Venture Alpha: The Stars Came Out to San Francisco

Thomson Reuters’ Venture Alpha 2012 event Thursday in San Francisco, we heard from investing and entrepreneurial legends including Benchmark GP Bill Gurley, DCM founder Dixon Doll and AOL founder Steve Case. Visiting the InterContinental Mark Hopkins Hotel on Nob Hill, VCs, entrepreneurs and dealmakers gathered for a day-long series of talks and meetings on the state and future of the venture capital industry.

Bill Gurley_Venture Alpha 2012_horiz
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Bill Gurley to LPs: You are Blowing It

Bill Gurley has a message for institutional investors: Stop blasting money at what have historically been top-tier venture funds. “You’re not in the stands. You’re in the field. And when you allocate [your capital] obsessively to firms in the top quartile, it will have an impact on how things play out.”

Silicon Valley Reacts to Jobs’ News: ‘Visionary Founders Matter Most’

“Funny how much emotion you can feel about a stranger. And yet every phone call I make, every time I’m on my computer, he’s part of it.” The words belong to writer Susan Orlean, writing yesterday about famed entrepreneur Steve Jobs. But one imagines that millions of people experienced the same, queer feeling, following the […]

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Bill Gurley: All Revenue Is Not Created Equal: The Keys to the 10X Revenue Club

“Don’t you know that you are a shooting star,
And all the world will love you just as long,
As long as you are.”

– Paul Rodgers, Shooting Star

With the IPO market now blown wide-open, and the media completely infatuated with frothy trades in the bubbly late stage private market, it is common to see articles that reference both “valuation” and “revenue” and suggest that there is a correlation between the two. Calculating or qualifying potential valuation using the simplistic and crude tool of a revenue multiple (also known as the price/revenue or price/sales ratio) was quite trendy back during the Internet bubble of the late 1990s. Perhaps it is not peculiar that our good friend the price/revenue ratio is back in vogue. But investors and analysts beware; this is a remarkably dangerous technique, because all revenues

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Android: The Ultimate Loss Leader (Also A Moat)

Bill Gurley doesn’t blog often. But when he does, his posts are often worth reading. This is the case with the Benchmark Capital general partner’s piece this week on the threat posed by Google’s Android software for cell phones and tablets, and the software’s key defensive role for the Internet titan. (Gurley’s last post was […]

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Winning! or Losing? A Look Into the Super-Fund Movement

It’s become something of a bromide in Silicon Valley that pouring as much money into a relatively few break-out companies as quickly as possible is the only way to win in venture capital. In an interview with this reporter in 2009, Marc Andreessen made a strong case for this winner’s circle school of investment. He […]

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Will China Play Nice with U.S Exchanges?

Yesterday, I caught up with Doug Chu, a former investment banker turned head of the NYSE’s Silicon Valley office. It was a candid discussion that touched on a number of interesting data points, not all of them encouraging for the NYSE.

1.) Unsurprisingly, Chu agreed with Bill Gurley about there being a disconnect between what’s happening in Silicon Valley and elsewhere on the IPO front. In his widely read blog post of earlier this week, Gurley observed that the Valley has come to believe there’s a dearth of IPOs in part because many companies going public are based elsewhere in the country. Chu suggests Gurley should have included China in the conversation. There’ve been 122 IPOs in the U.S. this year, and 25 have been China-based companies listing in the U.S. – a huge percentage.

IPO Market Not All Bad…Especially If LinkedIn Files

The IPO market for technology companies has been lousy lately. But it’s not all doom and gloom, if venture capitalists, such as Bill Gurley, are to be believed. “The buyside is hungry for growth stories,” says Gurley (pictured), a general partner at Benchmark Capital. Gurley spoke on stage this morning at the TechCrunch Disrupt conference […]

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Bill Gurley on Rivalry in the Valley, Facebook’s Future and What He Makes of Digital Sky Technologies

Benchmark’s Bill Gurley is an exceedingly busy guy. He’s a dad, he’s a sought-after speaker, and he’s on the boards of 11 companies, including Zillow, Nanosolar and online video guide startup Clicker. Gurley also still posts a thought piece at least once a month at his widely read blog, Above the Crowd.

In short, it’s hard to get Gurley on the phone. But today, as he drove to the airport for yet another meeting, he made time to talk about Facebook’s direction, Digital Sky Technologies, and angel investors among other things. Get a transcript after the jump…

Venture Capital Industry Shrinkage?

Benchmark Capital’s Bill Gurley yesterday wrote on his blog that the VC industry is going to shrink substantially over the next several years. Specifically, he argues that large institutional investors will decrease their allocations to venture, although not abandon it entirely (due to CAPM and contrarianism). The typical reaction from readers — including many of you who sent me emails — was appreciative slobbering.

I strongly encourage you to read what Bill wrote. Go ahead, I’ll wait.

Ok, now let me tell you why I think he’s wrong. Not on describing the overall environment (he’s got it nailed), but on what the end result will be.

Specifically, I believe that the number of institutional investors cutting back on VC commitments will be small, compared to the number either maintaining or increasing their allocations. It’s easy for us to get caught up in the doings of big-name, liquidity-challenged endowments like Harvard and Yale, but they really are just a tiny drop in the overall LP bucket. In fact, all the Ivy Leaguers combined probably have less committed to venture capital than does CalPERS alone (and it recently increased its alternatives allocation)…

The VC Problem Explained Simply

If you’re looking for an easy-to-understand explanation for the problems facing the VC business, check out Bill Gurley’s essay: “What Is Really Happening to the Venture Capital Industry?”

It does an exceptional job of explaining in plain language why the venture industry is shrinking. You can argue with Bill’s analysis, of course, but you can’t argue with the facts that he’s laid out. Definitely worth reading, especially on a slow summer day. Check it out here.

Q&A With Benchmark’s Bill Gurley

In an opaque market that has the world unsettled, Benchmark’s Bill Gurley has been doing his part to be more transparent. In early October, representing Benchmark, he authored a letter of advice to the founders Benchmark has backed, letting them know that while Benchmark remains supportive, it predicts a long and lumpy road. Gurley, a  […]

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Benchmark Capital Likely to Invest in Public Companies

Two weeks ago, Benchmark Capital sent a note to its entrepreneurs, warning that the recent downturn in the public markets meant bad news for startups, too, including less access to other forms of capital like angel and debt funding, lower valuations, and, likely, some hard decisions around headcount. Turns out the financial crisis is prompting […]

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