Buying Facebook
May 18
This from the WSJ online:
Meanwhile Theophilus Hodges, a 36-year-old property manager, stopped into an E*Trade branch in downtown Chicago on Friday morning specifically to open an account to buy Facebook shares, he said.
“If it wasn’t for Facebook I wouldn’t be here,” he said as he left the branch to go to his bank and transfer money into his new account. “I missed out on Groupon when it went public, so I’m not going to miss the boat this time.”
Mr. Hodges said he plans to invest $10,000 in Facebook shares—including $4,500 of his own money and $5,500 from his mother.
My reaction: uh-oh. When the retail market is back in force, I tend to worry.
Doing the right thing
May 18I had a usual week with a lot of meetings. One was with two young entrepreneurs. They raised some angel money, and while they’ve made good progress, they think the likely path is to sell the company to a strategic because progress has been slower than planned.
As I’ve written before here, entrepreneurship is hard. Today, Facebook has gone public. Many, many people will have a lot of paper wealth (in an IPO, employees cannot sell until after a “lock up” ends, and that is usually 6 months–it makes for a very long 6 months of stock ticker watching!). A few of my b-school classmates are at Facebook, including COO Sheryl Sandberg, and I congratulate them. What amazing results from so much hard work!
But, most entrepreneurs aren’t in the 1%. They are in the 99%.
“Only in America”
May 17I was invited to say a few words at an event last night called the “Unity Dinner” (more here). State Treasurer Steven Grossman kicked off the night with a passionate perspective on innovation and entrepreneurship.
The key note speaker was Harvard Business School Dean Nitin Nohria, and other speakers from the tech side included Joe Chung of ATG and Redstar Ventures and Niraj Shah of Wayfair. There was a lot of mingling afterwards.
How VC “optics” can drive behavior
May 15I know this sounds strange, but investment firms can have an incentive not to support their companies in future rounds, particularly if there are deep-pocketed co-investors who can do so. It may be part of that firm’s strategy, but also, it can make for some great optics.
For example, one of our companies raised a Series A money that was a near-3x share price increase from the Seed round. Good stuff for Kepha, right? However, the company is valued on our books for much less than the 3x.
Here’s why: we invest in follow on rounds. In other words, since Kepha supports our companies in future rounds, we wrote a large Series A check which diluted the “value to cost” ratio on our books.
My Mother and her shoe boxes
May 12This is a hard post to write. Today is May 12. It is the day of my mother’s birthday. She also died, at age 60, on May 12. That day also happened to be Mother’s Day. It was a difficult day with too many coincidences.
Soon after she passed away, I was at the funeral home. My mom kept in shoe boxes every greeting card my sister and I had ever given her. She had asked my sister that the boxes be placed in her casket after her death. I didn’t know about either the boxes or her request, until after my mother died.
What is “VC 2.0″?
May 11Kirill Sofronov contacted me after reading my blog post on the recent Kauffman study of VC, in which I reference “VC 2.0.” He asked me to write more about what VC 2.0 is.
I think that is a tall order. I will give it a shot, though, using two perspectives as a starting point.
A Roundtable discussion with the Business Czar
May 11Yesterday, I participated in a roundtable discussion on Big Data, led by Greg Bialiecki. He is on the Governor’s team. Wade Roush calls him the “Business Czar” in an article here.
I’ve been investing in Big Data, before there was such a label, since 2003: StreamBase, Vertica (sold to HP), Goby (sold to Telenav), VoltDB and Paradigm4. All of these projects have been with database pioneer Mike Stonebraker. So, I feel up to speed on the sector.
But, I’m not at all politically active. I’m a registered Independent and try to focus on each issue on its own rather than on “party lines.” I’m also cynical about government in general.
Raising VC money: getting a strong start with your VC
May 11This is the eighth and final post in a Friday series on “raising VC money.” I hope the series has been helpful to entrepreneurs. If you liked it, please consider Tweeting it or linking your blogs to it, so that other entrepreneurs can find out about it?
Today, we’ll cover the topic “getting a strong start with your VC.”
So, you’ve finalized the legal documents with your VC (more here). What now?
Entrepreneurship is hard
May 8Entrepreneurship is hard.
We are in that part of the VC cycle when entrepreneurship is again “hot” and the popular media is glorifying start-ups. But, I don’t think it’s all that easy.
Here’s how hard it can be. I today met with a young entrepreneur. He is from Estonia. He arrived in the U.S. a few months ago, and through a lot of effort, is working on a new idea and has convinced five developers to work with him for free.
I asked him where he lives. He laughed and said that he was couch-surfing. I asked him: “No, really, where are you staying?” His answer: “I am sleeping on people’s couches and move around.”
A fun dinner
May 8Last night, I had a very enjoyable dinner with two old friends: Andy Palmer and Dave Girouard.
Andy and I go way back. He was the CEO I recruited to Vertica in 2005, back when he, Mike Stonebraker and I were working on “big data” before the Big Data label came along and it became trendy. Vertica was sold successfully to HP last year for about $340MM, from what I hear.
Through Andy, I first met 9 years ago with Dave. Dave became the head of Google Enterprise, which is today a $1 billion business.
