• 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, 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

  • A current browse of venture capital articles and opinions would seem to indicate that the venture capital model is dead.  The heady days of venture capital seem, indeed, to be over.  According to research firm VentureSource only 119 new venture funds were raised in the U.S. last year, totaling $11.6 billion in assets. That is down from 215 new venture funds totaling $40.1 billion in 2007. Venture Capital is DEAD!  Or is it? One should be cautious of declaring a downward spiral on two data points.  Though activity is significantly down, there is still activity.  One may also draw a conclusion that venture capital is harder to come by, that investors have become more cautious or more risk averse in a pessimistic economic environment. Perhaps the venture capital model is evolving into

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