Tag Archives: #VC

Matt’s point of view: from unicorns to reality

Today’s guest post is from Matt Weeks, a serial entrepreneur and longtime friend of NTR.
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image source: here

From Matt:

I saw a great article in BI about Postmates CEO Bastian Lehmann’s attitude towards hypergrowth.

For years, venture capitalists have been pushing hypergrowth over profits, at least though the initial phases of investment rounds. Investors told Lehmann to reinvest the company’s money in pushing more growth over building a sustainable business.

That advice didn’t go far with the Postmates CEO. (…) Lehmann argues that it’s the CEO’s fundamental job to have looked at the margins and made decisions early on.

“Companies that run for the last two years in hyper growth are now wondering how to make money.”

I completely agree — hypergrowth without a hope of unit economics that lead to profitability has always been a fool’s errand with precious few exceptions, and even those “superstars” eventually had their “come to Jesus” realization moments when investors got nervous and were anxious for at least a hope of a repeatable, profitable set of unit economics. It’s okay to use early capital to explore and iterate to figure out the product-market fit and pricing/monetization formula. But at some point there must be a path to profitable and repeatable unit economics.

There has been a sense that pushing the bidding of sequential funding rounds at ever-increasing valuations would create a kind of de-facto “momentum” and crowd-out 2nd and 3rd and 4th place contenders, or at least amass a large enough war chest to drive marketplace pricing down as much as needed to push competitors out of the running (usually also by creating such a huge and dominant brand that customer acquisition in a noisy market is too expensive to make progress to catch up with the so-called leader).

Continue reading Matt’s point of view: from unicorns to reality

Guest post by Miki Saxon. Entrepreneurs: About VCs

 

I’ve been around startups since the late 1970s; long before dot com and software took over the spotlight.

And what I learned about VCs back then was different from VCs now.

Back them, most VCs were guys who had started or helped start companies, with strong operational, not just technical, and strategic background.

Sad to say, most VCs with under 25 years experience often don’t know what they’re doing, because they have never created/built a company, while the rest are just bankers masquerading as VCs following “sure bets.”

Granted, VCs have always had much in common with lemmings, preferring to fund “me, too,” companies, as opposed to earth-shattering, high risk products/services that actually moved society in new directions.

From my perch back then on the edge of the VC ecosystem I watched as the “names on the door” retired and were replaced by Wall Street wunderkinds, whose only skill was manipulating money.

для поста с микой

Flickr image credit: billsoPHOTO

What didn’t change was their lemming-like, follow-the-leader investment strategy.

Things haven’t improved much. Continue reading Guest post by Miki Saxon. Entrepreneurs: About VCs