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“Don’t you know that you are a shooting star, And all the world will love you just as long, As long as you are.” – Paul Rodgers, Shooting Star With the IPO market now blown wide-open, and the media completely infatuated with frothy trades in the bubbly late stage private market, it is common to see articles that reference both “valuation” and “revenue” and suggest that there is a correlation between the two. Calculating or qualifying potential valuation using the simplistic and crude tool of a revenue multiple (also known as the price/revenue or price/sales ratio) was quite trendy back during the Internet bubble of the late 1990s. Perhaps it is not peculiar that our good friend the price/revenue ratio is back in vogue. But investors and analysts beware; this is a remarkably dangerous technique, because all revenues

Sorry I haven’t posted in a while -- it’s been a hectic stretch. And I also have to admit that I’ve been watching a lot of Indiana Jones movies with LittleLP lately. Every now and again, I’ll wonder if I should be doing something productive like scribbling down a blog post or paying some bills, but the moment I see that fedora I’m frozen in place like one of Indy’s antagonists in the presence of some ancient and mystical idol. And I’ve long thought that the best of the bunch is The Last Crusade, but only recently did I realize that the last scene of that movie offers a metaphor for the craft of investing. Stick with me on this for a moment: As you’ll recall, the movie reaches its climax when the good guys catch up

There are four types of investors on any VC firm’s team: pure investors, operators turned investors, domain experts and jacks of all trades. At their core, each VC has varying experience across three key dimensions: investing experience, operating experience and domain expertise. Investing experience includes investment banking, corporate development and principal investing roles (e.g., venture […]

Recently, one of our companies presented to another venture group as they were out looking for their next financing round. After a reasonably positive report on the meeting from the CEO, he received an email from the firm that was said something like “We think you’re tackling a huge opportunity, but we don’t have the […]

This question seems to come up quite a bit among LPs and GPs: Should a general partner at a VC firm spend time writing a blog, when it appears to be such a time-consuming process? Why would VCs even consider creating blogs to document thoughts or musings about the industry at large, when there are […]