How Bridge Rounds Work in Venture Capital: Messy, Full of Drama, and Not Without High Risk

SaaStr

I’ve watched many bridge rounds over time from a far, and took $500k in bridge capital at EchoSign myself when our seed round didn’t end up being quite enough to get us to the Series A. Simply put, it’s another round of venture financing from the same investors as the last round. Each bridge round requires a VC burning some political capital. If she/he has gone to another firm, there’s no political capital to spend.

How do corporate venture capital firms different from conventional venture capital firms?

SaaStr

A few like Salesforce Ventures and GV are an exception, but let me explain: Corporate VCs often do not write a “second check”. Again, this is less likely with Salesforce Ventures and GV, etc. The post How do corporate venture capital firms different from conventional venture capital firms? They aren’t as dependable. This doesn’t mean they are “worse”. It does mean be careful how you use them. This is issue #1.

Highlights from the 1Q19 Fenwick & West Venture Capital Survey

Kellblog

Every so often I post highlights from the quarterly Fenwick & West Venture Capital Survey , as much to share knowledge about the existence of the survey [1] as to share its current-quarter data.

The Decentralization of Venture Capital

Tom Tunguz

To thrive, venture capital firms must perform three things well: raise capital from limited partners, source companies to invest in, and pick the best opportunities. In the last decade, venture firms have experimented with decentralized sourcing. Decision-making in venture firm is a dark art. Non-consensus means investing in areas competitors aren’t yet so the valuations are more attractive because there is less capital supply.

How Developed is Global Venture Capital Market?

Tom Tunguz

Just where is the US venture market relative to the rest of the world? The chart above shows the compound annual growth rate of venture investment rounds A through D in ten fastest growing venture markets plus the US from 2010-2016. It’s wonderful to see the expansion of venture capital across these geographies and especially at very healthy growth rates. This chart illustrates the depth of the capital pool available to startups.

We’re Overthinking Seed Round Signaling Effects

For Entrepreneurs with David Skok

Conventional wisdom, and advice, abounds: entrepreneurs should never include a venture firm in their seed round because it’ll scare other VCs off from pursuing the A. Getting Funded Entrepreneur Funding Raising capital seed deals Venture capitalThere is much hand wringing in the startup ecosystem about various forms of signaling between the seed and A rounds.

Which Open Source License Should Your Project Use if You Want to Raise Venture Capital?

Tom Tunguz

I was curious if there was any relationship between type of license used by startup commercializing open source software, and their ability to raise capital, and exit. However, looking at the chart above, we can see that Apache projects raise a disproportionate amount of capital, compared to their share of open-source projects. Developers chose the MIT license for 20% of code repositories, but commercial entities of MIT projects raised less than 1% of venture dollars.

How to calculate your total addressable market and make a great TAM slide for investors

For Entrepreneurs with David Skok

Getting Funded Startup Help Business Model Funding SaaS TAM TAM slide Total Addressable Market Venture capitalI’ve seen hundreds of startup pitch decks in my time at Matrix, and have found total addressable market (TAM) slides to be among the most frequently mis-executed. I get the sense they are often included as a formality in an attempt to get VCs to check a mental box and continue on hearing about other.

Podcast: How Venture Capital Will Change Your Business and How it Stacks Up Against Other Kinds of Funding, an Interview with Rand Fishkin of Moz

Divestopedia

Whether buying, selling or growing, you are going to deal with capital. Rand Fishkin explains what venture capital did for him, how it falls short in certain situations and what other types of capitalization you can use to pursue your business dreams

Founders: Please don’t allow anyone to screw your early backers

The Angel VC

We’re trying hard to make venture capital a little more human , and we really mean it when we say that we aspire to be good VCs. financing vc venture capital

SaaS Funding Napkin, the 2017 edition

The Angel VC

As a reminder, in the original post I tried to give a "back of a napkin" answer to this question: What does it take to raise capital, in SaaS, in 2016? So, what does it take to raise capital, in SaaS, in early 2017? funding napkin saas software as a service venture capital

The growing dissonance between two business models (SaaS and VC)

The Angel VC

For VCs, the question is how many of these companies can become large enough to make the (admittedly somewhat weird) business model of venture capitalists work. Not yet convinced that you shouldn’t raise venture capital? :) Let us know ! saas venture capital

What does it take to raise capital, in SaaS, in 2019?

Point Nine Land

In 2016 I thought about the question of what it takes to raise capital, in SaaS, in 2016 and tried to give an answer that would fit on the proverbial back of a napkin. venture-capital financing founders entrepreneurship saas

What makes fundraising so stressful?

The Angel VC

More often than not, raising venture capital is a huge distraction for the founding team. If you are a founder or CEO and have raised venture capital it would be awesome if you could participate in the survey. fundraising typeform venture capital

Building any business is hard

The Angel VC

For most companies which didn't raise venture capital this is completely irrelevant. saas venture capitalJudging from the number of Facebook likes and retweets, as well as comments on Twitter and elsewhere, my last post resonated with quite a lot of people.

Appearance on the Twenty Minute VC: Financing Thoughts, The Private Equity Sales Process, and More

Kellblog

Today famed venture capital podcaster and now venture capitalist at StrideVC , Harry Stebbings , released a new episode of the Twenty Minute VC podcast with me as his guest. ( iTunes version here.).

Should you take small checks from deep pockets?

The Angel VC

For entrepreneurs, more VCs investing into seed rounds means easier access to capital. vc venture capital

Introducing Jenny Buch, Talent Manager at Point Nine

The Angel VC

hr point nine recruiting venture capitalOnce a startup has released the first version of its product, raised some funding, started to get the word out and is getting some traction, the biggest challenge almost always becomes hiring.

A toast to all the great ones that we've missed

The Angel VC

Its meaning is described very well on Bessemer's website , and because it's so hilarious I want to quote it in its entirety: "Bessemer Venture Partners is perhaps the nation's oldest venture capital firm, carrying on an unbroken practice of venture capital investing that stretches back to 1911.

Good VCs, bad VCs

The Angel VC

Inspired by Ben Horowitz’ excellent “Good product managers, bad product managers” post and Stefan Smalla’s “Good leader, bad leader” masterpiece I’ve tried to put together my thoughts on what I think makes a great venture capital investor. venture capital

There’s more than one path to $100 million

The Angel VC

planning saas venture capitalA couple of years ago I wrote a post titled “How fast is fast enough?”. The subtext of the question was “How fast do you have to grow if your ambition is to get to $100M in ARR and build a very large company”. It’s an important question, as your target growth rate determines your hiring plan, budget, and fundraising strategy.

The Two Dimensions of Startup Performance

Kellblog

They run out of money.” — Don Valentine, Sequoia Capital. Leadership Management Startups Strategy Uncategorized Venture Capital moribund stars stuck unbridled

Announcing Point Nine Capital III

The Angel VC

Today we’ve announced Point Nine Capital III, our new €55M fund. Investors in PNC III include institutional investors like Horsley Bridge Partners , Sapphire Ventures , Flossbach von Storch and Vintage Investment Partners as well as a number of highly successful Internet entrepreneurs.

Is Another SaaSacre In The Offing?

Kellblog

IPO Randomness SaaS Uncategorized Venture Capital Rule of 40 SaaSacre

6 things to pre-empt 90% of Due Diligence

The Angel VC

due diligence funding saas software as a service venture capitalThe founder of a portfolio company recently asked me what kind of numbers and other material he'll need when he goes into his next round of fundraising.

Understanding viral growth in SaaS

Point Nine Land

saas venture-capital startupA few tips to unlock virality and maintain low CACs at scale At Point Nine, we’ve been fortunate enough to invest in about half a dozen companies building products that are intrinsically viral (or have a built-in growth mechanism in their product).

Video of my SaaStr 2019 Presentation: The Five Questions Startup CEOs Worry About

Kellblog

CEO Competition Leadership Management SaaS SaaStr Strategy Venture CapitalA few days ago, Jason Lemkin from SaaStr sent me a link to the video of my SaaStr Annual 2019 conference presentation, The Five Questions Startup CEOs Worry About.

We ? vanity metrics ;-)

The Angel VC

Yesterday I saw this post on the blog of Karlin Ventures. In response to a tweet by Paul Graham which was highlighted in Danielle Morrill's excellent Mattermark Daily newsletter, the guys at Karlin Ventures revealed the "days since last contact" numbers for their portfolio.

The Journey to Series A?—?a look at our “Seed-to-A conversion rate”

Point Nine Land

saas series-a seed-investment marketplaces venture-capitalThe Journey to Series A?—? a look at our “Seed-to-A conversion rate” If you’d like to be notified of our next posts you can subscribe to our newsletter.

“Café Hours” avec le team point neuf

Point Nine Land

venture-capital tech paris startup saasBook your slot and come meet with the whole P9 team in Paris We’re renting a café like this. Not this one, but similar. :) After Kyiv and Berlin , the next stop of our #P9EUTour is Paris.

The Market Leader Play: How to Run It, How to Respond

Kellblog

Get the biggest name investors [3], raise the most capital, make the most noise about the capital you’ve raised, and use the money to make a few big-name hires, all in an effort to make it clear that Sand Hill Road has thoroughly evaluated the company and its technology and chosen you to be the leader. Spend a nice chunk of that capital on public relations [4]. Salesforce Ventures invests in Alation) to white label re-sale deals (e.g.,

A closer look at the 6 things to pre-empt 90% of Due Diligence

The Angel VC

Mamoon Hamid of Social+Capital has coined the term "Quick Ratio" for the ratio between added MRR and lost MRR, and he's looking for companies with a Quick Ratio of > 4. financial plan saas software as a service venture capital

What It Takes to Make a Great SaaS Company

Kellblog

Here are the slides : Uncategorized Venture Capital SaaS Strategy Startups Metrics LeadershipI’ve been making a few presentations lately, so I thought I’d share the slides to this deck which I presented earlier this week at the All Hands meeting of a high-growth SaaS company as part of their external speaker series.

When should you hire a CFO?

Point Nine Land

There is no one-size-fits-all answer to the question, as the right timing depends on a couple of factors, including how much capital you’ve raised, how fast you’re growing, and if one of the founders has prior experience with or a talent for financials. Jason M.

What animals are WE hunting?

The Angel VC

This power law distribution of venture returns, which Peter Thiel has spoken about extensively , is what makes it almost impossible to return a large fund without hitting one or more outliers. According to Aileen Lee’s research , only 0.14% of venture-backed tech startups become unicorns.

What sucks about fundraising

The Angel VC

It's venture capital but I have the feeling no VC will take risks. Finding people who understand the business and can support / advise us going forward, vs. wasting time talking to people who don't understand the venture potential of the business." founders infogram survey typeform venture capitalLast week I wrote a post titled “What makes fundraising so stressful?” and asked founders to tell me which parts of the fundraising process suck.

Are You Counting Payments as Renewals?

Kellblog

Most investors believe you could better maximize ARR by simply raising more capital and sticking with annual payments. Uncategorized Venture Capital SaaS Startups Metrics churn Retention net dollar retention gross dollar retention payment vs. renewal

Lessons from Christoph Janz and Nick Franklin at Mogul I/O Berlin

Chart Mogul

Our own Nick Franklin spoke to Christoph Janz of Point Nine Capital at the fourth edition of our inaugural event series, held in Berlin at Point Nine's headquarters. Participants: Christoph Janz ( @chrija ) — Managing Partner, Point Nine Capital. Events events mogul i/o venture capita

KPIs for VCs

The Angel VC

If you're new to the world of venture capital, LP is short for "Limited Partner" and means the people and funds which have invested in our fund. investing kpis metrics vc venture capital

How AI could impact the B2B software industry in the next decade

Point Nine Land

It was clearly a huge barrier to entry as not every startup could build and maintain such infrastructure (capital intensive + scarcity of talents). entrepreneurship saas venture-capital startup ai

AI 66

Four (more) things we look for in SaaS startups

The Angel VC

investing point nine saas software as a service venture capitalMore than two years ago I wrote about what we look for in early-stage SaaS startups.

Bootstrappers: SaaS startups finding their own route to $1M+ ARR

Chart Mogul

In the business world, the term generally refers to: “Financing and growing your business without the need for external assistance in the form of capital investment.” The growing divide between SaaS and venture capital.

Introducing: The One-Slide Update Deck

The Angel VC

dashboard reporting saas metrics venture capitalWhen we start to work with a new portfolio company, one of the things we always suggest is that in addition to (sometimes lots of ) ad hoc communication via eMail, Skype, Basecamp, etc. we set up a standing meeting or call, at least during the first 9-12 months following our investment. Typically it's a one-hour monthly call, and the purpose of these calls is to get us updated and to talk through current issues.