Everyone Is Getting Discounts… VC’s Want One Too (Part 1)

Posted by Jeff Lu on March 12, 2009

My colleague on Twitter... the 2nd time someone commented to me on VC down rounds

Last week I heard two people comment to me about venture capital firms (VC’s) making a collective effort to use the economy as an “excuse” to lower valuations… and why shouldn’t they want a discount? Everywhere I look I see clothes, electronics, cars, services and, of course public equities being sold at a significant discount from what they were sold for the same time last year.

Originally, the main purpose of this entry is to talk about private company valuations and how VCs can make capital more expensive without lowering valuation, but now I’ve decided to divide this into a 3 parts.  Part 1 will cover valuation of early stage companies, part 2 will cover how the the public equity markets are affecting private equity valuations and part 3 will cover down rounds and intricacies of term sheets.

WAIT! There is more to read… read on »

Use What You Preach!

Posted by Jeff Lu on February 25, 2009

Tweet!

A few of us at Cascadia were working late last night and we had an interesting discussion about investment banking and the sectors we cover.  I said that my favorite part about being an Internet investment banker is that for the most part, I get to actually use and test the products myself.  I “get” it when a Company offers a compelling consumer service because I use these services everyday.

I could read research reports and Techcrunch all day about consumer technologies but there’s no research like first hand research.  Take Twitter for example.  If I was reading a business description of Twitter, it would read something like this: “Twitter is a micro-blogging social network platform that empowers users to constantly and easily communicate with their friends.”  If you could dissect that sales pitch you would think: “why would I want to do that? Doesn’t Facebook or my blog already serve that function?” WAIT! There is more to read… read on »