Praying to the God of Valuation
Both Sides of the Table
by Mark Suster
1y ago
Something happened in the past 7 years in the startup and venture capital world that I hadn’t experienced since the late 90’s — we all began praying to the God of Valuation. It wasn’t always like this and frankly it took a lot of joy out of the industry for me personally. What happened? How might our next phase of the journey seem brighter, even with more uncertain days for startups and capital markets? A LOOK BACK I started my career as a programmer. In those days we did it for the joy of problem-solving and seeing something we created in our brains be realized in the real world (o ..read more
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What Does the Post Crash VC Market Look Like?
Both Sides of the Table
by Mark Suster
1y ago
At our mid-year offsite our partnership at Upfront Ventures was discussing what the future of venture capital and the startup ecosystem looked like. The market was down considerably with public valuations down 53–79% across the four sectors we were reviewing (it is since down even further). ==> Aside, we also have a NEW LA-based partner I’m thrilled to announce: Nick Kim. Please follow him & welcome him to Upfront!! <== Our conclusion was that this isn’t a temporary blip that will swiftly trend-back up in a V-shaped recovery of valuations but rather represented a new normal on how t ..read more
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Upfront Ventures Raises > $650 Million for Startups and Returns > $600 Million to LPs
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by Mark Suster
1y ago
Photo by Scott Clark for Upfront Ventures (no, Evan is not standing on a box) Last year marked the 25th anniversary for Upfront Ventures and what a year it was. 2021 saw phenomenal returns for our industry and it topped off more than a decade of unprecedented VC growth. The industry has obviously changed enormously in 2022 but in many ways it feels like a “return to normal” that we have seen many times in our industry. Yves Sisteron, Stuart Lander & I (depicted in the photo below) have worked together for more than 22 years now and that has taken us through many cycles of market ..read more
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Density & the Future of Real Estate
Both Sides of the Table
by Mark Suster
2y ago
Nearly six years ago, I was thrilled to invest in Andrew Farah and the team at Density when they had a vision for building anonymous tracking of how people use office buildings, rentals and other public spaces. And today, as the company announces their latest funding round of $125M at a $1B+ valuation, I’m still thrilled to back Density as they are growing massively with customers like Uber, Shopify, Delta, and Cisco, among many others. Quite simply, the data that Density provides — data that hasn’t been available until now — is changing the way companies, real estate leaders and employe ..read more
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The Changing Venture Landscape
Both Sides of the Table
by Mark Suster
2y ago
The world around us is being disrupted by the acceleration of technology into more industries and more consumer applications. Society is reorienting to a new post-pandemic norm — even before the pandemic itself has been fully tamed. And the loosening of federal monetary policies, particularly in the US, has pushed more dollars into the venture ecosystems at every stage of financing. We have global opportunities from these trends but of course also big challenges. Technology solutions are now used by authoritarians to monitor and control populations, to stymie an individual company’s economic ..read more
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Introducing Trust, and the Importance of Product-Founder Fit
Both Sides of the Table
by Mark Suster
2y ago
Photo by Vanna Phon on Unsplash Customer acquisition is the lifeblood of many startups from e-commerce to gaming to marketplace companies, among others. Most of these startups spend the lion’s share of their marketing budget in today’s social media channels: Facebook, Twitter, Reddit, Snap, TikTok and so on because — no surprise — that’s where the customers are. Digital advertising spend is projected to grow 25% this year to $191 billion, and Google (69%), Facebook (59%), Snapchat (116%) and Twitter (87%) all just reported rapid growth in their year over year advertising revenues. For the ..read more
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On Funding — The Denominator Effect
Both Sides of the Table
by Mark Suster
2y ago
On Funding — The Denominator Effect I recently wrote a post about funding for investors to think about having a diversified portfolio, which I called “shots on goal.” The thesis is that before investing in an early-stage startup it is close to impossible to know which of the deals you did will break out to the upside. It’s therefore important to have enough deals in your program to allow for the 15–20% of amazing deals to emerge. If you funded 30–40 deals perhaps just 1 or 2 would drive the lion’s shares of returns. You can think of a shot on goal as the numerator in a fraction where the ..read more
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On Funding — Shots on Goal
Both Sides of the Table
by Mark Suster
2y ago
On Funding — Shots on Goal Being great as a startup technology investor of course requires a lot of things to come together: You need to have strong insights into where technology markets are heading and where value in the future will be created and sustained You need be perfect with your market timing. Being too early is the same as being wrong. Being too late and you back an “also ran” You also need to be right about the team. If you know the right market and enter at this exact right time you can still miss WhatsApp, Instagram, Facebook, Stripe, etc. I’ve definitely been w ..read more
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What Mistakes Do VCs Make When Fundraising?
Both Sides of the Table
by Mark Suster
3y ago
A few weeks ago, I had the pleasure of talking to Samir Kaji on the Venture Unlocked podcast about a wide range of topics that we as venture capitalists think about everyday, including: How to build a generational firm — retaining partner talent and finding the complimentary networks and skillsets firms need to succeed over time The state of venture today and how COVID crammed 10 years of technological change into one accelerated year The human psychology of decision making and one book I think every VC should read How to get LPs to become true believers and why I think data rooms ..read more
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Playing the Long Game in Venture Capital
Both Sides of the Table
by Mark Suster
3y ago
Silicon Valley and the media industry that surrounds it values youth. The culture is driven by the 20-something irreverent founder with huge technical chops who in a “David vs. Goliath” mythology take on the titans of industry and wins. It has historically been the case that VCs would rather fund the promise of 100x in a company with almost no revenue than the reality of a company growing at 50% but doing $20+ million in sales. The Valley has obsessed with a quick up-and-to-right momentum story because we were thought to live in “winner take most” markets. Since funds were driven by extr ..read more
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