 4x the number of companies with seed funding, that’s 4x the players competing for the same money… making it 4x harder to raise an A round than it was five years ago.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The First Law Of Internet Physics – AVC

I told him that when you are looking at financial manias, the amplitude of the mania is inversely correlated to its duration.
I like to think of these manias as waveforms. When they build slowly they last longer. When they develop overnight, they dissipate quickly as well. This rule also works pretty well for consumer internet services.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What Has Changed – AVC

the momentum/late stage investors have moved from consumer to enterprise. there is a large pool of money in the venture capital asset class that is opportunistic, momentum driven, and thesis agnostic. the consumer web has matured. we are almost 20 years into the consumer web and we have large platforms that are starting to suck up a lot of the oxygen. google, facebook/instagram, amazon, microsoft, apple, twitter, ebay, yahoo, AOL, craigslist, wor… (read more)

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

For consumer internet properties in 2004, because we had just gone through the dot-com winter, investors’ principal concern was whether or not you could make money.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

In 2013, it [was] whether you can break through the noise. [In 2013], there [were] probably a thousand consumer internet startups founded every quarter — how do you become one of the 1 to 3 that matter in a 7-year timeframe? Those are the kinds of objections you need to steer into at the beginning of your pitch.

Mark Suster (Managing Partner at Upfront Ventures)
What Do LPs Think of the Venture Capital Markets for 2016? | Bothsides of the Table

LPs remain staunch supporters of the venture capital industry, and their investment pace into VC seems likely to hold steady for the next one to two years (barring any unforeseen negative market events). This support will start to meet headwinds in the next three to four years if our industry doesn’t find a way to drive more exits and recycle capital back into the ecosystem. Without some cash distributions, eventually LPs will become stretched. … (read more)

Mark Suster (Managing Partner at Upfront Ventures)
So What is The Right Level of Burn Rate for a Startup These Days? | Bothsides of the Table

[In 2016] As I have pointed out in previous posts, 91% of VCs surveyed believe prices are declining (30% believe substantially) and 77% believe that funding will take longer than it has in the past.

Heidi Roizen (Operations Partner at Draper Fisher Jurvetson (DFJ))
Dear Startups: Here’s How to Stay Alive — Medium

Stop clinging to your (or anyone else’s) valuation: You know what somebody else’s fundraise metrics are to you? Irrelevant. You know what your own last round post was? Irrelevant.

Heidi Roizen (Operations Partner at Draper Fisher Jurvetson (DFJ))
Dear Startups: Here’s How to Stay Alive — Medium

Redefine what success looks like. In order to survive, it is critical to redefine what success is going to look like for you — and your employees, and your investors, and your other stakeholders.

Heidi Roizen (Operations Partner at Draper Fisher Jurvetson (DFJ))
Dear Startups: Here’s How to Stay Alive — Medium

Get to cash-flow positive on the capital you already have.

Heidi Roizen (Operations Partner at Draper Fisher Jurvetson (DFJ))
Dear Startups: Here’s How to Stay Alive — Medium

Understand whether your current investors are going to get you there. Go to [your] backers and get their commitment that they will see us through (or know that they won’t, because if they won’t, the sooner we know that, the sooner we can go out and do something about this. ) I know many VCs hate to be put on the spot about this, but I think entrepreneurs have the right to ask, and to know.

Heidi Roizen (Operations Partner at Draper Fisher Jurvetson (DFJ))
Dear Startups: Here’s How to Stay Alive — Medium

Stop worrying about morale. You know what hurts morale even more than cost- cutting and layoffs? Going out of business.

Jeff Haynie (CEO, co-founder at Appcelerator)
How to prepare for the coming startup storm — welcome to your startup life — Medium

1. Take a hard look at your finances. 2. Take a hard look at your priorities. 3. Take a hard look at your people.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Mobile Downturn – AVC

In tech investing, we get booms when a new cycle emerges and downturns as it matures and consolidation of economics happens (think Microsoft in the late 80s/early 90s). The downturn is always followed by something radical and new that starts on the fringe and becomes mainstream. Timing all of these things is hard. But it is what we have to do.