Fellow VCs: Here’s Where to Invest $1B+

A couple weeks ago my colleague Dimitri Dadiomov published a post on NextView’s “View From Seed” blog which answered the question “Should we take Harvard MBAs Seriously as Startup Founders?”  The (obvious) answer of “yes” he supported with comprehensive research about the entrepreneurial activity coming out of Harvard’s business school.

We knew that it was formidable, but the sheer number of founders, companies founded, dollars raised, and (early) exits from HBS founders over the past six years impressed us.  From the group, over 260 founders have launched around 90 startups, raising more than $2.5B in capital.  Notable names like BirchBox, Blue Apron, Cloudflare, and Rent the Runway were launched by these MBA grads.  Successful exits include Wildfire (to Google for $350M), Behance (to Adobe, $150M), and RentJuice (a NextView-backed company co-founded by David Viveroto Zillow for $40M).  It wasn’t a complete surprise to my partners and me at NextView, though, as in addition to our RentJuice investment, we have backed a number of other Harvard MBAs who started companies straight out of school including InsightSquared (co-founded by Fred Shilmover, raising $27M to date) and ThredUp (co-founded by James Reinhart and Chris Homer, raising $50M to date).

But what was surprising, at least initially, was the apparent downturn in the graph after a peak of activity in 2011.  Has something gone wrong in the past couple years?

 HBS1

Quite the contrary.  Rather, as Dimitri noted, we’re at the beginning of the cycle for these recent classes.  On the number of founders and companies:

  • Some people are likely in stealth mode, and haven’t self-identified themselves currently as founders, which is merely a known bias in the study.
  • Some alums will work a couple years prior to starting their companies, rather than doing so right out of school. These individuals and companies are just being started now or will be shortly, and will likely bring up the count for these years if looked retrospectively a couple years from now.
  • The class of 2014 shows no sign of slowing down, at least when you see that 41 founders have already self-identified. It’s just one data point, but it certainly makes the classes of 2012, 2013, and 2014 feel anything but dormant.

On the metric of capital raised, the rationale for the smaller figures is the same as the two points above, coupled with a more important fact that earlier in a company’s life-cycle it’s almost by definition likely to have raised smaller amounts.  Pursuing the underlying data, it’s as you’d expect that most of the rounds raised so far are Seeds and Series As, and many haven’t even raised any meaningful capital at all.  And, of course, the larger growth rounds just haven’t happened yet since the startups aren’t mature enough to warrant 8-figure capital raises.

And therein lies the $1B investment opportunity: funding Harvard Business School startup founders from 2012-2014 and beyond.

HBS2

Even if we remove 2011 as a potential outlier, that billion-dollar estimate is still a very resonable prediction.  The dotted red line above shows the average amount of capital raised by HBS founders between 2008 and 2010: $416M per year.  Take that as a proxy, and it’s fairly safe to project that the HBS classes from 2012 onwards will likely raise a $1B in venture capital over the next few years.  It’s up to seed funds like ours at NextView Ventures to identify and work together with these entrepreneurs for the early capital raises and catalyzing their best possible start.  And larger venture capital funds seeking to deploy meaningful capital should look no further… my fellow VCs, these 88 (recently graduated) HBS founders and their ventures are ripe opportunities for investment.  The early exits from their predecessors are a strong leading indicator that’s they’re going to be very fruitful.

 

The post Fellow VCs: Here’s Where to Invest $1B+ appeared first on GenuineVC.

Fellow VCs: Here’s Where to Invest $1B+

A couple weeks ago my colleague Dimitri Dadiomov published a post on NextView’s “View From Seed” blog which answered the question “Should we take Harvard MBAs Seriously as Startup Founders?”  The (obvious) answer of “yes” he supported with comprehensive research about the entrepreneurial activity coming out of Harvard’s business school.

We knew that it was formidable, but the sheer number of founders, companies founded, dollars raised, and (early) exits from HBS founders over the past six years impressed us.  From the group, over 260 founders have launched around 90 startups, raising more than $2.5B in capital.  Notable names like BirchBox, Blue Apron, Cloudflare, and Rent the Runway were launched by these MBA grads.  Successful exits include Wildfire (to Google for $350M), Behance (to Adobe, $150M), and RentJuice (a NextView-backed company co-founded by David Viveroto Zillow for $40M).  It wasn’t a complete surprise to my partners and me at NextView, though, as in addition to our RentJuice investment, we have backed a number of other Harvard MBAs who started companies straight out of school including InsightSquared (co-founded by Fred Shilmover, raising $27M to date) and ThredUp (co-founded by James Reinhart and Chris Homer, raising $50M to date).

But what was surprising, at least initially, was the apparent downturn in the graph after a peak of activity in 2011.  Has something gone wrong in the past couple years?

 HBS1

Quite the contrary.  Rather, as Dimitri noted, we’re at the beginning of the cycle for these recent classes.  On the number of founders and companies:

  • Some people are likely in stealth mode, and haven’t self-identified themselves currently as founders, which is merely a known bias in the study.
  • Some alums will work a couple years prior to starting their companies, rather than doing so right out of school. These individuals and companies are just being started now or will be shortly, and will likely bring up the count for these years if looked retrospectively a couple years from now.
  • The class of 2014 shows no sign of slowing down, at least when you see that 41 founders have already self-identified. It’s just one data point, but it certainly makes the classes of 2012, 2013, and 2014 feel anything but dormant.

On the metric of capital raised, the rationale for the smaller figures is the same as the two points above, coupled with a more important fact that earlier in a company’s life-cycle it’s almost by definition likely to have raised smaller amounts.  Pursuing the underlying data, it’s as you’d expect that most of the rounds raised so far are Seeds and Series As, and many haven’t even raised any meaningful capital at all.  And, of course, the larger growth rounds just haven’t happened yet since the startups aren’t mature enough to warrant 8-figure capital raises.

And therein lies the $1B investment opportunity: funding Harvard Business School startup founders from 2012-2014 and beyond.

HBS2

Even if we remove 2011 as a potential outlier, that billion-dollar estimate is still a very resonable prediction.  The dotted red line above shows the average amount of capital raised by HBS founders between 2008 and 2010: $416M per year.  Take that as a proxy, and it’s fairly safe to project that the HBS classes from 2012 onwards will likely raise a $1B in venture capital over the next few years.  It’s up to seed funds like ours at NextView Ventures to identify and work together with these entrepreneurs for the early capital raises and catalyzing their best possible start.  And larger venture capital funds seeking to deploy meaningful capital should look no further… my fellow VCs, these 88 (recently graduated) HBS founders and their ventures are ripe opportunities for investment.  The early exits from their predecessors are a strong leading indicator that’s they’re going to be very fruitful.

 

The post Fellow VCs: Here’s Where to Invest $1B+ appeared first on GenuineVC.

VC Ground Game

Conventional wisdom says that the best way to meet with a venture capitalist is to get a warm introduction.  (While it’s a good rule of thumb, it’s not entirely true, which I’ve blogged about previously.)

However, there’s another way that I’ve seen entrepreneurs use mutual connections that’s even more impactful than a warm introduction: a proactive inbound reference.  Rather than wait for a VC to ask for references later in the diligence process, savvy entrepreneurs have had people in our mutual network lob in an email or phone call as a vote of confidence and support.  If a person is merely on a reference list after the first couple meetings, the standard expectation of course is that she is going to say good things about the entrepreneur.  But a strong inbound reference from the same person can be even more productive.  Inside our partnership here at NextView, we informally and affectionately refer to it as “playing the ground game.”  When executed well, it can successfully get us to pay particular attention to and instill additional confidence in a Founder.

Tactical thoughts to having good ground game:

  • The person lobbing in support needs to not only be a mutual connection, but rather be truly trusted by the VC… a much higher bar. Again, otherwise, there’s risk in having the opposite effect, from merely noise to a negative signal on how you judged the relationship’s effect.
  • The inbound reference must say superlative things, not just positive ones. It’s a subtle, but impactful difference.  “He’s good – I’ve worked with him” isn’t as effective.  Because it’s going further than merely offering to be a reference, and instead they’re inbound, it’s incumbent that entrepreneurs absolutely believe that they’re going to be over-the-top good.
  • One or two inbound calls of support can make a positive impression, but more than that can have the opposite effect. Too many can come off that an entrepreneur is trying too hard, signaling that there isn’t enough substance to their pitch itself to stand on its own.
  • There’s an art to the timing of these calls and/or emails. The best strategy is a Goldilocks one timing: not too early (overwhelming) and not too late (less influential to outcome).  This point is especially true if the inbound reference is directed towards another partner at the firm who isn’t the primary point person on the potential investment.

If, as an entrepreneur, you have more than one strong mutual connection with a VC, don’t overlook an arrow in your quiver which you may not have realized that you already have.  Good ground game can be the subtle edge that pushes the financing process forward faster because an especially strong opinion from a trusted contact is a meaningful signal.  But at the end of the day, it’s merely a minor tactic which shouldn’t distract from the fundamental key to a successful fundraising process – clearly communicating the opportunity of the business.

The post VC Ground Game appeared first on GenuineVC.

VC Ground Game

Conventional wisdom says that the best way to meet with a venture capitalist is to get a warm introduction.  (While it’s a good rule of thumb, it’s not entirely true, which I’ve blogged about previously.)

However, there’s another way that I’ve seen entrepreneurs use mutual connections that’s even more impactful than a warm introduction: a proactive inbound reference.  Rather than wait for a VC to ask for references later in the diligence process, savvy entrepreneurs have had people in our mutual network lob in an email or phone call as a vote of confidence and support.  If a person is merely on a reference list after the first couple meetings, the standard expectation of course is that she is going to say good things about the entrepreneur.  But a strong inbound reference from the same person can be even more productive.  Inside our partnership here at NextView, we informally and affectionately refer to it as “playing the ground game.”  When executed well, it can successfully get us to pay particular attention to and instill additional confidence in a Founder.

Tactical thoughts to having good ground game:

  • The person lobbing in support needs to not only be a mutual connection, but rather be truly trusted by the VC… a much higher bar. Again, otherwise, there’s risk in having the opposite effect, from merely noise to a negative signal on how you judged the relationship’s effect.
  • The inbound reference must say superlative things, not just positive ones. It’s a subtle, but impactful difference.  “He’s good – I’ve worked with him” isn’t as effective.  Because it’s going further than merely offering to be a reference, and instead they’re inbound, it’s incumbent that entrepreneurs absolutely believe that they’re going to be over-the-top good.
  • One or two inbound calls of support can make a positive impression, but more than that can have the opposite effect. Too many can come off that an entrepreneur is trying too hard, signaling that there isn’t enough substance to their pitch itself to stand on its own.
  • There’s an art to the timing of these calls and/or emails. The best strategy is a Goldilocks one timing: not too early (overwhelming) and not too late (less influential to outcome).  This point is especially true if the inbound reference is directed towards another partner at the firm who isn’t the primary point person on the potential investment.

If, as an entrepreneur, you have more than one strong mutual connection with a VC, don’t overlook an arrow in your quiver which you may not have realized that you already have.  Good ground game can be the subtle edge that pushes the financing process forward faster because an especially strong opinion from a trusted contact is a meaningful signal.  But at the end of the day, it’s merely a minor tactic which shouldn’t distract from the fundamental key to a successful fundraising process – clearly communicating the opportunity of the business.

The post VC Ground Game appeared first on GenuineVC.

The “Come-from-Behind” Lead Investor

As an entrepreneur, if you’re running a venture capital fundraise effectively, you’re treating the process like a sale process: identifying a set of prospects to fill the top of the funnel, cultivating those relationships over a series of meetings, then narrowing down to a handful of contender firms who will ultimately make an offer to invest with a term sheet. Of key importance, which we emphasize with our NextView portfolio companies when they’re out raising their Series A, is to run the conversations in parallel rather than serially. In other words, as much as feasible, to gate all of the VC discussions so that they’re progressing along essentially the same pace – with the goal to receive multiple terms sheets near simultaneously in order to best select the best offer and best partner, with full information.

But reality doesn’t always play out as neatly. Often for a myriad of often idiosyncratic reasons, an entrepreneur is introduced to an attractive new potential VC partner late in the game. The founder CEO is already a couple meetings deep into the process with others, at or nearing the final partner meeting decision, and somebody new is all of a sudden interested. Really interested. Is it worth paying attention to this potential “come-from-behind” VC investor?

The risk with engaging with an investor who isn’t as up to speed is a waste of the most valuable limited resource – time – when a CEO is concentrating on figuring out the best fit among the remaining candidates AND while simultaneously running a company, after all. There is also risk that the supposedly strong interest isn’t as sincere and the VC is merely “hanging around the hoop” and maintaining optionality to see if/what the contour of the round looks like, so that they can jump in front of the train at the last minute if validated by another fancier VC.

However, in my personal experience, the come-from-behind lead investor is worth incorporating into the process, as it turns out more often than you’d expect that they end up leading the round. This situation happens because a genuine come-from-behind lead investor is:

  • Self-selecting in because they’re really interested, not just going through the motions of whatever the most intriguing investment opportunity currently on their plate. If they’re fully aware of their initial position in the running, and despite that fact, they’ve decided to still push forward, they’re more likely to get to yes than the average firm in the process.
  • Driving their own internal decisioning process quickly, forgoing the unnecessary (internal political) steps, in an effort to reach a definitive yes-or-no sooner rather than later.
  • Cognizant of their position, they tend to be overly aggressive on company-attractive terms to win the deal.

The best litmus test to suss out whether or not a potential come-from-behind investor is worth paying attention to is if they’re “doing work.” And a lot of it in a short period of time: making diligence calls, using the product, striving to understand your market, engaging with questions to learn more about business. While often there’s a requirement to juggle schedules to meet other members of the firm, meeting other folks in the shop shouldn’t be the only activity going on the VC if s/he is truly getting up to speed. It should be clear that the come-from-behind investor is making every effort to fully appreciate the business as quickly as possible.

With the right motivation, abbreviated but ample time for conclusive diligence, and a willingness to overcommunicate to get to know a startup’s founder, the come-from-behind investor isn’t always the underdog in the VC financing process.

The post The “Come-from-Behind” Lead Investor appeared first on GenuineVC.

The “Come-from-Behind” Lead Investor

As an entrepreneur, if you’re running a venture capital fundraise effectively, you’re treating the process like a sale process: identifying a set of prospects to fill the top of the funnel, cultivating those relationships over a series of meetings, then narrowing down to a handful of contender firms who will ultimately make an offer to invest with a term sheet. Of key importance, which we emphasize with our NextView portfolio companies when they’re out raising their Series A, is to run the conversations in parallel rather than serially. In other words, as much as feasible, to gate all of the VC discussions so that they’re progressing along essentially the same pace – with the goal to receive multiple terms sheets near simultaneously in order to best select the best offer and best partner, with full information.

But reality doesn’t always play out as neatly. Often for a myriad of often idiosyncratic reasons, an entrepreneur is introduced to an attractive new potential VC partner late in the game. The founder CEO is already a couple meetings deep into the process with others, at or nearing the final partner meeting decision, and somebody new is all of a sudden interested. Really interested. Is it worth paying attention to this potential “come-from-behind” VC investor?

The risk with engaging with an investor who isn’t as up to speed is a waste of the most valuable limited resource – time – when a CEO is concentrating on figuring out the best fit among the remaining candidates AND while simultaneously running a company, after all. There is also risk that the supposedly strong interest isn’t as sincere and the VC is merely “hanging around the hoop” and maintaining optionality to see if/what the contour of the round looks like, so that they can jump in front of the train at the last minute if validated by another fancier VC.

However, in my personal experience, the come-from-behind lead investor is worth incorporating into the process, as it turns out more often than you’d expect that they end up leading the round. This situation happens because a genuine come-from-behind lead investor is:

  • Self-selecting in because they’re really interested, not just going through the motions of whatever the most intriguing investment opportunity currently on their plate. If they’re fully aware of their initial position in the running, and despite that fact, they’ve decided to still push forward, they’re more likely to get to yes than the average firm in the process.
  • Driving their own internal decisioning process quickly, forgoing the unnecessary (internal political) steps, in an effort to reach a definitive yes-or-no sooner rather than later.
  • Cognizant of their position, they tend to be overly aggressive on company-attractive terms to win the deal.

The best litmus test to suss out whether or not a potential come-from-behind investor is worth paying attention to is if they’re “doing work.” And a lot of it in a short period of time: making diligence calls, using the product, striving to understand your market, engaging with questions to learn more about business. While often there’s a requirement to juggle schedules to meet other members of the firm, meeting other folks in the shop shouldn’t be the only activity going on the VC if s/he is truly getting up to speed. It should be clear that the come-from-behind investor is making every effort to fully appreciate the business as quickly as possible.

With the right motivation, abbreviated but ample time for conclusive diligence, and a willingness to overcommunicate to get to know a startup’s founder, the come-from-behind investor isn’t always the underdog in the VC financing process.

The post The “Come-from-Behind” Lead Investor appeared first on GenuineVC.

The “Come-from-Behind” Lead Investor

As an entrepreneur, if you’re running a venture capital fundraise effectively, you’re treating the process like a sale process: identifying a set of prospects to fill the top of the funnel, cultivating those relationships over a series of meetings, then narrowing down to a handful of contender firms who will ultimately make an offer to invest with a term sheet. Of key importance, which we emphasize with our NextView portfolio companies when they’re out raising their Series A, is to run the conversations in parallel rather than serially. In other words, as much as feasible, to gate all of the VC discussions so that they’re progressing along essentially the same pace – with the goal to receive multiple terms sheets near simultaneously in order to best select the best offer and best partner, with full information.

But reality doesn’t always play out as neatly. Often for a myriad of often idiosyncratic reasons, an entrepreneur is introduced to an attractive new potential VC partner late in the game. The founder CEO is already a couple meetings deep into the process with others, at or nearing the final partner meeting decision, and somebody new is all of a sudden interested. Really interested. Is it worth paying attention to this potential “come-from-behind” VC investor?

The risk with engaging with an investor who isn’t as up to speed is a waste of the most valuable limited resource – time – when a CEO is concentrating on figuring out the best fit among the remaining candidates AND while simultaneously running a company, after all. There is also risk that the supposedly strong interest isn’t as sincere and the VC is merely “hanging around the hoop” and maintaining optionality to see if/what the contour of the round looks like, so that they can jump in front of the train at the last minute if validated by another fancier VC.

However, in my personal experience, the come-from-behind lead investor is worth incorporating into the process, as it turns out more often than you’d expect that they end up leading the round. This situation happens because a genuine come-from-behind lead investor is:

  • Self-selecting in because they’re really interested, not just going through the motions of whatever the most intriguing investment opportunity currently on their plate. If they’re fully aware of their initial position in the running, and despite that fact, they’ve decided to still push forward, they’re more likely to get to yes than the average firm in the process.
  • Driving their own internal decisioning process quickly, forgoing the unnecessary (internal political) steps, in an effort to reach a definitive yes-or-no sooner rather than later.
  • Cognizant of their position, they tend to be overly aggressive on company-attractive terms to win the deal.

The best litmus test to suss out whether or not a potential come-from-behind investor is worth paying attention to is if they’re “doing work.” And a lot of it in a short period of time: making diligence calls, using the product, striving to understand your market, engaging with questions to learn more about business. While often there’s a requirement to juggle schedules to meet other members of the firm, meeting other folks in the shop shouldn’t be the only activity going on the VC if s/he is truly getting up to speed. It should be clear that the come-from-behind investor is making every effort to fully appreciate the business as quickly as possible.

With the right motivation, abbreviated but ample time for conclusive diligence, and a willingness to overcommunicate to get to know a startup’s founder, the come-from-behind investor isn’t always the underdog in the VC financing process.

The post The “Come-from-Behind” Lead Investor appeared first on GenuineVC.

The “Come-from-Behind” Lead Investor

As an entrepreneur, if you’re running a venture capital fundraise effectively, you’re treating the process like a sale process: identifying a set of prospects to fill the top of the funnel, cultivating those relationships over a series of meetings, then narrowing down to a handful of contender firms who will ultimately make an offer to invest with a term sheet. Of key importance, which we emphasize with our NextView portfolio companies when they’re out raising their Series A, is to run the conversations in parallel rather than serially. In other words, as much as feasible, to gate all of the VC discussions so that they’re progressing along essentially the same pace – with the goal to receive multiple terms sheets near simultaneously in order to best select the best offer and best partner, with full information.

But reality doesn’t always play out as neatly. Often for a myriad of often idiosyncratic reasons, an entrepreneur is introduced to an attractive new potential VC partner late in the game. The founder CEO is already a couple meetings deep into the process with others, at or nearing the final partner meeting decision, and somebody new is all of a sudden interested. Really interested. Is it worth paying attention to this potential “come-from-behind” VC investor?

The risk with engaging with an investor who isn’t as up to speed is a waste of the most valuable limited resource – time – when a CEO is concentrating on figuring out the best fit among the remaining candidates AND while simultaneously running a company, after all. There is also risk that the supposedly strong interest isn’t as sincere and the VC is merely “hanging around the hoop” and maintaining optionality to see if/what the contour of the round looks like, so that they can jump in front of the train at the last minute if validated by another fancier VC.

However, in my personal experience, the come-from-behind lead investor is worth incorporating into the process, as it turns out more often than you’d expect that they end up leading the round. This situation happens because a genuine come-from-behind lead investor is:

  • Self-selecting in because they’re really interested, not just going through the motions of whatever the most intriguing investment opportunity currently on their plate. If they’re fully aware of their initial position in the running, and despite that fact, they’ve decided to still push forward, they’re more likely to get to yes than the average firm in the process.
  • Driving their own internal decisioning process quickly, forgoing the unnecessary (internal political) steps, in an effort to reach a definitive yes-or-no sooner rather than later.
  • Cognizant of their position, they tend to be overly aggressive on company-attractive terms to win the deal.

The best litmus test to suss out whether or not a potential come-from-behind investor is worth paying attention to is if they’re “doing work.” And a lot of it in a short period of time: making diligence calls, using the product, striving to understand your market, engaging with questions to learn more about business. While often there’s a requirement to juggle schedules to meet other members of the firm, meeting other folks in the shop shouldn’t be the only activity going on the VC if s/he is truly getting up to speed. It should be clear that the come-from-behind investor is making every effort to fully appreciate the business as quickly as possible.

With the right motivation, abbreviated but ample time for conclusive diligence, and a willingness to overcommunicate to get to know a startup’s founder, the come-from-behind investor isn’t always the underdog in the VC financing process.

The post The “Come-from-Behind” Lead Investor appeared first on GenuineVC.

VC Cafe Turns 9

9ball

Image credit: generation pool

Last week LinkedIn reminded me that it’s been 9 years since I started VC Cafe (Dec 2005). Several people sent their congratulations (thank you btw), and it dawned on me that it’s been a while since I blogged regularly. I prefer springing into action rather than being sentimental, but I thought a little summary and a selection of highlights may inspire someone who is thinking about blogging to share their thoughts through this medium.

So, here it goes, 10 highlights from my *humble* blogging experience in the past 9 years:

  1. Always be learning – One of my motivations for starting VC Cafe was to understand how blogging works. There were a bunch of free tools out there. I started using Blogger, and kept looking for opportunities to learn, try stuff out, read and get out there. This is still one of the things I enjoy the most about blogging. I talked about this in my new years resolution post from last year –Learning Should be your top New Years Resolution, which was also posted onThe Next Web.
  2. Consuming a lot of information as a skill – When I was covering Israeli startup news, I didn’t want to miss a thing… email alerts, newsletters, a long list of RSS feeds, Techmeme – these were all scanned before 9am with the goal to ingest and digest tons of data and distil it into a post, a thought, or an insight. I summarized the list of tools I used to collect information about startups in the Ultimate Startup Intelligence Tools List and also crowdsourced the list of tools on hackpad (which was since acquired by Dropbox).
  3. Eating my own dogfood – I was obsessed with startups and venture capital… and I talked to a lot of people and picked up nuggets along the process. So, I guess I could say I was eating my own dogfood when I wrote “So you want to be a VC...” the post was also picked up by Venturebeat. Now that I actually am a VC (I’ve joined Google Ventures as General Partner last summer), reading this post brings a smile to my face ;)
  4. Leaving something behind – Have you ever thought about what you’d be leaving behind when you’re gone? Not the most pleasant thought, but a worthwhile exercise. Write your own eulogy, and you’ll see that it’s not a simple task. For me, VC Cafe is one of those things and being included in theTop 50 blogs in Venture Capital (#4!) is a great validation.
  5. Understanding trends and industries – We live in exciting times – Industries that have been ‘offline’ for years are being transformed by technology and there are countless examples – transportation, commerce, music, education and so on… you probably have a few startup names rolling around in your head as you read this list. I enjoyed writing the post on 10 tools to understanding and dissecting an industry and received some good feedback from folks. Related to that, my post on ‘Lean Market Research‘ was a summary of a talk I gave to entrepreneurship students at London Business School and is a good first step when you’re entertaining a startup idea as a founder or investor.
  6. Celebrating milestones – 2014 marked the 3rd year of Techbikers, my other labor of love and the best one yet. We raised over $200,000 so far for Room to Read, helping build 4 schools, 8 libraries and fund 3,000 scholarships for girls to attend school in Nepal, India and Cambodia. It was the highlight of my year and I was able to capture it in “The Story of Techbikers” and “Techbikers 2014 – mission accomplished!”. It all started from reading John Wood’s book in India, and couldn’t have been done without the unwavering support of friends, volunteers, donors, and sponsors, who are all impacting the life of kids in the places they need it most. Techbikers started spreading its wings internationally (Germany and now Ireland have chapters), and I’m truly excited for others to join us in this journey! VC Cafe also helped me mark other milestones including the launch of Campus London or celebrating the years go by!
  7. Founder advice – A friend once told me that one of his best sources for post ideas are emails with questions he gets from entrepreneurs. Instead of repeating himself to founders, he wrote a thorough answer once and published it as a blog post for others to see. Inspired by that, I wrote a series of blog post with the tag ‘101’ including what should founders should do before they get into the VC’s office (published on Techcrunch), How to raise money from Angels, How to evaluate a startup CEO, Introduction to growth hacking for startups, how to find startup cofounders online and in the real world and many more.
  8. Original ideas – did you ever have a thought come to you in the shower or while running? one of the joys of blogging is taking that moment of insight and fleshing it out. Putting it into the right words, finding the appropriate examples and getting feedback from people are all part of the fun. My favorites are:Business Symbiosis vs natural selection, Creating purple cows, the many forms of innovation and the future of work, why should startup think 10x from day one and the psychology of influence in online startups. Did I really write all of this?
  9. Resources, resources, resources – the startup resources page on VC Cafe is by far one of the most popular sections since inception. It’s a *messy* directory of tools of the trade for entrepreneurs. Whether it’s open source legal documents, A/B testing tools or finding office space, this list of tools got recognized as a valuable resource by Steve Blank.
  10. Self fulfillment – the top level of Maslaow’s hierarchy of needs, this is different for every individual, but much like going to the gym, meditating, or climbing a mountain, the challenge is finding ‘Flow’ and staying on the wagon. I’ll try to do more of it this year!

Wishing you a happy and productive new year. Onwards and upwards!

Israeli tech exits hit $6.94 Billion in 2014

A new report by IVC Research Center and law firm Meitar Liquornik Geva Leshem Tal found that 99 Israeli high tech exits reached $6.94 billion in 2014 up 5 percent from $6.59 billion of 2013 (90 exits).  The IPO activity in 2014 reached a 10 year peak, to $2.1 billion. 18 companies sold in the range of $100 million to $500 million, compared to 12 in 2013 and the M&A equity ratio is up sharply.

In April 2008, I wrote a series of posts about the Golden Age of Israeli startups in the areas of funding, product innovation, mergers and acquisitions and  smart money, but then Lehman collapsed… are good times back or are we about to hit another market correction?

Update: according to PWC, Israeli exits reached a record $15 Billion in 2014, I’ve reached out to IVC for clarification. Here’s what IVC said in reply:

There is a profound difference in survey methodology between IVC and PWC. We use the globally customary methodology, while PWC apply their own methods used in PWC offices around the world. Two major differences are, as follows:

  1.  IVC report all the exit deals, while PWC clearly use a sampling method  – for ex. they reported 70 exits in 2014 – we had 99 exits in total (nearly 30 deals more).

  2. We count the actual money income from the deal, while PwC count valuations – ex.: looking at MobiEye IPO – we take into account the amount raised in the IPO – $1.02B, while they have the company valuation at the time of the IPO – $5B.

Worth quoting the PwC Israel partner, Rubi Suliman who said:

“In 2014, the stars were aligned exactly right for Israeli high-tech. The IPO window was open in the US and England, the maturity of many Israeli companies and investors, the major availability of money for high-tech from buyers and investors, and of course the strength of Israeli high-tech that knew how to reinvent itself and adapt to the times.”

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