Splitting The Deal
Syndicating an early stage investment is a time honored practice in the venture capital business. It was extremely common in the VC business in the early 80s when I started.
I assume syndicating was a common practice in the early days of the institutional VC business because fund sizes were small, risk was high, and splitting the deal among multiple firms was a good way to manage those things.
Over the years syndication has become less common among large venture capital firms as fund sizes have grown and portfolio diversification can happen in a single fund to manage the early stage risk.
In the angel market (and to a lesser extent seed market), syndication is alive and well and remains very common.
But in the institutional VC market, it is pretty common to see one firm lead and take all of the Series A, another firm to lead and take all of the non-pro-rata amounts of the Series B, and the same in the Series C and Series D. Syndicates are still built but they are built round by round versus in the round itself.
I was thinking about this today and it occurred to me that the three best VC investments I have made in the last ten years, which are also the three best VC investments I have made in my career, were all syndicated in the first VC round, which was a Series A in all three cases.
In each one, I negotiated for a $4-5mm round that bought between 20-25% of the business, and I then offered between 33% and 50% of the amount I had negotiated for to another firm.
In each case, USV could have taken the entire round. We had sufficient capital to do that. But in each case, I wanted some company in the investment and, honestly, I wanted to lay off some risk too.
In each of these three situations, the $1.5-2mm that we “laid off” to others was or is worth hundreds of millions or more and yet I don’t regret the decision in the least.
These syndicate investors each stepped up at critical times and did things for the companies that I could not do and they earned every penny of the returns they got.
So, I am a firm believer in splitting the deal, even when the economics (another word for ownership) suggest that there is no room for others.
My personal track record tells me that splitting the deal works. It helps you step up to something that has a lot of risk but also a lot of upside and it brings other people who can add value into the situation early on.
At a time when we are seeing venture funds get bigger and bigger, I am convinced that the hallmarks of old school early stage investing; small fund sizes, small rounds, and syndicates remain best practices and we continue to do that at USV.
Smaller venture funds perform better, too. After a successful first or second fund, it takes a lot of discipline to keep a fund on the small side.
This is true in all of life, not just VC’s. The biggest mistake I see companies make is to constantly want to get bigger. At some point you say how can I make more money. True in life too, bigger house, bigger cars, more stuff.
I think it is also because operating at the same level gets boring. In business or in life. For many people. Not to mention the rush that people get by doing deals. And by the people that they meet. And by growing an organization regardless of the monetary rewards.Look at Gotham Gal’s post yesterday on Upfront Summit in LA:http://gothamgal.com/2018/0…Let’s stipulate Joanne is not angel investing because she wants or needs more money. Sure that’s possible. But it’s more likely that by doing so she gets to meet many unique people and the process is fun, interesting and challenging for her. And that provides a tremendous amount of enjoyment irrespective of any monetary gains. No question in my mind that that plays a major role. It’s the juice. Well at least it would be for me. I care about that way way more than I would about having a home on the West Coast.So just like any addiction (and I am an addict to deals so I know this very well) you have to keep the drip going and in many cases increasing.A few years ago I had a great year. And the first thing I thought was ‘this is so good it’s going to ding the happiness I get going forward.’. So I actually wished it was broken into multiple smaller wins over time. So that way I could experience the pleasure not all at once.
Aren’t the company value growth expectations from investors a factor for this?
Yes they are. Unless you are the owner, investors want growth, growth, growth. Nobody wants to hear: Well the market is not growing that fast but it is a good market and we are going to concentrate on operations and make some serious money.As usual I’ll give a good story. My business parter needed to replace an old deck. He wanted it for Thanksgiving but the guy who everyone said is the best said no way even though it was months out. Well he got it done.As he paid him for a great job he told him you thought about expanding?The guy said “I used to have four times as many people, but all I did was run around to jobs, sometimes I made more money, sometimes I didn’t, I am much happier. I can work on each of the jobs and make sure they are quality, I don’t have to overpromise because I have enough work, I don’t have to negotiate on price, I learned from restaurants that tell you it will be a 30 minute wait and seat you in 10 you are happy when you get seated after waiting less than you thought.
In your splitting mechanics, are you including angel investors allocations, or is that typically more in the realm of the company deciding on it.
I’ve built a business on collaboration, and you, my friend, are a true collaborator. I consistently admire your thought processes and the way you do business.
Same here, Meredith. Amazing how the wisdom transcends the actual subject matter; I consistently find parallels and applications that apply to my business and life.
When I was raising money in the early 2000s, every VC we talked to (Series B and C) required at least two other VCs to be part of the deal or they would not invest. In addition to spreading risk financially, I always felt like it was a way for them to leverage each others opinions and due diligence.
I hope some of the entrepreneur’s we work with a reading this as they are supposed to do. Its easy to get blinded by a mega fund wanting all of a round or a hedge fund wanting all the capital in several rounds.
What is why of splitting the deal?Portfolio correlation issues?Fund (money) constraints ?Time constraints ?Fund Duration constraints?What are the hurdles to splitting the deal?Portfolio conflicts?Current porfolio conflicts ?Personality conflicts?
At a time when we are seeing venture funds get bigger and bigger, I am convinced that the hallmarks of old school early stage investing; small fund sizes, small rounds, and syndicates remain best practices and we continue to do that at USV.You are getting ‘big boxed by those other funds. I have been reading about that. So honestly the only thing you can do (given your prior experience at Flatiron with growing the way that did (iirc)) is to stay small and boutique and stick to what works for you.  Your arms are to short to box with god…
When I traded, if there was a 1000 lot offered I always felt more comfortable buying 200-300 of it and splitting it with other people for many of the reasons you elucidated above.However, I think you forgot one that the big funds may be forgetting.Splitting the deal eliminates competition. It forces funds that might compete with you onto your team. It effectively makes it so they can’t invest in a competing startup. So, that’s always good strategy too.
It effectively makes it so they can’t invest in a competing startup.Assuming that they do the same as USV does.  Also there are so many firms out there, is that really a cost effective strategy?  So Fred cuts in Brad. We are not talking about the ‘big three’ automakers. There are thousands of potential investors in this day and age. Sounds like a protection racket. Similar pattern (per my other comment) companies hiring multiple law firms so their competitors can’t.
Plus, when someone else got the 1000 lot and you needed a couple hundred, it makes it more likely they will share with you.Not everyone but most people.
In each one, I negotiated for a $4-5mm round that bought between 20-25% of the business, and I then offered between 33% and 50% of the amount I had negotiated for to another firm.Absolutely. What I would call ‘spreading around the cheer’ is a way to build relationships for future benefit. Irregardless of what you think initially it will lead to. Or whatever your motivations are. All patterns in business and life repeat. I could write pages on this one.It’s actually unfortunate, that at least when I was in business school, they taught specifics but iirc never basic patterns which could be applied broadly. These are things you learn by doing but I do think they could be taught as well.I think that this is the type of concept that makes a good interview question. Maybe not even stated as a question but as a statement. Without any inference as to the right answer. Then see if the respondent says ‘wow so I guess you are sorry you did that!!!’ or ‘well looking at it another way it might be a net gain in the future because …’.
It’s actually unfortunate, that at least when I was in business school, they taught specifics but iirc never basic patterns which could be applied broadly. These are things you learn by doing but I do think they could be taught as well. For a while, as part of an effort to help my wife, I was a B-school prof and learned some things about B-schools:(1) In part they have physics envy, e.g., want to do for business what Newton did for physics.That goal is too difficult.(2) In part they see themselves as building on economics and social science like the rest of physical science and much of engineering and technology build on physics. Alas, economics and social science are not solid enough to provide a good foundation for building.(3) The B-schools don’t want to be practical, clinical, or professional like parts of engineering law, or medicine.
I think the same type of ‘take us seriously’ thinking led to the DSM in psychiatry in addition to drugs. If you can’t define and name it you can’t profit from it.Business is vastly more art, luck and creativity than science at least entrepreneurial smaller type business which is how everyone starts out generally.
I’m a big fan of your investment approach, and to a large degree, believe in your business philosophy and cultural tenets (open, collaborative and participatory), which have proven to drive greater overall value, purpose and success for all involved.I think many decisions come down to one’s “values” (room for others) as a company or a person, and that absolutely plays a significant role.
The extreme example of this in 2012 – 2016 was the post accelerator seed round aka “party round” that was an aggregation of $50k checks – taking syndication to the nth degree and wishing off *any* accountability.A lot of weight was given to “signalling risk” without much understanding of “follow on” and “pro rata”.
CONTRIBUTORS:This blog post topic is certified Platinum.(Topic & access to method of investing from a VC view)Captain Obvious!#UnequivocallyUnapologeticallyIndependent
two heads are better than one, and neither loses theirs.
CONTRIBUTORS:Question.. ..In angel rounds is the cash value of the 100K-2Mill when cashing out to a seed x what amount? And if you are able to secure equity in the start up how much normally can an angel retain % and is worth based upon the seed VC valuation.Captain Obvious!#UnequivocallyUnapologeticallyIndependant
From another angle, the headline reads:‘ EVERY POTENTIALLY IMPACTFUL STARTUP NEEDS TO ATRRACT AS MANY GOOD PEOPLE AS IT CAN. ‘Watch for startups to start asking for syndication.
You lost me:So, the upside is supposed to be some additional investor brings additional “value” to the deal, value other than cash. So, we have VC bringing something of “value” other than cash?Okay, let me think: They will write good, important code? They can write code? They can invent valuable new algorithms? They are well versed in algorithms already known and can suggest those as needed? They are good with the pros, cons, architecture, system administration of challenging uses of relational data base? They are up to date on how to design, build, and manage a server farm of 2 million square feet, e.g., for the bridge and the network operations center (NOC)? They can give good advice on when to use virtual machines versus containers? They can be clear for the server farm on Linux versus Windows Server? They are experts in recruiting, training, retraining, continual training of the staff? They can give good advice on how to set up internal computer security for the software development and production deployment efforts, e.g., to keep the code from walking out the door on a thumb drive or some malware walking in the door on a thumb drive? They are good on the pros, cons, threats, security considerations of wireless? They are good enough at computer science to get a chaired position at a leading research university, maybe just tenure, maybe just a tenure track position? They know how to set up and manage a large software development process, with specifications, walk-throughs, documentation, testing? They are good enough at software in general and the company’s software in particular to see ahead clearly enough to avoid making architectural decisions that would “paint the software into a corner” in three years? They are good enough at software to be recruited for a CTO, CIO, …, software team leader slot at a major company really good with software? They are good enough with information technology to have a slot as a problem sponsor at NSF or DARPA? They know how to do large scale data backup and recovery? They are good at server farm disaster recovery? They know how to set up a dozen server farms around the world so thatusers won’t notice when from natural disasters or whatever one or two of the server farms or several major optical fiber communications links are down? They are experts in the applied math of ad targeting? They are good at working as needed with the powers in government, local, state, US Federal, foreign?Okay, they know about equity compensation plans, have a big Rolodex, know a lot of marketing VPs, accountants, auditors, lawyers, investment bankers, and other VCs and have been involved in several M&A transactions.But, for the downside, the additional investors are additional sources of dissension. Get more investors on the BoD and, thus, dilute the power of the CEO to run and grow the company instead of replacing the founding CEO and pursuing an exit.
The upside is not sitting with the founders at a board meeting and thinking, ‘Shit, I don’t know what to do to help.’ And then subsequently realizing that Charlie @ Bessemer would know what to do, but he’s not in the room because you didn’t get him to invest.And things then go bad.
Yup: I’ve heard that one before. It can go:Just buy this bottle of potion, this book, take this on-line course, etc. and lots of big problems will be solved for you!! Falling hair? Yup, standard solution. Get turned down by girls? No problemo — you’ll have to hire security to keep the screaming, gorgeous girls away from you. Falling arches? We have not seen such a case, but we are sure there, too.So, save your startup, make your startup fully successful, become wealthy beyond Buffett, Gates, Page, Brin, Zuck, and Bezos, for a wife, have your choice of beautiful, young, smart, devoted, faithful, loyal, affectionate, loving women, and all for the insignificant, little price of one more helpful investor and BoD member!!!!And, what are the terrific qualifications of Charlie at Bessemer? Mom and Dad taught me to ask and get informed before buying. Mom was smart and didn’t want to raise any total fools. Dad always had a lot of contempt for buying sight unseen, a pig in a poke (sack).If I take Charlie’s check and have him on my BoD and later conclude that Charlie is not working out well enough for us, is there some easy way I can return both the money and Charlie? Will Bessemer take returns as readily as, say, Sam’s Club, Wal-Mart?E.g., once at Sam’s Club I bought a ham, all cooked and ready to eat. At home I was ready with toast, lettuce, tomato, mayo, yellow mustard, cheese, salt and pepper but at the first bite nearly did an upchuck — that ham had been a very long way from anything that ever walked; it was something that came out of big tube under a lot of pressure.But, okay, okay: I’ll feed it slowly to my kitty cat!!!! Nope, my kitty cat took one whiff and never went back! But Sam’s Club took it back. I used the lettuce and tomato for something else.I’m guessing no, I wouldn’t be able to return the ham, Charlie, or the check to Bessemer.Instead I start to guess that actually Charlie has a much more stable slot at my company — well, it WAS my company before I signed those papers and cashed those checks — than I do. In particular, I’m stuck with Charlie.I have a friend from a well known, successful US business family, and his dad taught him when some such opportunity comes by ask “Why should I?” and insist on a good answer or don’t.So, for Charlie: I look up his bio: He was a history major at Williams College. Got a Harvard MBA — since I taught in an MBA program I know something about MBA degrees. Charlie was a tech stock analyst at an investment bank. Joined a startup as Director of Marketing. When that startup was bought, Charlie joined some of his school buddies at Bessemer?But, I know; I know; Charlie’s blood is more pure blue than the blue behind the stars on the American flag; he is definitely upper crust, part of the elite; has kept in close touch with his prep school, Williams, Harvard, and Wall Street buddies; has a huge Rolodex; etc.Uh, maybe if we have questions about continuously available SQL Server, we should invite a SQL Server expert to our BoD? Or, instead, we maybe we should use our Rolodex to call a high guy at SQL Server technical support.If we have a tricky legal question, then we should have a high end, white shoe, Wall Street lawyer on the BoD, éminence grise to listen to our dilemma and slowly respond with a few, prudent, general, obscure wise words? Or, instead we should just invite him to meet with us in the C-suite?Generally we could use a lot of input, but good sources of input don’t have to be on the BoD.Or, if I have a BoD, then I am reporting to people who could and might be eager to fire me. And, as @JLM has advised, I should never admit I have a question or are in doubt, confess or explain a dilemma, or tell all, or some such, to someone who could fire me.So, with that advice, my BoD might be one of the last places I should look to for advice on some dilemma! Again, once again, over again, yet again, one more time, the BoD members have a fiduciary responsibility to the shareholders, in particular, for VCs to the fund at their firm and its limited partners.Indeed, given some dilemma, I might just call JLM. Or that successful US family. Or some guys with gray hair in my brother’s law firm.As a founder, I have to be careful about from whom I take advice, if I take equity funding and have a BoD, and, then, who goes on the BoD.IIRC, @JLM has mentioned that one of the most important decisions in business is who you choose to work with. I’ve heard that advice before, and I’ve collected plenty of data in support of that point.Back to looking into what standoff posts I should use between the motherboard and case for my first server!I want to get this puppy going, 8 cores at 4.0 GHz with 16 GB of ECC memory, four disk drives, etc.!!!! So far apparently I was able to get ECC support on the main memory, the motherboard, and the processor without paying the big bucks of some Intel Xeon processor and a some Supermicro motherboard and chassis. Unless are doing video editing or playing video games, and I’m not doing either, that’s a LOT of computing!Gee, I can see it now: Charlie at Bessemer would call one of his buddies in the computer shop at his old investment bank and get a recommendation: I should get 4U Supermicro cases and boards with two processor sockets per board and in each socket put a $10,000, 24 core, 48 thread Xeon processor at 2.2 GHz and run containers in address spaces on operating systems in virtual machines on VMWare. Charlie took that down carefully because he doesn’t know a thread from a core from a processor from a socket or what 4U means!Uh, Charlie, that’s for later!!!!And before I get too far with the building, I want to have and practice an iron clad way to backup, save, and later restore, bit for bit, bootable partitions!It is a lot of work to set up a bootable partition with all the software, options, etc. I need and want. Too often I had bad software installs or malware ruin my work on such a partition and had to start over — really big bummer. Never again: I want the whole darned bootable partition backed up so that I can restore it, right away, just as bytes, in just a few minutes.
The biggest hurdle between you and massive success is your repeated use of the word ‘My.’.FWIW.
I’m a sole, solo founder. US business is awash in such, in pizza carryout, grass mowing, auto repair, auto body repair, dentistry, general contracting, hardware and building materials, rental property, big truck-little truck businesses, i.e., US Main Street businesses, and more, e.g., no doubt a lot of the vendors on eBay and Etsy.My experience is that some huge fraction of US businesses good enough to fund at least a good life style are either family businesses, e.g., where the brother, wife, and kids also work, or just a sole founder that started out as just one person.Lesson: Being a sole founder is very common.But as a sole, solo founder, I have to do all the work! Right. But that is common as businesses start — generally a founder needs to know nearly everything about the business.IIRC YCombinator and many more informed sources say that the biggest problem in startups is co-founder disputes. Well, I’ve avoided that problem.Lesson: I’ve avoided the biggest problem!
Look right below this comment for the answer I intend for you.
What is below has long been kindergarten level material here at AVC, but just to calm your frustration I’ll repeat it for you:Being regarded as unusual is not sufficient for big success, but it is nearly necessary. So, I can’t be too concerned about being regarded as unusual.Sure, for an ambitious, new Web site with a highly technical core, it would be expected that there would be co-founders, a team of at least several, and VC equity funding at each milestone.But there is apparently a rule in US VC funding that says that for even as much as $0.10 in equity funding from a VC firm, the startup must have traction significant and growing rapidly — a necessary condition and nearly sufficient. There is good evidence that the traction desired is annual revenue of $1+ million.So, before my startup gets to consider even $0.10 from a VC firm, the startup needs to get to $1 million a year in revenue.So, for VC funding I’d need to get to the $1 million. I can’t hire now, so I have to be a one guy startup, sole founder, solo, working alone.I considered and at times pursued various startup ideas, and too often the ideas required too much time, money, and effort before revenue. From my background in doing projects for US national security and in academics, I saw no problem with the time, money, and effort — just get some equity funding. That is, my experience was that projects would be approved or not, funded or not, based on a paper proposal, maybe with some core math or physics derivations. Eventually I learned that US VC funding ignores any such paper materials. Instead, nearly the only thing of interest is the traction, the $1+ million a year, and its growth rate.I was surprised, but okay by me — I just needed to know that poorly publicized rule of VC investing.But I can learn: For my present project, it’s (A) a problem to be solved, (B) some applied math for the core of the solution, (C) some software for a Web site and the math, (D) some data, and (E) the routine rest for going live, running ads, etc. Well, I designed the project so that I could do (A)-(E) alone. I’m through (C) except for some more testing and some minor software tweaks. So what is left for revenue is just (D) and (E), and I have a good start on both.Having a team of several would have made the work (A)-(C) much more expensive but maybe not much faster or better.Okay, then, so far (i) VCs were essentially not interested in my project, and (ii) I haven’t really needed VCs for my project.For the future, if I get to the $1 million a year in revenue, still as just a one person operation, then, amazing, presto, bingo, maybe VCs would call me.But what would we have to talk about? With the $1 million a year I would have a good life style business. And I’d have plenty of cash for servers, routers, etc. for more capacity.As a sole, solo founder, I would have a private company, an LLC. But with a VC check, I’d be selling off a fraction of my company and get a BoD of people who could fire me and take the business I used to own 100% of.The BoD would want to rush to an exit no matter what I wanted. The BoD would be in charge of the company in nearly every sense, and I would be just a hired CEO with a vesting schedule. I’d be an employee again. I’d go from $1 million a year in revenue, nearly all pre-tax earnings, and 100% owner to just an employee who could be fired. Doesn’t sound very good to me.Yes, there might be stock deal details where I would retain full control over the BoD, but likely VCs wouldn’t like such.Sure, if my company had four co-founders, $1 million a year in revenue, growing quickly, with all credit cards maxed out, each co-founder with a pregnant wife, then maybe the company would be desperate for a VC check of, say, $3 million.But I’m not four; I’m just one. I have no maxed out credit cards. I don’t have a pregnant wife. I don’t have a wife at all.And starting now, three more team members would be little or no help in getting to $1 million a year in revenue.Net, (A) I very much want to remain a private company. (B) I’m afraid of the overhead of a BoD. (C) I’m terrified of reporting to a BoD. (D) I don’t want to be a Delaware C corporation. (E) Unless I just want to sell out and do something else, I don’t want to be a public company. (F) Even if some VC firm offered me a deal I liked and I got a BoD, still I’d be darned careful who got on the board.Being a relatively good source of advice for “what to do” in some dilemma is not even close to sufficient to offer a board seat.Can a sole, solo founder be successful? Example — Plenty of Fish.Really a lot of this is in just the story “The Little Red Hen” in Mother Goose. Did someone assure you I was a dumb sucker who could be talked out of his work based on just some silly promise of some Charlie of no particular impressive qualifications at Bessemer on my BoD so that maybe some day in case of a question I’d be able to ask his advice? If so, then maybe their next message to you will be about a great, once in a life time opportunity on an old bridge across the East River, some bottle of magic potion, featuring the incredible healing qualities of the oil of the turtle, etc.?
The best ones I worked with asked great questions, based on a lot of relevant experience. Tons of room for doubt in early stage and it takes a lot of courage to focus . . Which means refusing to try too much. The good ones are smart enoughTo not meddle at the level of detail in your 3rd paragraph.
In analogy with some ancient Greek temple, a BoD slot is like one of the columns. I hope to be able to get good advice without giving up a BoD slot.A stupid or disloyal BoD member could cause me a LOT of trouble.On focus and courage, maybe I’m doing okay: It’s like being in a fox hole on Guadalcanal — bullets passing overhead six inches away. But I still have good water in my canteen, cans of K-rations for food, good boots, a good rifle, enough ammunition, am not wounded, etc. So, no reason to quit!Yup, had a computer failure. But I believe I can plug together from parts the first server, get operating systems and other software installed, and get the startup code running again.The code does run, apparently well. It should have more testing, but I didn’t have any trouble getting bugs out so far and am sure I can fix any bugs during the next testing,The crucial core applied math I derived says that my code should provide the users a much better solution.The work that was rare was the applied math I derived along with how to get the data the math assumes. The rest has been routine.I’m not trying “too much”: The work uniquely mine has all been fast, fun, and easy. For the math, I’ve done more difficult math than that before. Typing in the software using Microsoft’s .NET — not a biggie. I’m not new to typing in software. Between now and alpha test, it’s gather some more initial data and, otherwise, all plenty routine for a Web site. Supposedly there are 1+ million Web sites; I, too, should be able to bring up a Web site. Gee, I’ll want to get a static IP address; that’s a biggie?
One of Fred Wilson’s favorite themes is consolidation in the venture capital business. To me it is a simple and uninteresting topic. Union Square Ventures is too small to flourish now that the farmers are taking over from the cowboys as the Wild Wild West days of venture capital rapidly come to a close.Naturally Fred yearns for the “good old days” when he was young, healthy, and could ride around on his horse with a six shooter dangling from his hip. Cain killed Abel. That is, the farmer inevitably defeats the hunter.Union Square Ventures is like a mom and pop retail shop on Main St in the 1970s in the good ‘ole USA: a sitting duck that big box retailers crushed once the Reagan Revolution took away protections that enabled the small and weak to compete against the larger and powerful.Fred’s shilling for bitcoin reminds me of a barbershop in South Central Los Angeles that, once it was no longer economically viable, became a front for dice games in the back room. LPs (limited partners) who entrust money to Union Square Ventures are like investors who bet on Main St and against the big box retailers in the 1970s and 1980s.Fred should either retire (probably the best choice because his health seems to be failing) or do what VCs like Chris Dixon did, and join on of the larger VC funds.
How could I possibly argue with such a well considered argument. I concede my point. You are certainly correct. Thank you for enlightening me.
Not an argument. An observation. You could even call it a judgment.
I will call it what it was: an unsubstantiated assertion.Please do not defend yourself with claptrap. Please either make a substantiated assertion (thoughtful argument) or please refrain from commenting on this post. Your comment merely was fluff that detracted from this discussion.But hey your assertion probably made you feel good. Right? I mean, heck, if it feels good then do it. Right? Go with your gut or your heart and ignore your head. Right? Why think when you can merely react. That is a great way to go through life. Yup. A great way.
I am not attempting to defend myself or make a valid argument. I am not responding to your thoughts and ideas because I did not feel this was warranted. I was not trying to engage you. There is nothing in your comments that invites engagement nor makes any valid substantiated point.You come across as someone with an ax to grind, making assertions and assumptions, and judgments. When I respond in kind, you take offense. Everything you are accusing me of doing is exactly what you are doing.My experience over the past nine years commenting on AVC is that you get what you give. You don’t get to determine the rules of engagement, i.e., who responds to you and how. The best way to influence that is by how you engage with others.Someone without the courage to comment under his/her true identity — changing his/her name with each comment (I saw you on another post as well and just ignored you), throwing around assumptions and unsubstantiated and incendiary remarks has an agenda and is disrespecting this community. (There are anonymous regular commenters on AVC but their persona still allows for engagement. I have come to know several of them outside this blog.)If you want to engage then make some thoughtful observations. Ask some genuine questions. Otherwise, you are merely a troll.I’ve seen this before. We will go around in circles. I’m done. You can keep talking if you’d like. I’m sure you will.
Just a troll Donna. You know I found out something interesting this weekend, this is why it’s hard to get big. One of my kids likes Buffalo Wild Wings (I really, really do not, but he is my child)So we went to a brand new store. Dang those wings were big. I said: Wow these wings are so much bigger, than X store, to an employee that I recognized from X store who was helping open.She said: “Oh yes, we get really big wings for the first two months, smaller for the next two months, and then go down to the small size”People somehow always talk to me, easy last name, I tip well, I am wearing shorts sandals and a hunting coat as I boycott winter, and when I pull out an Amex Platinum the head cocks.This is why it’s so damn hard to get big. I know a P/E guy and yes that is gender specific name is: Mick McGuire overrode what a woman who built that chain: CEO, Sally Smith, who resigned a woman would do.
I wonder if that strategy works?And it took me a few minutes to respond. Had to get past the visual of “shorts sandals and a hunting coat” — although of course anyone who has been here awhile knows that you are a year-round shorts guy.
It will work short term, no different than Eddie Lambert buying Sears and making Kenmore Appliances absolute shit.Everybody I talk to can say I have this Kenmore Elite Appliance from 15 years ago that just works. Bought a new one and it died in three years.Now I buy LG from Home Depot (I do)Wait till there is a downturn. People will get washed out no different than those crappy appliances.Shorts since 1992.And yes, it must be a strange look. You know people look at the oiled canvas hunting coat with thinsulate insulation and real wool skin with fur coat interior and think……
Well, you should know an unsubstantiated assertion when you see it, its your specialty.However, you would be wrong.Anyone with a working knowledge of the English language would identify Donna’s comment as a gentle rebuke, which is a sign of her unwavering belief that online interactions should not be unnecessarily harsh or negative.Fortunately, some other patrons hold the view that uninformed trolls should have their ignorance and arrogance scrubbed off them with a finely tuned reality laser.To each their own.
To each their own.It’s a team effort.Apparently the troll was unsatiated and left.
Donna you are too kind in your response/engagement. Trolls need not be fed.
Big VC has been around a long time.Interestingly, Mom & Pop shops closed because the economics of big box stores took their customers.If you did any homework, you’d Know that small VC have a better track record of returns for their LPs.Which makes your argument as specious as your ‘Fred is a cowboy’ analogy.At the Big People table, you need to know what you are talking about.
” unsubstantiated assertion””But hey your assertion probably made you feel good. Right? I mean, heck, if it feels good then do it. Right? Go with your gut or your heart and ignore your head. Right? Why think when you can merely react. That is a great way to go through life. Yup. A great way”= “his health seems to be failing” Nasty unnecessary hurtful certainly if this was written about me and my family read this. I am will refrain from saying more as I am reminded of Simone Weil “never react to evil in such away to augment it”
For some reason, Disqus is not posting your doofus reply to my comment at the bottom of the page.For everyone else, its uniformed, scatological nonsense.Want some data with your wanton libel?The USV 2004 & 2010 Opportunity funds are the #1 & #2 performing funds from all of the 2004-2014 VC fund vintages tracked by the NVCA.https://www.pehub.com/2015/…You may also want to note that every other Top 10 funds is – wait for it you arrogant clown – a small fund ( in the $175M – $200M range ) from a small VC partnership.Put some data in your cranium before firing up your ‘ big idea extrapolator ‘ there Hoss.Otherwise, the internal logic holds but the external accuracy is waaaaaaaaaaaaaaaaaaaaaay the fuck out of [email protected]:disqus FYI. Trolls need to be stuck through the heart with data spears. You don’t even need to rub the spear tip in garlic to kill these night dwelling goobers.
The subject of syndication got an in-depth treatment by Prof. Yael Hochberg in “Whom You Know Matters: Venture Capital Networks and Investment Performance”. He found that better-networked VC firms experience significantly better fund performance, as measured by the proportion of investments that are successfully exited through an IPO or a sale to another company. Similarly, the portfolio companies of better-networked VCs are significantly more likely to survive to subsequent financing and eventual exit. Link to that paper is here: http://yael-hochberg.com/Ya…
it’s a question of hit-rate, otherwise the return model won’t work, unless you can increase your holding in later stages.