Do startup investors care about how employees are treated where they invest?
The reality is VCs for the most part sort of care.
What I can tell you 100% for sure is one you have even a small team, VCs:
Will all look at your Glassdoor ratings. This is so easy to research / see.
Will all do due diligence at least on how CEO is perceived, internally and externally. After all, this is a big part of the bet. At a minimum, they’ll talk to prior round investors for sure. And anyone in their extended network they know that used to work there.
Do background checks on CEOs and generally all co-founders. This is pretty standard. But sometimes, not much deeper than looking for criminal acts, fines, etc.
Are looking for inspirational leaders, especially in SaaS/B2B. After all, you are always selling as a CEO. To customers.
It all begins with an idea. Maybe you want to launch a business. Maybe you want to turn a hobby into something more. Or maybe you have a creative project to share with the world. Whatever it is, the way you tell your story online can make all the difference.
Mark Suster | Managing Partner @ Upfront VenturesFULL TRANSCRIPT BELOW
We woke up February 2020 with a shock to the system and no idea what it would mean for our business. I just plotted a graph of the Dow Jones industrial average. If you look on the left hand side of the slide, by December 12th, we started to seek cases in Wuhan China. In January 13th, the first cases were detected outside of China. And as you’ll notice, all the way from middle of January to middle of February, the markets didn’t seem to notice. February 22nd, all
Q: What don’t they tell you about venture capital firms?
A few things that aren’t obvious when you raise venture capital:
Your VC partner may leave. There has been much more transition in VC firms in the past 5+ years. Partners leave to found their own firms in particular all the time now. Non-partners leave to join hot firms. You are stuck with the fund as an investor forever. But will the partner you are working with stay?
VCs are well paid, but not close to top founders. The top founders make so, so much more. So yes, many VCs live a pretty good life. And that can be grating as a founder, when they trek over to your crummy office (when we had offices) in their Teslas and such. But the very top founders make so, so much more. The math here: VCs or Founders: Who Makes More? | SaaStr
SaaStr’s New New in Venture Virtual Summit is coming up on May 27th. This will be a 1 day, 2 track event with over 10,000 attendees. (and it’s FREE to attendees). The top VCs in cloud and SaaS will share what’s really going on in venture capital right now if now is a good time to raise a round, and what’s coming next.
Check out some of our sessions! Click the title to register for that specific session.
It’s confusing. Why do VCs need to own “so much”? Why do they often have these specific targets? Isn’t just making your investors a good return enough?
It’s because it’s really hard for VCs to make enough money otherwise.
To meet its own financial goals, a VC firm has to return 3x the amount it invests. And to reach that goal, to simplify, for most VC funds, each investment needs to be able to “return the fund”, i.e. return 1x the entire amount of the fund. Almost all VC firms have this model, that their top winner returns 1x the entire fund.
So let’s break that down for say a $500,000,000 “exit”. That’s a big exit:
If a $25m pre-seed fund owned 5%, a $500m exit would “return the fund”.
In addition, this time we’re adding priority networking so the top founders can meet with the top VCs before and during the event. Priority Networking Passes are Only $299, and you’ll be included VIP in the VC-Founder networking app and processes.
Check out this list of just a few of the firms in attendance:
Q: Are Silicon Valley VC firms suspending or significantly cutting down on startup investments during this pandemic given the vast economic uncertainties of this time, or is it business as usual?
I’m glad you asked! First, come here from 20+ of the top VCs in SaaS and Cloud for FREE at our next big digital event, the next SaaStr Summit: The New New in Venture on May 27th. Sign up here and early session registration is already open!
Let me tell you in 5 points what I’m seeing right now:
Nowhere in VC is it business as usual.
First, everyone with a large portfolio is still doing triage. This is distracting, at best. Portfolio companies that seemed to be doing OK or even Great before are now in trouble. This takes a lot of time to deal with. And we aren’t remotely through it.
Our recent SaaStr Summit: Bridging the Gap was the first time I’ve had a chance to be a participant at a SaaStr event in a long, long time. Too much planning, moderating, etc. I thought I’d share my learnings from the sessions as we put them up on YouTube.
My first set of 10 Learnings is from Mark Suster of Upfront Ventures. The presentation is not only very good, but very compellingly narrated and put together. Take a watch before or after you read the learnings:
1. Remember, We’re Only 30-60 Days Into This. This is something we all almost half forget. Whatever happens, it is still very early.
VCs are Worried about “Deflation” in terms of pricing funding rounds. Mark sees multiples falling, which doesn’t just lead to lower prices … it leads to a Stop. “It makes price discover
Q: What’s the Brutal Truth About Fundraising for Startups?
The brutal truths are:
Everyone wants to fund the same thing. The earlier stage you are, the more different folks will come to different conclusions based on very limited data. E.g., just the team. Or just a few customers. But almost everyone is still looking for the same thing. Unicorns. They just may roll the dice differently in the early days based on whatever tiny signs of pre-success you may have. More on that here.
Pattern matching is rampant. If you are really going to “meet” with 1,000+ founders a year, that’s really too much to process. There are good types of pattern matching, and bad types. Bad types create huge hurdles to founders that do not look, act and talk like privileged founders. “Stripe for _____” or “3 great young engineers from Stanford.”