The Angel Investor Casino – A CEO’s Ultimate Temptation

Angel Investor Casino

As a CEO, when you raise follow-on funding you often must decide what do with your angel investors. Many CEOs decide not to keep their initial commitment to their angels, falsely assuming it is both the only, and the accepted, option. Such CEOs don’t consider the very real and significant consequences of this decision. Today, we explain why CEOs, as the ultimate decision-making authorities, believe they don’t have a choice in […]

Venture capital is booming … for a hundred companies

There was a great post recently by Fred Wilson, who is much smarter about venture capital than I am. He debunked the idea that the apparent boom in venture capital (total investments were up 60% in 2014) is anything that you should get excited about: “Round sizes have gone up and burn rates have gone up, but so much of this is limited to a hundred or a couple hundred […]

Venture capital summed up

Every wonder why venture capitalists really aren’t interested in ‘early stage innovative companies’ (i.e., you)? This gem of an explanation comes from Jerry Neumann‘s blog: “If your venture fund didn’t invest in one of the most successful companies of your era you were not one of the top venture funds … So you try to invest in unicorns. The easy way to do this is to have the expertise, the […]

Why All Angel Investments Should be in Common Shares

I read David Rose’s book on angel investing during a recent holiday. It does an excellent job of explaining how professional angel investors (should) think. For those who don’t know, David is the founder of New York Angels, and is one of the world’s best known angel investors. However, David, like many professional investors, makes one major mistake in his chapter on deal terms. He specifies two ways for angel […]

Who has more fun: VCs or entrepreneurs?

I was asked a question on Quora today, about whether it is better to be a venture capitalist or an entrepreneur. The first assumption behind this question is that you have a choice: there are literally thousands more entrepreneurs (if you count all small businesses) than there are venture capitalists. And some people, e.g., graduates of top business schools, former management consultants and investment bankers can have the choice. I […]

Finding a top 20% VC investor

I posted recently about why 70-80% of VCs harm their investments – even though it is in their best interest to see the firms succeed. Of course, now would be a good time for a post describing how to find a great VC: that top 20%. And I found a post that says it so well that I almost don’t need to write it myself. Here’s what Mark Suster, an […]

Why 70-80% of VCs do harm

There has been a lot of debate over Vinod Khosla’s comment that 70-80% of venture capitalists (VCs) add negative value to their investees. I agree with Vinod. I always advise entrepreneurs to look first for an investor who won’t actively reduce your company’s value. For VCs, in my opinion, Vinod’s 70% number is right. For other investors, such as high net worth investors or family offices, maybe 20% are harmful. […]

Family offices to VCs: 100:1

I’ve blogged in the past about the advantages of family offices as an investor. Because they are so private, people tend to think that there aren’t very many of them. We often assume that venture capitalists – who are more visible – are also more common. It’s time to put some data behind that. Here’s the results:

In praise of family offices

by Kamal Hassan One of the prizes in our current funding competition (closing Oct 31st), besides a meeting with Canada’s top venture capital firm, is the potential to meet one of two family offices. In discussions over the past few weeks, I have discovered that many people don’t even know what a family office is. The best way to think of a family office is the following: 

Exciting times in private investing

by Kamal Hassan Exciting things are happening in the US: it is now legal to publicly tell people that you are raising funds! For those who didn’t realise it, there are laws against telling people that you are fundraising. If you want to sell shares in your company to the public, you have to register as a public company and spend $100,000+ to get all your information verified. If you […]