Tom Tunguz

MARCH 27, 2013

Though the industry is called venture capital, the goal of a VC isn’t to maximize every risk. Instead, we try to understand all the risks a business might face and weigh those risks with the reward - the exit. Here are the major risks that I typically review when a startup pitches. Market timing risk - Is now the right time for the business? It’s often hard to evaluate this risk, but nevertheless, it’s an important consideration.

Venture Capital 197

Venture Capital Technical Review Compensation Business Model 197

Tom Tunguz

MARCH 26, 2013

With the analytics tools today, it’s easy to measure hundreds if not thousands of different metrics for your business. Cutting through all the chaff to determine the most important or insightful metrics can be quite a challenge. Below are the ten metrics I’ve found to be most useful in board meetings. They answer the questions of how should a startup founder might measure the business at the highest level.

Metrics 167

Metrics Acquisition Churn Revenue 167

Tom Tunguz

MARCH 26, 2013

When deciding if to raise a venture round, it’s critical to ensure your venture investor shares the vision for the company: both the product roadmap and the financial goals of the company. Most founders never consider the impact on fund size on VC motivations. As long as there are enough reserves to invest as the company grows, a founder might think, that’s fine with me.

Investment 102

Investment Strategy Marketing Management 102

Tom Tunguz

MARCH 28, 2013

Some of our companies started financing processes in earlier this quarter. At a strategy session with one of our companies, the team and I crafted the outline of the pitch deck. They asked me what questions a venture investor might ask in the initial meeting. Distilling the investment analysis into a small number of general questions is challenging because of the diversity of businesses we see but, I gave it a try and came up with the following questions I might ask a startup to answer in an ini

Startup 100

Startup Finance Acquisition Churn 100

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Tom Tunguz

MARCH 24, 2013

If at any time in the past ten years, you might have asked someone at Intuit about the size of the QuickBooks user base, they would have told you the same number: about 4M. This figure hasn’t grown because Intuit’s customer base, the small-and-medium business market, is a leaky bucket. On the small end of the spectrum, about 750,000 businesses are created each year and about the same number fail.

SMB 100

SMB Social Media Acquisition Churn 100