Category

Venture Economics

VC Fund Returns Are More Skewed Than You Think

Some of the most popular posts I’ve written over the past couple of years were the two that focused on just how rare outsized returns for an individual deal are in venture capital. You can see the original posts here and here. In those posts I was analyzing data from Correlation Ventures that showed just…

Investing in Downturns

TBH, I haven’t been thinking much about new investments at the moment. I’ve been asked many times how I think the Covid-19 crisis will change investor behavior and fundraising for startups. I generally give the kind of answer I think most VCs give and say something about how we all know that down markets are…

The Markets Are Great . . . but Venture Outcomes Haven’t Changed Much

A few years back I blogged about the hard data behind venture outcomes and the challenge of creating a venture portfolio that produces strong returns. That blog post – which turned into one of my most read posts ever – grew out of a study done by Correlation Ventures showing the distribution of outcomes across…

How Well Do Founders Do in Venture-Backed Exits?

A few years ago I wrote two posts – Venture Outcomes are Even More Skewed Than You Think, and Some More Data On Venture Outcomes – that challenged the mythology that only 1/3 of venture-backed deals failed and showed just how rare large (10x and greater) venture returns really are. I think the sharpness of…

What’s The Optimal Portfolio Strategy for a Venture Fund?

Last year I wrote a few posts (here and here) that talked about how skewed venture returns were. The key take-away graphic from that post is below – outsized returns on venture investments are rare. Much rarer than most people realize. A key question my post didn’t consider was what the ideal venture portfolio might…

You May Have Too Many VCs On Your Board

Those that have followed my blog for any period of time know that I love the data that my friends at Correlation Ventures gather and write about (for example the data behind my post Venture Outcomes are Even More Skewed Than You Think or IPO or M&A). Today they released some data on the correlation between the…

The Changing Venture Market In 3 Images

Want to visualize how the venture funding market is changing? Look no further than these 3 slides (from a presentation put together by our friends at Greenspring). I don’t think much commentary is needed here. Average round size at Series A is increasing dramatically. Venture is being increasingly driven by large rounds (especially at the…

Venture Returns by Sector

Readers of this blog know that I love sharing data from Correlation Ventures (they have a pretty extensive database of venture deals and venture outcomes and love to post share trends from time to time) – see two great examples using their data here and here from this blog. A few weeks ago they sent…

The Profit Imperative

With the markets crashing around us and the sky once again falling I thought it was time to revisit a few fundamentals and perhaps more importantly share some what what we’re now seeing in the private funding markets.   Growing Profitably. Let’s start with what I labeled the Growth Imperative a few months ago in a…

Why Companies Fail

I’ve touched on aspects of this topic before, but thought it was worthy of a full post. Companies in the venture business fail all the time. As I wrote last year, the majority of venture rounds fail to return capital. With all the hype one reads in the startup press these days, that fact can…