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Follow-on Venture Capital

Published: 8/31/2011 9:26:11 AM, comments: 0



Highly regarded Internet VC Fred Wilson has a great post on how is firm, Union Square Ventures, thinks about valuing a follow-on financing round for a portfolio company that is doing well:   

View post here  

It's pretty straightforward stuff and the example provided is for a consumer Internet company, but the thought process is the key take-away.   

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A Venture Capital Tale

Published: 8/29/2011 8:33:32 AM, comments: 0



Rand Fishkin is the longtime CEO of SEO technology company SEOmoz and he has an engaging and long post about his "misadventures in VC funding":

View post here

While it is sometimes hard to pin down why a venture capital financing round doesn't materialize, the post gives life to the phrase "it's not over until the check is in the bank."

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Venture Capital Trusts

Published: 8/26/2011 9:00:55 AM, comments: 0



Charles Rothstein, cofounder of private equity firm Beringea, says in a PE Hub article that the US should consider enabling the creation of Venture Capital Trusts (VCT)

View article here

Based on the UK concept and similar in some ways to Real Estate Investment Trusts here in the US, VCTs would allow individual investors to purchase interests in trusts and receive not only the returns from the technology investments but also a significant tax credit, perhaps up to as much as 40% of the amount they put into the fund and tax relief on dividends and capital gains.

It's an interesting concept, but I'm not sure sure about how successful it has been in the UK. How many world beating technology companies have come from the UK as a result of this kind of program?

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IPO Market Opening

Published: 8/25/2011 9:54:55 AM, comments: 0



The IPO market for venture capital-backed companies has been almost completely shut with the recent severe market volatility, but there is evidence that companies are positioning themselves to take advantage of a potential re-opening before the holidays.

Three midsized software companies have recently filed to go public - Eloqua, Brightcove and Jive Software. Experienced VC Nic Brisbourne thinks that how these three companies do will be a good indicator of the health of the IPO market.

They may not have the potential of a Facebook-type IPO, but it will be interesting to see if these relatively "seasoned" startup companies with significant revenues can go public soon.

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How to Make Hiring Easy

Published: 8/24/2011 9:31:07 AM, comments: 0



Successful entrepreneur Steve Blank has a great post on how to approach hiring people for your startup:

Make hiring as easy as pie

Instead of creating a written job specification, he suggests you create a pie chart dividing up the various aspects of position according to their importance and gathering data from your interviewees accordingly.  The technique has the advantage of enabling you to better visualize the position and candidates for the position.

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Venture Capital Trusts

Published: 8/23/2011 10:12:53 AM, comments: 0



Charles Rothstein, cofounder of private equity firm Beringea, says in a PE Hub article that the US should consider enabling the creation of Venture Capital Trusts (VCT)

View article here

Based on the UK concept and similar in some ways to Real Estate Investment Trusts here in the US, VCTs would allow individual investors to purchase interests in trusts and receive not only the returns from the technology investments but also a significant tax credit, perhaps up to as much as 40% of the amount they put into the fund and tax relief on dividends and capital gains.

It's an interesting concept, but I'm not sure sure about how successful it has been in the UK. How many world beating technology companies have come from the UK as a result of this kind of program?

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Venture Capital Investing Outside the US

Published: 8/22/2011 9:22:06 AM, comments: 0



Straightforward and helpful post by a well-known VC on how to determine whether or not a VC firm will invest in your company if you are based outside the US.   

View post here  

Databases such as VentureDeal can help quickly determine this, since we track transactions on an individual firm basis just by a click of a button...  

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Venture Capital Bridge Loans

Published: 8/18/2011 9:29:55 AM, comments: 0



Great educational post by noted VC Fred Wilson on the use of bridge loans for short-term financing of venture capital-backed startups:

View post here

One of the main takeaways of his post is that bridge loan performance is "awful." He then goes on to state the reasons why.
 
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Venture Capital Prospects in China

Published: 8/17/2011 10:04:44 AM, comments: 0



Venture capital investment in China is expected to increase significantly, according to a recent survey from Dow Jones VentureSource

View summary here

The survey queried 59 private equity, venture capital and funds of funds investment firms and found that more than 50% of all firms expected to open an office in China within the next five years.

Also, 60% of respondents who were already in China said that they would increase their existing presence in 2011.

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Venture Capital in Canada

Published: 8/15/2011 9:31:12 AM, comments: 0



Thought-provoking article on the state of Canadian venture capital in The Globe and Mail.

View article here

The piece bemoans the drop of available venture capital money and basically says that the government should step in, since the big pension funds have sharply reduced their investment in the asset class.

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The Shrinking Entrepreneur Class

Published: 8/12/2011 9:19:55 AM, comments: 0



The WSJ has a thought-provoking article up on what the recent recession did to small businesses in America.

View article here

It goes on to ask the question of whether or not the damage done will have a long-lasting effect, discouraging the next generation of entrepreneurs that are so important to America's growth prospects.

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Venture Capital Fund Performance Edges Up

Published: 8/11/2011 10:22:40 AM, comments: 0
Venture capital funds yielded positive returns for the eighth consecutive quarter for the quarter ended March 31, 2011, according to a report by Cambridge Associates.

View press release here

While both venture capital and private equity fund types underperformed the public markets during the first quarter, they continued to provide greater returns than public markets over 15 and 20 year return periods.

In another positive development, venture fund distributions exceeded contributions, approximately $3.8 billion and $3.7 billion respectively.

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Alan Patricof On the State of VC Business

Published: 8/10/2011 10:53:08 AM, comments: 0



Over at Fortune Term Sheet, Dan Primack has a good, though short interview of veteran venture capitalist Alan Patricof on the current state of venture capital and how the recent public market drops could affect it.

View interview here

Interestingly, he says that the current market turmoil could dent very early stage angel activity, which he thinks would be a good thing, since it has been driving up prices to "irrational" levels.

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Venture Capital IPO Report by VentureDeal

Published: 8/9/2011 12:36:39 PM, comments: 0



National, curated venture capital database VentureDeal is pleased to announce the availability of its Venture Capital IPO Report for complementary download.

View report here

The report covers the first half, 2011 - United States activity for technology venture capital-backed US company IPOs. Industries reported on include digital media, Internet, IT and biotechnology/pharmaceutical.

There is no registration required to download the report.

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Corporate Venture Capital on the Upswing

Published: 8/8/2011 9:43:38 AM, comments: 1



Corporate venture capital activity is increasing significantly, according to a report in the Venture Capital Journal.

View PE hub post here

The post also mentions that Q1, 2011 corporate VC investment total almost 10% of all VC in the US. Interestingly, the post suggested that level of activity could represent the beginning of a "bubble."

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Get Your VC Done Quickly

Published: 8/4/2011 9:46:21 AM, comments: 0



Albert Wenger is a VC with Union Square Ventures. He is certainly pessimistic about the macroeconomic environment going forward, hence his post today encouraging entrepreneurs to get their financing done quickly:

View post here

I'm not sure I share his view that "the probability of a dip that could be as big as 2008 or even bigger has gone up tremendously in the last few months," but a little extra insurance in the bank is always a good thing.

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SecondMarket - Q2 2011 Report

Published: 8/1/2011 10:30:44 AM, comments: 0



Secondary venture-backed company stock marketplace SecondMarket has its report out for Q2 private company stock transactions.

View report here

Completed transactions totaled $268 million, which represented a 75% year-over-year increase from the first half of 2010.

The report also shows a number of metrics related to secondary private company stock acquisitions.

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