The Venture Capital One Pager

From VC John Bachus, here is the Venture Capital One Pager!  A great primer on how the various rounds of financing work together — at least according to the standard playbook.

Big Caveats:  There are other playbooks!  Like the “take no outside capital” playbook, and the “one round and done” playbook.

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More info here.

Silicon Alley’s Top 10 VC Deals

Guess who’s fueling Silicon Alley’s rise?  While angels and early stage funds provide the early sparks, the big bucks are coming from the west coast.  For example, Fab’s $160 million Series D is the largest VC investment round in a NYC-based company since 2009. But Menlo Ventures and Andressen Hororwitz from the Other Coast lead the list of VC’s in the round.  Below, from CB Insights, are Silicon Alley’s top 10 VC investment rounds in NY-headquartered companies since 2009.  And note – Fab and GILT are listed twice.

Silicon Alley Top 10

For the original post, click here.

Venture Capital Forum 2013

Join us for an evening of discussion about venture capital and a wine reception. I’ll be moderating a panel of leading venture capitalists for a discussion of what to expect in the next 12 months: developments in the field; the state of start-ups; what’s likely (and not likely) to be funded in the year ahead.

Any questions or topics you’d like covered?  Let’s us know @JKNews, or email.

Gotham Media Digital Cocktails
Venture Capital Forum 2013
Wednesday, January 30, 2013 from 6:00 PM to 8:00 PM
New York, NY 

Panelists:

  • Steven Brotman Managing Partner, Silicon Alley Venture Partners @StevenBrotman
  • Habib Kairouz Managing Partner, Rho Ventures @HabibKairouz
  • Charlie O’Donnell Partner, Brooklyn Bridge Ventures @ceonyc
  • David Pakman Partner, Venrock @pakman
  • Jerry Spiegel Partner, Frankfurt Kurnit Klein & Selz PC 

Moderator:  Jason E. Klein Founder and CEO, OnGrid Ventures @JKNews

To register, click here:  http://gothammedia.eventbrite.com/

A Venture Capital Recession in 2012

The National Venture Capital Association data from Money Tree is out, and the VC industry is in a recession:

  • For the full year 2012:
    • VC funds invested declined 10%, to $26.5 billion
    • The number of VC deals done declined 6%, to 3,698.
  • Double-digit decreases in investment dollars across most industries, specifically the traditionally capital-intensive Clean Technology and Life Sciences sectors, offset the increases seen in the Software sector in 2012.
  • Stage of investment shifted from Seed to Early Stage as venture capitalists overall began engaging with companies later in their life cycle than in previous years. Investments into Seed Stage companies decreased 31 percent in terms of dollars and 38 percent in deals with $725 million going into 274 companies in 2012, the lowest annual seed dollars since 2003.
  • Internet-specific companies experienced a 5 percent decline in both dollars and deals for the fullyear 2012 with $6.7 billion going into 976 rounds compared to 2011 when $7.1 billion went into 1,033 deals. However, the year still marked the second highest level of Internet investment since 2001. These companies accounted for 25 percent of all venture capital dollars in 2012, up from 24 percent in 2011.
  • Investments in the NY Metro area held at 11% of the total number of deals, with 397 companies funded, but the dollars deployed declined 18% to $2.3 billion

More details here.

Angel Valuations Inch Up

How much to Angels typically invest and at what company valuation?  Angel valuations are inching up per the Halo Report for Q2 2012:

  • Company valuations for early stage financing rounds with Angels are $2.7 million in Q2 2012, up from $2.5 million in Q1 (median, pre-money valuations).
  • Typical angel investment rounds total $550,000 for Angel-only rounds and $1.5 million with VC’s involved (these are median values; the mean values are higher at  $1 million and $4 million.
  • And VC’s have Angels co-invest in 72.5% of their deals.
  • And half of Angel  deals are in tech-related fields  (Internet, Software, Mobile, Telecom).

You can download a 16-page pdf of highlights here.

VC as Psychologist

Here’s a Washington Post interview with my former Bain colleague (vintage 1980’s!) John Backus, a managing partner at New Atlantic Ventures in VA.

What do VCs actually do for their money?  Backus says:

“We are basically professional guides to the entrepreneur to help them navigate rapidly evolving industries and solve difficult problems,” Backus said. “We’re like their corporate psychologist.”

Read more here.

The Decade of the Angel Investor

Investor Paul Singh covers the common wisdom about angel investing.  Very sensible.  A good plan.  Hard to argue.  Let’s call it the base case…

  • The takeaway for angels is you shouldn’t get into this asset class unless you’re willing to do 20 deals,” Singh said. “Do not get excited about any one company.”
  • “What I’m doing is going to the blackjack table, playing the minimum hand while I count the cards,” Singh said. “When I see a pattern I double down heavy.”
  • “Bad bets fail fast,” Singh said. “Smaller check sizes force companies to figure stuff out quickly.”

More here.