Zebra’s may fix what Unicorns break, but that hasn’t stopped the investing world from their focus on hunting unicorns. Maybe a little in the impact investing space, but there the world of young companies is split into “startups” and “SMEs” with the latter still looked upon as potential unicorns and the latter often derided as unworthy of investment. Rather than...
Last month I wrote: There are funds that waste the time of startups never actually writing checks. I won’t call them out publicly by name, but one prominent institutional lender just wasted 10 months of time of one my fledglings, and I’m sure they are sitting around as upset with us as we are of them. I thought that was the end of the story. 10 months of conversations and due diligence, two...
The flipside to “unfundable” companies are funds that waste the time of startups never actually writing checks. I won’t call them out publicly by name, but one prominent institutional lender just wasted 10 months of time of one my fledglings, and I’m sure they are sitting around as upset with us as we are of them. First and foremost, investors, if it takes you more than...
This week I taught The Realities of Funding to the entrepreneurs at The Land Accelerator. It’s a depressing topic, as it continues to be true that there are orders of magnitude more good startups than funders. In that talk the word “unfundable” takes a prominent role. This is a word that venture capitalists and many Angels use to describe the 99% of startups that they pass over...
I do a lot of teaching and the latest topic for me is teaching early-stage/Angel investing. As part of that we talk a lot about “norms”, as most of system for investing in startups is wrapped around norms more than logic. I’ll go into why that is some other time. What struck me a few moments ago was an LLC Agreement I was reviewing for an investment. Normally the reasons listed...
My biggest learning from nine years of impact investing is the complexity of the space. I spent the first twenty years of my life as a software entrepreneur, i.e. a techie, and in comparison with venture capital for tech startups, impact is an order of magnitude more complicated. Ultimately the complexity boils down to two issues. 1 – Geography It used to be that 90% of tech investing was...
For years I’ve been talking about California Capitalism, how the traditional model of venture capital doesn’t work outside of the Bay Area, New York City, and Boston, and rather than just rant I’ve been explaining and implementing alternative investment models including revenue-based finance and holding companies. The latest issue of American Affairs magazine includes a deep...
Wall Street has a hot new old tool, the special purpose acquisition company, a.k.a. the SPAC. This is a public company that is nothing more than a pool of capital and set of advisors in search of a business to buy. It is supposedly a more efficient path for private companies to become public companies instead of the following the traditional IPO. At worst it is flawed solution to a flawed IPO...
Out of the 320 million Americans, fewer than 320,000 are Angel investors, investing in startups. Quick math, that is less than 0.1% of all Americans. The ratio only gets worse elsewhere in the world. Why? Investing in startups is complicated. Historically, it’s a skill learned in an ad hoc apprenticeship, with new Angels observing more experienced Angels for months or years. Few people have...
I categorize companies into three categories: A- Companies focused solely on profits, running extractive businesses, unconscious to the needs of their employees, their communities, and the world as a whole. Most of the S&P 500 and Global 1,000 are in this group. B- Companies that truly care about ESG: Environment, Social, and Governance. In short, companies whose management works on improving...
