Comments on: Expect to see start-ups and VCs hit standoff over valuations

By: edhardy622

edhardy622 — Wed, 14 Oct 2009 10:21:14 +0000

British law student sues Abercrombie-Fitch for disability discrimination.
http://www.abercrombieonsale.co.uk

By: Visual search engine Like.com closes $32M round - Start-Up News | Internet Startups

Thu, 23 Oct 2008 02:01:15 +0000

[...] The round’s timing doesn’t hurt either. Coming just before the financial meltdown, the valuation discussion was probably more generous than it would be now, and the cash gives the San Mateo, Calif. company a nice buffer if its growth [...]

By: Visual search engine Like.com closes $32M round » VentureBeat

Visual search engine Like.com closes $32M round » VentureBeat — Wed, 22 Oct 2008 19:49:48 +0000

By: Engago team

Engago team — Mon, 20 Oct 2008 13:05:45 +0000

If the start-up has a business model, is break even or makes profit, then VC's will come and try to get a piece of the cake.
On the other side if your VC funded start-up is burning money, then VC's probably want to dump it as fast as possible. (example: Identity Engines http://www.idengines.com
On sale:
http://boic.wordpress.com/2008/09/29/sale-of-id...

By: jelpern

jelpern — Sun, 19 Oct 2008 10:19:15 +0000

Good article overall, but I'm not sure what the point was in using the three NEA examples. It seems like pretty bad statistics to extrapolate from three firms in different industries and stages. There are so many other factors that determine a company's valuation: sub-industry (”healthcare” is a pretty broad field), revenue, earnings, number of customers, product stage, etc, not to mention the subjective “sense” that a VC has to project whether a company will succeed. While these macro-VC trends are useful for sizing up the industry, it's hard to see the connection between them and the fates of these three firms.

By: bob

bob — Mon, 13 Oct 2008 23:55:00 +0000

VC's and founders have always argued over valuations in good markets or bad not a real news flash.

By: Scott

Scott — Mon, 13 Oct 2008 11:27:05 +0000

I know; however, what's ironic is that the only thing making them money is the private sector–specifically VC investments.

Even more ironic–the VCs with the best returns tend to be 1st time VCs (”emerging managers”).

If anything, it could help VCS. Less money pumped into million-loss hedge funds; more into VC firms.

By: Allan

Allan — Mon, 13 Oct 2008 11:09:46 +0000

Scott – that is precisely the distinct possibility. VCs get their money from large institutions like Calpers and university endowments. These institutions allocate only a certain small percentage of their overall portfolio to venture capital and other alternative asset classes. Most of their money is invested in public equities and interest bearing debt instruments. When the general markets take a collective dump like we've seen in the last few weeks, these institutions see their overall portfolio shrink considerably. This means there will be less money allocated to VCs. Thus, VCs will slow their investments in startups and some of the bottom tier VCs won't even be able to raise new funds.

By: neil weintraut

neil weintraut — Mon, 13 Oct 2008 07:30:40 +0000

matt, valuations will drop and there may be some down rounds. that's not a headline. next time try and come up with something a bit more original, if you can

By: Scott

Scott — Sun, 12 Oct 2008 21:53:05 +0000

I don't know...
After reading the first paragraph I had to stop.

It appears as if everyone is crying, "It's the end of the world!"

When, in fact, Angels are the ones doing most of the crying. VCs are sticking to their guns and willing to invest if they see a promising opportunity.

The only way VCs will stop investing is if their funding sources dry up (CAlpers, endowments, etc.).

VCs will continue to invest because that's what VCs do. They invest. If not, they'd be out of work.

- Scott from VentureDig

By: Notional Slurry » links for 2008-10-11

Notional Slurry » links for 2008-10-11 — Sun, 12 Oct 2008 06:00:45 +0000

[...] Expect to see start-ups and VCs hit standoff over valuations » VentureBeat "But it comes at a price. When the entrepreneur returns to the VC, an epic battle ensues over valuations. In a climate of fear, the power pendulum swings back to the VCs. The VC knows that an entrepreneur won’t be as likely to get money elsewhere, so he plays hardball. The entrepreneur is more ready to cave in on the valuation. That means when a VC gives the entrepreneur money, the VC can claim more ownership of the company with a given amount of investment (because the company is worth less.) Tension rises, and boardroom fights begin. I saw it all unfold last time, when I started covering venture capital in 2001." (tags: venture-capital startups finance business-culture investment business-plan crisis buh-bye entrepreneurs entrepreneurship) [...]

By: BerislavLopac

BerislavLopac — Sat, 11 Oct 2008 16:33:51 +0000

“For the start-ups with no angel or VC backing, forget about raising money.”

The conventional wisdom might say that, but I really don't see why is that so, and especially why should that happen in current situation. The cash won't go away — it's only that those who have it won't be able to put it to work through traditional ways — loans and stocks — and will have to find new ways to increase their wealth. And what better way than to put it into a venture which will bear its fruit in a 3-5 years, when the current crisis should be ending? If anything, early stage investments should only increase in the coming years…

By: Standoff between venture capital and company valuations — TechWag

Standoff between venture capital and company valuations — TechWag — Sat, 11 Oct 2008 12:00:29 +0000

[...] Venture Beat also reports that: Now lets take a look at some recent valuations at one of the most aggressive venture capital firms in Silicon Valley: New Enterprise Associates. That firm has demonstrated how it has offered very rosy terms to entrepreneurs in recent years, bidding up value levels of companies like SolFocus and SugarCRM by offering large amounts of cash for relatively small ownership stakes. It did so because it believed: 1) the deals were competitive and NEA wanted to participate, and so outbid other venture firms to do so, and 2) because it has more money than other venture firms, and so was mandated to put its money to work. Source: Venture Beat [...]

By: Startup Valuations « Startup World: Musings of a NYC Entrepreneur

Startup Valuations « Startup World: Musings of a NYC Entrepreneur — Fri, 10 Oct 2008 23:07:28 +0000

[...] October 10, 2008 · No Comments Venture Beat has a very in depth survey of startup valuations: here. [...]