50 Surprising Facts We Learned From Our First 100 Investments
Venture capital is, at its core, about finding and solving problems at scale. The best business plans are those that can describe the size and scale of the problem and the proposed solution, and the value that will result from building it. And the best of the best are those that grab your attention using a single, surprising data point that demonstrates the scale of the opportunity.
The First 100 Are Funded!
Three years ago, upon finishing our first fund, we embarked on a journey to create a new kind of venture fund, based on our research into 20 years of venture investing, technologies that we could use to modernize the investment process, and structures that might enable a new, more democratized approach to sourcing investment.
US Immigrants Are Vital To VC Returns
The scale of the returns enjoyed by US tech investors from companies started by US immigrant entrepreneurs versus the scale of returns generated by non-immigrant entrepreneurs is rarely discussed. We just ran the numbers.
Hatcher+ v2.0 Release
What do you get when you combine four million dollars, one of the world's top data scientists, a bevy of application and infrastructure designers, 26 of the world's best APIs, 36,000 profiles, 9,000 deals, over 200 partners, and thousands of users? You end up with a pretty darn useful investment management platform - with some pretty useful features.
The Golden (Selection) Ratio
When we decided we wanted to determine what selection ratio we should adopt - i.e. how many deals we should fund out of every thousand in order to create a 1,350 company portfolio for our H2 fund, it was obvious where to look.
The Time-Traveling VC
Equities traders have always been on the cutting edge of technology. Since the invention of the telegraph and the laying of the Trans-Atlantic Cable in the 1800s, traders have always understood that knowledge is power - and that in order to profit from that power, you need to be able to do two things: obtain access to the knowledge faster than anyone else, and have the ability to act on that knowledge in the fastest way possible.
We Created a Venture ETN - Here's Why
A few months ago, we officially launched the Hatcher+ Venture ETN (Exchange-Traded Note) - a publicly-tradable security designed to enable family offices, HNWs, and corporate VCs an easier way to invest into venture. We launched it after a series of extremely enjoyable lunchtime workshops with leading asset managers and fin-tech influencers in Beirut, Dubai, Geneva, Hong Kong, Istanbul, London, Paris, Singapore, Sydney, and Zurich. Here's a summary of those discussions - and the key reasons why we added a Venture ETN to our arsenal:
The Crane's Neck - Using Data To Improve Startup Portfolio Construction
One of the myths that persists about investing in startups is that little useful data is available at the earliest stages of a startup. Based on our analysis of tens of thousands of early-stage companies, and our continuing detailed analysis of thousands of early-stage deals every month from multiple co-investment partners and users of our BPA platform around the world, we would beg to differ.
8 Easy Places To Start Up
The UK is getting a lot of bad press lately because of Brexit - which tends to overshadow the fact that the UK is ranked by the World Bank as the least costly place to start a business (along with Slovenia), and the 8th easiest country to do business with in the world, after New Zealand, Singapore, Denmark, Hong Kong, Korea, the Republic of Georgia, Norway, and the US.
Your Startup Should be in an Accelerator
Graduates of accelerator programs are increasingly showing up in unicorn lists and data is increasingly available that shows these companies are raising more money - and surviving and thriving longer - than non-accelerated startups. So how hard is it to get accepted into a leading accelerator program? The answers may surprise you.
Is Unicorn Hunting a Good Strategy?
I just landed in Dubai from Helsinki, where I heard (and overheard) any number of pitches from startups attending the SLUSH event. What interested me most was overhearing the investors. From their questions, it quite quickly would become clear what type of investor they were - a government entity, an ex-entrepreneur, a unicorn hunter, a financial investor... and that got me thinking - how many investors really understand their motivation for investing? How many are honest with themselves about their mandate? And how many *really* want to make money?
Hatcher+ is Investing in One New Startup Every Day
Last month, we invested in one new startup every day - a rate that now ranks us as the most active venture investor in the world (or at the very least, among the top three.) These deals include some of the best new startups to be found anywhere. We're planning on keeping up this rate of investment for the next three years, using a staff of less than ten people. How is this possible?
How Many Millionaires?
Last night, I watched a video presented by Richard Wilson, CEO of the Family Office Club, that I thought did a very good job of covering many of the core, operational and deal flow management problems faced by family offices.
The AI-Powered, Highly-Automated, Global-Diversified, Exchange-Tradable VC
After a year and a half of positioning ourselves as "data driven venture investment", we've decided it's time to update the way we communicate the strategy behind Hatcher+. "Data-driven venture investment" misses three of our four core strategies, and doesn't capture the scale of what our model is capable of. So, we've come up with a new slogan: "The AI-powered, highly-automated, global diversified, exchange-tradable VC.
The Next Generation of Family Office Investors Has Arrived
Today's family offices are investing in venture capital deals at an exponentially growing rate. It's now common to see family offices alongside VCs at startup events and alternative investment conferences. Allocations are approaching - and in many cases exceeding - double digits. And several...
Venture Capital Simplified - The Rule of 5X
For many people starting their first startup, venture capital is like some kind of "black box" that operates according to frustrating, sometimes complex rules that are designed for industry insiders, not first-time entrepreneurs. With this post, I'm going to try and lay out a simple system,...
The Four "Hows" - What Investors Need to Hear
Investors that are active in VC have already made the decision to allocate capital to that area. They already know the risks and the approximate time it's going to take you to get them their money back. They have a range in mind of how much they expect to make in terms of returns. Given all...
How to Create a Killer Demo Day
The process of selecting startups gets a lot of focus when talking about accelerators - and deservedly so. But all that hard work - and all the hard work that follows during the next 90 or 180 days - doesn't mean anything if your Demo Day isn't well-planned, and better-executed. We've spent the...
Is Your VC Intelligent?
If you're a venture capitalist reading this headline, please take a moment and check your gut reaction to the question being posed here. Did the mere suggestion that there might be a lack of intelligence at your firm make you angry? Or did you smile upon reading it, and feel a warm glow...
Hatcher H2: The World's First Exchange-Tradable, Early-Stage VC Fund
Two days from now, the world's first early-stage, globally-focused, exchange-tradable VC fund will be open for business - I'm talking of course about our very own Hatcher+ H2 fund, which will list on the Euronext (Amsterdam) and Wiener Bourse exchanges this coming week. Obviously we're excited...
Right Now is THE Best Time Ever to be a Startup
Yesterday, we put out an announcement about a data-sharing partnership we're building with Funderbeam, an emerging blockchain-powered exchange, that we expect will result in a new way for startups to find funding. Today, we agreed a deal in which one of the leading accelerators in Europe will use...
Buying Ethereum - The Five Minute Guide
Six months ago, when Bitcoin was trading at US$2,150 or thereabouts, I was attending a conference in Seoul when an economist/fund manager named Mark Yusko made a bullish statement in an otherwise bearish sea of predictions around global asset values - he said "Bitcoin has the potential to rise...
Stop Sweating the BIG Stuff
One question I get asked a lot on investor panels these days is "what makes a great CEO?" To me, the answer is simple: the best CEOs make sure that investors are never, ever surprised - by the Big Stuff.What do I mean by the Big Stuff? I'm not talking about the stuff that is normally...
Reinventing Venture Capital
Venture capitalists are experts when it comes to scaling. You might even say that recognising that a startup has the attributes (and technology) necessary to scale is *the* core attribute of a successful venture investor. And you could say with equal conviction that if there's one value-add...
The New Rules of Fundraising
This week at SLUSH Singapore, I gave a presentation on the New Rules of Fundraising - how entrepreneurs can prepare for the new, data-driven startup ecosystem powered by AI-based engines such as HAL (YCombinator) and DART (Hatcher) . Here's the slides and some notes from the talk - and thanks...
Singapore Has Over 100 VC Firms - and USD500Mn in Dry Powder
Hatcher+ has done a lot of analysis on startup ecosystems in various places around the world during the past two years. From Abu Dhabi to Zagreb, we've looked at over 300,000 investment events, more than 300 accelerators, and 7,200 venture investors, ranging from the largest venture firms to the...
Killer Robots Are Already Here
This week, Elon Musk and the heads of a number of technology companies warned against the development and deployment of ''killer robots''. This warning is unfortunately five years too late - the killer robots are already here. The unsurprising part? They have been brought to us by US-based...
The Economics of Hope and Dreams
I listened to a BBC Radio interview today with Mary Williams, the adopted daughter of Jane Fonda, and there was one part of the interview that I just found riveting, because I'm not sure that I've ever heard "the absence of hope" so clearly articulated. Ms. Williams, who grew up poor in East...
How Medieval Accountants and AI Created the Jobless Future
There is a rising realization in the world that we are currently just treading water with respect to the creation of new jobs, and that AI and robots are eventually going to take our jobs - as in pretty-much *all* of our jobs.Gone are the days when "the professions" were immune from these changes -...
Achieving Gender-Parity in Tech
I just finished reading comments related to the news on the 500 blog that Dave McClure is stepping down as CEO at 500 Startups. From those comments, it's clear that there is still a lot work to do - by all of us - to get to gender parity in tech. Thankfully, the tech industry is not exclusively...
How To Get Startups to Report KPIs
Let me skip the preamble and just come out and say it: most startups suck at reporting. And by reporting, I mean updating investors like us. Left to their own devices, most founders I know would prefer to spend 100% of their time building product, pausing only to acknowledge the presence of a...
AI and Machine Learning: The Poincare Five Step Process
In 1908, Henri Poincare, the famous French mathematician, and pioneer of what we now call machine learning, wrote down what would later become the four stages of the "Gestalt" model of learning and psychology: Saturation, Incubation, Inspiration, and Verification. Einstein, who found Poincare's...
Venture Investing and the 80/20 Rule
Almost a year ago, my Hatcher partners and I went looking for data that would give us an indication of our progress vis a vis the rest of our colleagues in venture capital. This set us on a nearly year-long journey of discovery, in which we looked deeply at data for nearly 20,000 deals, dozens of...
How to Get the Most out of Hatcher
The first thing you need to know about Hatcher is that Hatcher combines a workflow solution for investors with a data analysis platform, to provide a complete, next-generation investment platform for venture. And the most important thing to know about both our data technologies and our workflow is...
The Upside of Being Positive
One of the hardest things about being a startup founder is staying positive in the face of constant, and often intellectually exhausting criticism. The most depressing part is that while it's terribly easy to poke holes in almost any business thesis, it is much more difficult to explain why,...
9 KPIs for Venture Guys
There's a lot of opinions available regarding the best choice of KPIs for startups - but what about the investors behind the startups? What are the KPIs that venture guys should be aware of? Here's nine suggestions from Hatcher:1. LP HappinessThe basis function of a venture capital company is...
The Rise of “Cut and Paste” Data Management Platforms
The problem involving whether to build or buy a cloud-based data platform to serve your workspace’s growing needs involves come complex issues. It’s usually a good idea to start with some basic questions. 1. Does a similar platform currently exist? (Can it be purchased?)2. Would it provide...
100,000 PCs The World Will Never See
100,000 - that's how many PC's the new advertising campaign from Microsoft and Intel could have put into startups or schools this week, by using their $70,000,000 ad campaign more smartly. At four PCs a startup, that might have made sense - and made a difference to the amount of apps available...
The Philippines - An Emerging Fintech Powerhouse?
I just got back from three days in Manila - first time I've been in several years. If you haven't explored this market, you should - because there simply are not that many like it in the emerging world. The Philippines is largely English-speaking, 100 million strong (110 million if you count...
The Most Unrewarding, Misunderstood, Underrated Job on the Planet
If there existed an award category for "most unrewarding, misunderstood, underrated job on the planet", the strongest contender for that title would, in my opinion, be "Head of Sales." At a startup. :-) If you've just been offered that job, and were looking forward to a rewarding,...
Why This CEO Learned How To Code - And Why You Should Too
People are generally impressed when they find out I've recently put six long years into learning about database design, programming, and UI design. But they shouldn't be - like many things, coding is actually pretty easy - and made all the easier because of how much fun it is. But I'm...
Georgia (Republic Of) On My Mind
In November, Harveen and I got the chance to visit Tehran and discovered a population almost the size of Germany and an emerging market that is about to become a "must go" destination (see "Reading Term Sheets in Tehran") - so last week, when I was invited to visit the Republic of Georgia by our...
Why Hatcher Loves Emerging Markets
Last week, I visited our new partners in the beating heart of South America - Sao Paulo and Rio. And while I knew I was entering a large population center, I was unprepared for how large it actually was, and lacked the tools to understand how large Brazil's commercial cities were on a comparative...
Using Planetary Motion to Spot Bad Startups
Non-performing startups are not always easy to spot. From a distance, some of the very worst can appear to be doing everything right - charming founders, great product, nice office, lots of press - and a business objective that promises massive returns to the shareholders. So how can we spot...
Start-Ups Led by Fifty Year Olds Do Better
If you're an older CEO running a startup, chances are you're running a Hatcher startup. Because we "skew older" - we go out of our way to look for entrepreneurs that have a bit of scar tissue, as opposed to 20-year-olds with zero experience dealing with tough times. Why? Partly because we've...
Telr Closes Over-Subscribed Series A
Telr, the merchant payment platform we created last October, and merged with Dubai-based Innovate Payments in June this year, has just completed an over-subscribed Series A fund-raising, led by Hatcher and iMENA, based in Amman, Jordan.Congrats to Elias, Sirish, Andy, Phil, Keith, Cat, and the rest...
Why Hatcher Loves the Next Generation of Financial Services
Charles Moldow posted a thoughtful article yesterday on TechCrunch entitled "How A Trillion-Dollar Market Remains Hidden In Plain Sight", arguing that there is a massive opportunity in financing non-bank financial services. We agree - and we've been extremely active in this area. If you include...
Hatcher is "Go" for Launch!
Yes - after almost a year of "self-incubation", Hatcher.com is going live next Monday 22nd, September. We're excited!Conceptually, we'll still be doing what we've always done: investing in great teams and businesses. Except that this time we're going to do it more efficiently than before - by...
Reading Term Sheets in Teheran
First, a disclaimer. There are many negative articles to be found about Iran. This is not going to be one of them. In contrast, this, you will find to be an unabashed love note. Iran, as it turns out, is much more interesting than many in the media would have you believe, and includes a...
Why China Kicks Ass
I had a meeting yesterday with the CEO of an entrepreneurial hardware venture that is looking for funding from us. The guy recently moved to China to take advantage of the rapid prototyping capabilities to be found in Shenzhen. I asked him if there was really that much difference between doing...
The Three Reasons Investors Invest
Pitching a new business proposition to an investor isn't rocket science - in fact, the most effective pitches involve, of all things, empathy. As in, an understanding of why the person you're sitting in front of is sitting there in the first place. 1. Wealth Creation (The "Big Win")In my...
Series A Zombies
Every day, I meet entrepreneurs who are struggling to raise their first real round of funding. Series A money (or the lack of it) seems to be standard fare conversation among entrepreneurs located in any city outside Silicon Valley.As well it should be. Because it doesn't matter how good your...
Every Business Model That Has Ever Existed
One of the most vexing problems for startups is figuring out what revenue model to apply. True innovation is rare - humans have been trading for centuries using just about every conceivable model. With the possible exception of Google Adwords' second-highest bid model, the last truly great...
The Next Wave of Investment in Startups
Money hates being idle. And there's more around of it than ever before - as evidenced by soaring luxury goods sales and stratospheric stock markets, and the refusal of buyers in real-estate markets in already-hot locations like Singapore and Beijing to take a hint from governments bent on cooling...
Convertible Notes Explained
There's a lot of blog posts out there about why startups shouldn't use convertible notes to raise capital. Some people really don't like convertibles (like Union Square Ventures partner, Fred Wilson), others lump them in with Bridge Loans, still more position them as something you should hold at...
Founders: Get Your Fair Share of Equity
The truth is rarely told but known by everyone: not every founder of a start-up does an equal amount of work. And some do no work at all - yet insist, when pushed, that they are worth every non-earned cent - because "they're a founder". Hogwash. Here's four things to think about when you're...
The Hatcher Worldview
The idea behind Hatcher is, simply put, the application of the emerging crowd-funding model to investors that are sophisticated and experienced, and entrepreneurs that are executing on their vision for market leadership. Why do we think the world is ready for Hatcher? Simple. There is a lof...
Review: Business Model Generation
While browsing in an airport bookstore, I recently came across a copy of Business Model Generation - a Wiley publication written by Alexander Osterwalder and Yves Pigneur. If you're looking for an inspiring thought-starter when writing your next business plan or presentation, especially if...
The 20:20:20 Rule of a Successful VC Meeting
So you're about to go meet with a VC. Here's some free advice from someone who has had a few of those: at a certain point in the meeting, approximately one third of the way into your allotted time, you will need to do something that may feel quite alien to you: You will need to shut up....
The Best Investor Deck Ever
The founder of a company I'm an adviser to recently asked me for tips on creating a PowerPoint presentation for his upcoming investor roadshow. He asked me to send him a copy of the best deck I've ever seen.
Jim Goetz of Sequoia Capital at Stanford from DealHorizon.com
Wow. I've seen some...
Where The Money Is
One of my partner investors in Heardable sent me along a link to a deck the other day from the Jordan Edmiston Group, Inc. (JEGI) that presents an extremely thorough picture of the user interest generation (social media) and user interest mining (online advertising) industries.
Jegi newmedia...
Show Me The Demo
I just had a meeting with a buddy and he got mad at me because he felt that he'd crossed a threshold in terms of what his technology could achieve and, for whatever reason, I wasn't buying it (enough). It didn't help that the entire conversation was verbal.
Thinking back on the...
30 Tips for Writing a Business Plan and Raising Capital
Over the past twenty years, the folks behind this site have helped a number of entrepreneurs and startup companies raise tens of millions of dollars from venture investors. We've worked both sides of the table, as investors, and as struggling entrepreneurs.
We're about to share with...
Entrepreneurs - A Little Accounting Knowledge Can Make a *Big* Difference
A number of years back, I was approached by a company in that needed some help finding a strategic partner. The company, based in Asia, was doing pretty well. They had some partnerships with some top brands, a solid customer list, and revenues were growing nicely. What they needed was a US-based...
How to Write an Executive Summary
A couple of days ago, I posted a blog entitled 5 Easy Steps to a Great Business Plan and some of you were kind enough to email me with some kind words about it. It seems there are many others out there who agree that writing a focused, crisp Executive Summary before you write the rest of your plan...
5 Easy Steps to a Great Business Plan
Writing a great business plan (and I've authored and co-authored dozens of plans) is not that hard. You simply need to understand that investors are busy people, and tell them the five critical things they need to know about your business, as soon as possible in the plan.
Contrary to a lot...
The Five People You Meet in a (Successful) Startup
The Visionary
Essential to any new company's success, but may appear mad/dormant/useless to staff members other than the Wise Man, and especially to the Willing Slaves. Once in a while (or maybe only once), comes up with a "crazy big idea" that becomes the basis for the company's value...
Why Startups Start Up
As exciting as it can be to watch the growth of a single-cell idea into a company, sometimes the cells don't divide fast enough for the organism to survive. Many times, the post-mortem of a startup reveals a basic lack of understanding about why startups start up.
Firstly, let's agree...
10 Things You Need Before Pitching an Investor
This list is designed to work as a process flow chart - if you are missing any of these items, you shouldn't, in my opinion, proceed to the next one - unless you're a proven serial entrepreneur, in which case you can reduce this list to the one thing than transcends everything else:...
The Three Essential Functions of the Board
I just re-read Peter Drucker's "Three Functions of the Board". As always, Drucker provides clear, seasoned counsel:
The enterprise, first, does need a review organ. It needs a group of experienced people, people of integrity and stature, people of proven performance capacity and proven...
Raising Capital Takes Time
I met with a friend the other day who is looking for capital for his new startup. He's a great guy but he's not done any venture capital deals before. He asked me how long I thought it would take him to get the money.
"Assuming they like your plan, three months to a...
Tips On Closing Your VC Deal
I was giving a phone recommendation for an investment banking friend yesterday and while talking about the work we've done together, the interviewer touched on a VC investment that we closed fourteen years ago. "How long did it take you to close that deal, start to finish", she asked me....
Funding 101: What is Due Diligence?
The first time I heard the term "due diligence", as a budding entrepreneur, I had absolutely no idea what it meant. None. Nothing about the phrase informed me as to what it meant, and back in those pre-internet days, definitions involved a trip to the library. So...
David Rose: 10 Ways to Improve Your VC Pitch
David Rose, a serial entrepreneur-turned-VC partner who speaks faster than just about any man on the planet, has a terrific video up at Ted.com in which he outlines in very sensible fashion the ten things you need to know before you pitch to a VC.
Like David Rose, I too have raised tens of...
Two Essential Elements of a Great Pitch
Despite thousands of web pages listing advice on pitching to VCs, many world-be entrepreneurs (and some advice-givers) still fail to include two very important elements in their pitches:
1. Hands-on demo
2. Empirical evidence that the dogs are eating the dog food
Empirical research is simply...
The CEO Rule: Customers, Employees, Owners
Many years ago, after the closing of the first round of financing for my first venture-backed company, the investors and founders went out for dinner in a very nice restaurant to celebrate.
At dinner, one of the investors asked me a question. "Hey John, do you know what CEO stands...
The Importance of Slide One
We were about an hour into a board meeting the other day when the management team laid an extremely impressive year over year growth figure on the table for the first two quarters of 2008. One of the investors present in the meeting reacted by saying:"That's incredible. You guys should have...
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