Venture Capital

In today's episode, Peter and Jon answer questions such as:

1. How much annual recurring revenue is needed to raise a Series A?
2. How many users do you need to raise a Series A?
3. Is $1,000,000 in revenue enough? 

What are the current standards, and has the market changed historical benchmarks? Join us for the podcast to find out!

Some Points  Covered in This Episode Include:

If you have heard anything about the Carried Interest Loophole Act, you know it's the biggest news in the last few days. What does it mean and what does it entail if it were to be passed.

The "carried interest loophole" allows hedge fund managers to tax their income at a lower rate than an ordinary salary. 

Peter will weigh in both sides and discuss how fair is it. 

Don't forget to tell us, where do you stand on it.

Follow Peter Harris

Twitter: https://twitter.com/thevcstudent

LinkedIn: https://www.linkedin.com/in/peterharris1

Instagram: https://instagram.com/shodanpete

Youtube: https://youtu.be/Hy9DsuFzTH4

Follow University Growth Fund

Website: https://www.ugrowthfund.com/

LinkedIn: https://www.linkedin.com/company/university-growth-fund/

Instagram: https://instagram.com/ugrowthfund

Follow Jon Bradshaw

LinkedIn: https://www.linkedin.com/in/mrbradshaw/

Instagram: https://www.instagram.com/mrjonbradshaw/

Twitter: https://twitter.com/mrjonbradshaw

Youtube: https://youtu.be/spRuy517if0

Have you ever wondered what Venture Capitalists think of Y Combinator companies/investments?

In 2022 the program has significantly changed. It went from accepting 10 startups with each class to 400 in a recent cohort. 

Learn about the Pro's and Con's of the program from a venture capitalist that has funded YC companies.

Peter and I provide anonymous feedback to a first-time founder. 

We talk about their revenue numbers, team size, and if this startup should attempt to raise venture capital.

How to Start a Syndicate

In today’s episode we find how one gets into Venture Capital and deep dive into everything about a Syndicate. 

Some Points Covered in This Episode Include:

1. What is a syndicate, and how is it different from an SPV?
2. What is the appeal of a syndicate?
   1. As an investor
   2. As a company
   3. As a manager
3. How do syndicate managers/operators make money?
   1. Syndicates also charge carry - usually 20% in total. Carry is a cut of positive returns generated by the investment. Example: let's say you invest $1000 in a syndicate with 20% carry. If the investment returns $2000, the syndicate would earn $200 in carry. 20% * ($2000 - $1000).
   2. https://angel.co/syndicates/for-investors#requirements
4. Who are the most common syndicate leaders?
   1. Jason Calcanis
      1. Uber
      2. Calm
   2. Dave Eisenberg
      1. Coinbase
      2. Warby Parker
   3. Tom Williams (from Apple)
      1. Layer 6
5. How do you manage a syndicate?
   1. AngelList
   2. Assure
   3. Attorney/Accountant
6. What does it cost to start a syndicate?
   1. AngeList charges a one-time fee of ~$8,000
   2. https://angel.co/syndicates/for-investors#requirements
   3. Hidden costs of finding investors
7. What are the SEC/accreditation rules for starting one?
   1. Salary of $200k+
   2. Net worth of $1M+
   3. Work in industry
   4. https://help.venture.angel.co/hc/en-us/articles/360047682112-What-is-an-accredited-investor-
8. Who should start a syndicate?
9. Who should not start a syndicate?
10. Areas of specialization:
    1. Geography
       1. Utah-based
    2. Industry based
    3. Alumni Syndicates
       1. Facebook
       2. AirBNB

Let us know your thoughts on a Syndicate? How do you feel about them? What should we talk about next? Give us a follow and leave us feedback.

Follow Peter Harris

Twitter: https://twitter.com/thevcstudent

LinkedIn: https://www.linkedin.com/in/peterharris1

Instagram: https://instagram.com/shodanpete

Youtube: https://youtu.be/Hy9DsuFzTH4

Follow University Growth Fund

Website: https://www.ugrowthfund.com/

LinkedIn: https://www.linkedin.com/company/university-growth-fund/

Instagram: https://instagram.com/ugrowthfund

Follow Jon Bradshaw

LinkedIn: https://www.linkedin.com/in/mrbradshaw/

Instagram: https://www.instagram.com/mrjonbradshaw/

Twitter: https://twitter.com/mrjonbradshaw

Youtube: https://youtu.be/spRuy517if0

How is Data Science improving Venture Capital?

Jon asks Peter everything about data science. What data sources are they currently using? And how much will it disrupt the functioning of Venture Capital firms.

Some Lies/ Points  Covered in This Episode Include:

1. Would you say data science is changing things?
2. What Data Sources are University Growth Fund are using at this point?
3. For seed and early-stage firms, when data is almost non existent, will it be a barrier
4. A venture capital deal pipeline has three key elements: sourcing, benchmarking and value-add. Can Data science help on all three fronts?
5. What are some of the other challenges you foresee?
6. It’s a very intuitive field, do you think backing it with numbers and data will give VCs clarity while making decisions or make them second guess their intuition on                                                things that really matter- word of mouth, integrity, past personal or peer experiences.Things that data can’t support.
7. Often, data from sources such as Twitter, LinkedIn, Pitchbook, Crunchbase, and AngelList are obtained and then pooled and organized. The organization and manipulation of third-party data can be time and labor-intensive. Pooled third-party data that is improved and arranged in a customized manner can eventually become proprietary in nature. Your thoughts?
8. Once VC ventures become data backed, they will need to hire or re-organise teams that can collate and work with such data. How soon do you see that shift coming

PS-  it may call for a different talent sourcing model and organizational structure, with resulting implications for the structuring of compensation and incentives.

1. For example, the venture capital firm Social Capital has built an automated system to invest in startups without meeting them. Companies upload data about themselves, and if the firm’s algorithms score the companies well, the firm backs them with an investment. The process was designed to keep bias from entering the equation. By mid-2018, the firm had assessed over 5,000 startups and invested in 60. Most of the investments were in companies based outside the major venture capital markets of the Bay Area and New York, and many were based overseas. About 80% of the companies featured non-white founders and 30% featured female founders. Do you see them as outliers or can that be the upcoming trend?

Let us know your thoughts on data science/ AI changing the Venture capital? What should we talk about next? Give us a follow and leave us feedback.

Follow Peter Harris

Twitter: https://twitter.com/thevcstudent

LinkedIn: https://www.linkedin.com/in/peterharris1

Instagram: https://instagram.com/shodanpete

Youtube: https://youtu.be/Hy9DsuFzTH4

Follow University Growth Fund

Website: https://www.ugrowthfund.com/

LinkedIn: https://www.linkedin.com/company/university-growth-fund/

Instagram: https://instagram.com/ugrowthfund

Follow Jon Bradshaw

LinkedIn: https://www.linkedin.com/in/mrbradshaw/

Instagram: https://www.instagram.com/mrjonbradshaw/

Twitter: https://twitter.com/mrjonbradshaw

Youtube: https://youtu.be/spRuy517if0

Common Lies VCs Hear

Truth or optimism. VCs hear multiple people talk about their plans, their business and they toe the line of sometimes being overly optimistic that it could be a lie. Here is what not to say, or how to frame it differently next time. 

Some Lies/ Points  Covered in This Episode Include:

1. Saying your market is a huge number/ some ridonculous billion $ industry, but the fact is you dont know whats the sub sector or specific part of the market you are targeting
2. All we need is get 3% of the market
3. Our contract with a “big company” is going to be signed ANYTIME NOW.But the truth is that the process is much longer. So over committing your  investors is no good. Play low key when talking about accomplishments, and surprise with news
4. There is no competition. No one else can do what we can do OR we have the first mover advantage
5. They mis- estimate the sales plan. Give an unrealistic time period- 45-90 days of sales cycle
6. My projection is conservative. Is it really?

Let us know what are the common lies you have heard? What should we talk about next? Give us a follow and leave us feedback.

Follow Peter Harris

Twitter: https://twitter.com/thevcstudent

LinkedIn: https://www.linkedin.com/in/peterharris1

Instagram: https://instagram.com/shodanpete

Youtube: https://youtu.be/Hy9DsuFzTH4

Follow University Growth Fund

Website: https://www.ugrowthfund.com/

LinkedIn: https://www.linkedin.com/company/university-growth-fund/

Instagram: https://instagram.com/ugrowthfund

Follow Jon Bradshaw

LinkedIn: https://www.linkedin.com/in/mrbradshaw/

Instagram: https://www.instagram.com/mrjonbradshaw/

Twitter: https://twitter.com/mrjonbradshaw

Youtube: https://youtu.be/spRuy517if0

Is Venture Capital Slowing Down?

A quick look at the sudden decline in the numbers. Looking at the numbers from Q4 and Q1 to analyse if there is a shift or worse a slow down coming. What do you think?

Questions Covered in This Episode Include:

1. In Q1, 4,822 VC deals were closed totalling $70.7 billion, which was far below the $90 billion of VC investment in Q4 2021. Are you seeing the trend too?
2. Why do you think that’s happening?
3. Are q2 numbers going to be alarming?
4. Looks seed funding actually saw a boost of 14% while late stage funding is down by 19%. Is there a telling sign of something? Why do you think that has happened
5. The big reason for these numbers have been low activity on mega deals. Do you think people are getting averse to bigger risks
6. Overall why do you think 2022 will be still a good year for the VC industry/ better than few years
7. “The value of technology stocks began to decline in late 2021, a slide that continued into 2022, leaving many tech shops trading at a stiff discount to their recent valuation highs.”- Do you think VCs love for tech will shift
8. How are these dwindling numbers going to change the VC ecosystem- 

Let us know what you think about the shift? Do you predict a slow down too?. What should we talk about next? Give us a follow and leave us feedback.

Follow Peter Harris

Twitter: https://twitter.com/thevcstudent

LinkedIn: https://www.linkedin.com/in/peterharris1

Instagram: https://instagram.com/shodanpete

Youtube: https://youtu.be/Hy9DsuFzTH4

Follow University Growth Fund

Website: https://www.ugrowthfund.com/

LinkedIn: https://www.linkedin.com/company/university-growth-fund/

Instagram: https://instagram.com/ugrowthfund

Follow Jon Bradshaw

LinkedIn: https://www.linkedin.com/in/mrbradshaw/

Instagram: https://www.instagram.com/mrjonbradshaw/

Twitter: https://twitter.com/mrjonbradshaw

Youtube: https://youtu.be/spRuy517if0