The Market

What the greatest technology investors say about the Market

What's the Magic

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

“It’s the right person or people, with the right idea, packaged up with the right product at the right time in the right market…and  [] that’s the magic.”  Fred Wilson  #StartupStories: The Pitch @ 4.3 min into video, May 30 2012   http://nytm.org/resources/startupstories;  The Pitch: http://www.youtube.com/watch?v=0GxeVu5izLg

Sustainability by Fred Wilson

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

Wilson believes the concept of sustainability needs greater consideration today in business as “[] the focus on performance and efficiency often comes at the cost of sustainability.   

[] sustainability is all about figuring out how to be in business forever.  It is about [:] [win/win] business models that [] lead to happy long term customer and supplier relationships [;] [] avoiding the temptation to overreach [] [and] maximize near term profits at the expense of long term health [;] [] adapting [] to changing market dynamics [;] [] building a team and a culture that can survive the loss of the leader and keep going[;] [and] [] many more things like this.”  Fred Wilson, Sustainability, Nov. 21, 2011  http://www.avc.com/a_vc/2011/11/sustainability.html

Early Stage Technology Investments Come Down to 4 'M's'

Mark Suster Partner Upfront Ventures and former entrepreneur

“[] [Almost] all VC investments in early stage technology & Internet investments come down to just four key factors []: management, market, money [i.e., valuation] and above all else momentum [i.e., mostly product momentum]. 

[] The number one thing that investors get their checkbooks out [for is] momentum.  [Momentum has various definitions]:  user numbers, revenue, channel partners, biz dev deals, [etc.]. 

[] [Suster’s investment decision is based] 70% [on] management, 30% [on] product. 

[] [Almost] all VCs care about investing in big markets with ambitious teams.

[] Most VCs want to own between 20-25% minimum of [a] company. [] [Investors need to] own enough [equity] to make it worth their time – thus “money”. And all of this is wrapped up in forward progress that [entrepreneurs] demonstrate over time.”   Mark Suster, The Four Main Things that Investors Look for in a Startup,  October 6, 2010

http://www.bothsidesofthetable.com/2010/10/06/the-four-main-things-that-investors-look-for-in-a-startup/

No Great Science to Determining Valuations

Mark Suster Partner Upfront Ventures and former entrepreneur

 “There is no great science to [how prices (valuations) are determined].  The earlier [one] invest[s] the higher the chances the company won’t work out and thus [one] pay[s] a lower price than later-stage investors. [An investor tries] to pay the appropriate price for [his] perceived risks of the company succeeding and protect [himself  if] it isn’t quite as valuable as [he] had hoped.  As the risks [] get eliminated the higher the valuation investors are prepared to pay.”  These risks over time are “[first] product [], [then] market [], [then] growth/scale [] and [finally] monetization/competition [].”    Mark Suster, Why Startups Should Raise Money at the Top End of Normal  June  5, 2011;  http://www.bothsidesofthetable.com/2011/06/05/why-startups-should-raise-money-at-the-top-end-of-normal/

When a Team Meets a Market

Mike Maples Jr. Founding Partner Floodgate and former entrepreneur

 “[] we just fundamentally believe that when a great team meets a bad market, the market wins. [] sometimes when a lousy team meets a great market, the market doesn’t win and the company does really well. [] When a great team meets a great market, that’s when everything goes right.”    Mike Maples Jr., Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 10); http://www.sramanamitra.com/2010/07/13/seed-capital-from-angel-investors-mike-maples-founder-and-managing-partner-floodgate

What Ron Conway Looks For in a Deal

Ron Conway angel investor

What Ron Conway looks for in a deal: “[] traits that good investors look for in entrepreneurs []”:

[] personal chemistry with the entrepreneur 

[] great idea

[] solving a practical and real problem

[] sectors that [grow] at thousands of percent a year

[] good elevator pitch – [ability to articulate what the company wants to do] in 5 words 

[] IP (intellectual property) [] matter[s]

[] [team’s] personal characteristics including [intangibles like passion, vision, body language, being decisive, reliable] ]

[] hire ahead of [the] needs [if possible []]

[] CEO [] [must set the example as a team builder and leader] []”.

Ron Conway, Startupatwork Interview Ron Conway: What Ron Looks For In A Deal, StartupAtWork  Feb 20, 2010; http://www.youtube.com/watch?v=hksBO57gfaw