Business Adm. and Economics student at Koç University
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Lately, we've been talking about how monotone the jobs are and lacking of creativity in most of the big companies, reading this quote made me smile:
"If you're motivated by work quality and access to incredibly talented people, there's no better place to be." by Ex Apple Designer about working at Apple.
I wish we will always be able to work in places where we can say this. Creating value for both sides must be the key for happiness.
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This is a comprehensive research paper to understand how the VCs work. Here are some notes:
Deal Sourcing
The median VC closes about 4 deals per year.
1/4 opportunities lead to meeting the management; 1/3 of those are reviewed at a partners meeting. Roughly half of those opportunities reviewed at a partners meeting proceed onward to the due diligence stage.
Conditional on reaching the due diligence stage, startups are offered a term sheet in about a 1/3 of cases. Offering a term sheet does not always result in a closed deal, as other VC firms can offer competing term sheets at the same time.
Investment selection
VCs ranked the management team (or jockey) as the most important factor(%95). Business (or horse) related factors were also frequently mentioned as important with business model at 83%, product at 74%, market at 68%, and industry at 31%.
Valuation
Exit considerations are the most important factor
Comparable company valuations rank second and desired ownership third.
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As a follower of Prof. Damodaran, that is one of his best talks.
Here are some key takeaways:
Valuation is a bridge between stories and numbers.
- The words used to describe a business can greatly impact its valuation.
- For young companies, the story defines the valuation.
- For mature companies, the numbers drive the valuation.
"when I valued Uber in June 2014, Uber was still startup that a young company losing a lot of money. My entire valuation was built around my story about Uber being an urban car service company that drove my entire valuation. Bill Gurley venture capitalist one of the leading investor in Uber said: You got the story all wrong. Uber is not a car service company, it's a logistics company. He tripled the size of his business. We could be in delivery and moving, we are going to be everywhere. By using the words logistics, my value for Uber was 6 billion, his value is 53 billion and what separated us was the story."
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This is a great book by Irvin D. Yalom, which I loved. It presents snippets from a therapy group and a psychobiography of Arthur Schopenhauer who is known as “ Philosopher of pessimisim”.
“And what is the most terrible thing about boredom? Why do we rush to dispel it? Because it is a distraction-free state which soon enough reveals underlying unpalatable truths about existence—our insignificance, our meaningless existence, our inexorable progression to deterioration and death.”
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On 22 July 2011, a domestic far-right wing terrorist against the government in Norway, started a mass shooting over Youth Group which came for a summer camping on the island of Utoya. It may not be the best movie you will ever watch, even considered by some as a "waste of time". However, the fact that this is a real story, the way the film was shot and the gunshots heard from behind make you feel as if you were there.
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"We're externally reliant on conditions being perfect in order to be able to go out and have a good time."
Great thread about the wisdom of Josh Waitzkin who was recognized as a prodigy, when he was a child. There are really good and original notions that we can adopt. Highly recommend!
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Disappearing of The Malaysia airline MH370 plane with 239 passengers without a trace in 2014 has been one of the most mysterious cases of the airline history. Despite countless theories and investigations for evidence, it is still a mystery…I’ve just finished.
Highly recommended!
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- Upcarta Film Club
I've already recommended this movie but I would like to share it again in our film club. It is about the revolution of eyes: A Molecular biologist whose hobby is photographing people's eyes, discovers that certain eye patterns appear to be re-used, passed on from person to person after death.
