Here’s a Washington Post interview with my former Bain colleague (vintage 1980’s!) John Backus, a managing partner at New Atlantic Ventures in VA.
What do VCs actually do for their money? Backus says:
“We are basically professional guides to the entrepreneur to help them navigate rapidly evolving industries and solve difficult problems,” Backus said. “We’re like their corporate psychologist.”
Read more here.
Investor Paul Singh covers the common wisdom about angel investing. Very sensible. A good plan. Hard to argue. Let’s call it the base case…
More here.
I keep hearing that Silicon Valley is driving up the valuations of start-ups to absurd levels, and from both NYC-based and West Coast investors. This piece from Business Insider, citing un-named sources, throws a few bombs at Y-Combinator for being the greatest instigator of the explosion in valuations. The bubble in large company valuations is working its way to startups, and no doubt it is a bubble.
“Seven years ago, Paul Graham and his now-wife Jessica Livingston founded a startup accelerator, Y Combinator.
Since then, it has become the most competitive startup program in the world. Its acceptance rate is compared to that of an Ivy League school, with similar prestige stamped on each graduating startup.
To date, more than 460 startups have gone through the accelerator, and they’ve gone on to raise more than $1 billion collectively.
Among them are Dropbox, a file sharing and storage company that has raised $275 million at a $4 billion valuation. Airbnb, a consumer-to-consumer room-rental service, has raised $120 million at a $1.3 billion valuation. Socialcam, which graduated from Y Combinator’s program in March, was acquired this month for $60 million…”
Read more: http://ow.ly/cGZsQ