Archive

  • Hey Ladies! What’s the score? http://www.huffingtonpost.com/tabby-biddle/women-venture-capital_b_356383.html A question often raised in the venture capital community is around the lack of women at the forefront of the venture capital headlines.  We all assume that since men are hard-wired (testosterone driven) to be bigger risk takers than women, their leadership will result in bigger returns.  After all bigger appetite for risk equals bigger possible returns right?  Well, it can also result in more strike outs than home runs. A study by Hedge Fund Research found that, from January 2000 through May 31, 2009, hedge funds run by women delivered nearly double the investment performance of those managed by men.  Female managers produced average annual returns of 9%, versus 5.82% for m

  • Underdog

    The news these weeks has been filled with dramatic stories of natural disaster and widespread unrest across the global landscape.  Naturally, we are all focused on thinking of ways to lend support to Japan and how the call for reform and resulting violence in the Middle East will impact us. I’m certainly feeling change at the pump, aren’t you? The broader market is reacting to these events with uncertainty, resulting in volatility in the markets. But, out of crisis and chaos come opportunity.  In moments like this, innovation is required in response to changing market needs and could quite literally “save the day.” Innovation is at the heart of both of these news events.  Cell phones and social media have been lynchpin to communications across the Middle East.  The same tech

  • Let’s face it, if you could predict the future, would you be reading this right now?  Would you be on LinkedIn trying to network or learn something about your business if you could forecast, say, Google’s stock price?  We didn’t think so. Nevertheless, there are compelling reasons why you as a business owner seeking funding from a VC or other sophisticated investor need to prepare a financial model.  Here are some of them. A financial model ultimately helps you develop and refine your business plan.  It forces you to break down your value drivers into milestones and benchmarks.  Thus, it helps you identify those value drivers, set goals and analyze your company’s underlying business proposition. A well structured, bottoms-up financial model let’s you analyze what-if scena

  • I’d like to share some thoughts on compensation in VC-backed start-ups today.  According to a recent export poll by ExpertCEO of 56 CEOs from venture backed companies, the average compensation of CEOs was $330,145 in 2010, with a salary of $246,742 and a bonus of $83,403.  In 2011, CEOs expect their salaries on average to remain relatively flat at $247,950, but their bonuses to increase to $106,337, for a total average compensation of $354,287. Given the expected increase in bonuses it seems timely to briefly talk about stock options versus restricted stock.  Restricted stock is becoming increasingly popular over stock options.  One reason is that restricted stock still has value if the stock trades below the price when the stock was granted, whereas stock options are worthless if t

  • I’d like to share some thoughts on the VC industry today.  According to a recent article on cnnmoney.com, despite the past decades biggest hits (e.g. Google, YouTube, etc.), the typical VC fund has lost money for its limited partners.  The median net return to VC investors has not been positive for any vintage year since 1998. What does this mean to those out there seeking funding?   There is still funding to be found (as the headlines about Facebook and Groupon have triumphantly indicated), but given the recent history of returns, investors are very interested in finding the next homerun. One way to ensure that you communicate your all-star potential is to make sure you have a well developed business plan, a strategy for selling your plan, and an experienced business partner to he

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