The case for venture debt for early stage companies is fairly easy to understand. Company X raises a $5MM Series A round from venture capitalists, providing for approximately a year of cash runway based on a projected cash burn of $400K/month. During this time, the company will scratch and claw to meet as many operating milestones as possible to with hope that the next round of capital is completed at a significantly higher valuation. Time...

Late last year, I provide my observations around the (ever-expanding) Micro-VC market. Apologies to all the firms whose logos I missed! Fast forwarding a couple of quarters, things remain maniacal with respect to new fund formations. To note, nearly 100 new firms were formed in 2014, representing nearly 40% of the total fund issuances last year (by number of funds). For some historical perspective, 1st time funds comprised anywhere...

While I haven’t seen authoritative numbers around convertible note usage for seed rounds, I can confidently say that the overwhelming majority of seed deals completed in Silicon Valley are done through convertible notes. In fact, while I get a ton of questions daily from entrepreneurs about the nuances of seed financing, the questions rarely stem around whether they should raise through a priced round or a convertible note. The latter is...

It’s safe to say that despite less than a full presidential term in existence, venture firm Formation8 has made quit the impact on the industry. With a rock star team, stellar early performance with exits from portfolio companies Oculus Rift and RelateIQ, and now nearly $1B in assets under management, it’s no wonder that they were dubbed by Fortune as the “hottest” venture firm since Andreessen Horowitz. With two successful entrepreneurial...

Walking into the Homebrew (named after the famed 1970’s hobbyist computer club) offices in SF provides for a very different experience than what would be normally expected from a typical venture capital firm. Amidst the rows of desks reserved for Homebrew portfolio company teams, sit Homebrew founders Hunter Walk and Satya Patel. No opulent Partner offices and no unnecessary frills. Consistent with their operating DNA and Homebrew’s...

2014. An interesting year within venture circles to say the least. From the largest ever M&A of a venture backed company to the rapidly expanding billion-dollar club to the Micro-VC boom, we saw a little bit of everything last year. Reflecting back on the year, I wanted to share some thoughts and observations of mine specifically around the early stage financing market. I apologize in advance for the semi-ramble as I’m still working...

Founded by Jack Ma in China in 1999 to becoming the largest IPO in U.S. history, Alibaba represents one of the most compelling tales of a Asia based start-up that has had a significant impact on the U.S. market. However, U.S. based tech startups continue to be the dominant source of disruptive technology for global markets. Perhaps surprising to many, early adopters of newer technologies typically have not been U.S. or Europe based...

  Without equivocation, consumer technology has completely transformed our daily behavior over the past decade: It’s changed how we communicate to the world (Twitter/Medium). It’s changed how we share our lives (Facebook/Snapchat/LinkedIn). It’s changed the way we travel (Uber/AirBnb). It’s changed how we manage various aspects of our lives (Dropbox/Mint/Fitbit/GrubHub). As such, it’s easy to see why...

The tech world has been put on notice. Shortly after Benchmark’s Bill Gurley expressed concern about the tech community given bloated cash burn rates and valuations of companies, a16z founder Marc Andreessen expressed even stronger trepidation with the industry, offering up terms such as “vaporize” and “worry”. Coming from industry titans like Bill and Marc (along with USV’s Fred Wilson who relayed similar sentiments), these words carry...

Recently, I penned a few notes regarding recent exponential rise of “Micro-VC” (loosely defined as firms that raise sub-$50MM-$100MM funds to invest in seed stage companies). According to CB Insights, at least 135 firms such firms exist today! Jeff Clavier, founder of SoftTech VC is without a doubt a pioneer in the institutional seed investing space. The SoftTech team has made over 150 investments since inception (including companies such...