YouSaid · the spoken record

John Taylor

lines on the record
25
first
2015-04-23
most recent
2015-04-23
sittings or episodes
1
sources
podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

  1. “We're looking at 3.4. I'm sorry, billion is what I should be saying. So 1.2 billion, 1.2 billion, 1.0 billion. So, you know, all of a sudden, you know, we're well over $3 billion into this one company. And the numbers are mind-boggling. But somebody somewhere was thinking a year ago, two years ago, three years ago, okay, this is how much money it's going to take us to get there, to get to our final destination. And at what point do we hop over from being private to being public? And, you know, is it a better thing for us to be staying private longer? And I think these are all questions that the entrepreneurs need to be asking, certainly the VCs are.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Whether it's the first institutional money or whether they're going first aid grant or whether they're looking to kickstart something or go to an incubator or an accelerator for help early on, I think the question they have to ask is what does the whole journey look like? Am I going to need $10 million to get to where I'm going? Am I going to need $100 million? If you look at Uber, which second quarter of 2014, they got a $1.2 billion round. And we're all sitting there getting the money tree survey ready to go. And we're saying, wait a minute, $1.2 billion is larger than most venture funds. How can this be a venture around? And we looked at it, and it was a venture round. Then as if that wasn't enough, they went back, they did it in the fourth quarter for $1.2 million. And then they came back in first quarter of this year and did another million.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “All of this is negotiated round by round and lots of times there is some kind of participation, but especially if you're talking about a very small early stage fund that was involved early on. Sometimes it's very difficult for them to come back later on with the amount of capital that's needed. So there's a dilution effect. And I'm not sure how you get around that. The short answer is I think it really depends upon the terms. And to the extent that those early investors are coming back into the later round, some may say, okay, look, we're coming back in here. We know we need to put more money in. We may not be able to make our share. But if this whole journey works the way we think, it's going to, we'll still come out in good shape. And, you know, that's something that an entrepreneur looking for money should think about.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “With some of these headline or later rounds, you're seeing mutual funds. You're seeing hedge funds. You're seeing private equity players that are not traditionally engaging with these startups and with these pre-IPO companies. So it's a changing dynamic. And so an entrepreneur looking to see which VC to work with in the later rounds would probably be looking at the Rolodex and the experience and the working relationship between those VCs and some of these third parties that could be brought to bear if, for example, as we've seen recently, instead of going public, a company decides to take a very, very, very large round of financing still as a private company.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Well, I think it goes back to the question of talent, who they can bring in as the company grows. Certainly there's the deal terms themselves, the actual valuations and the dollars involved and so forth. Each of these rounds now's a changing dynamic, largely in Silicon Valley, but we're seeing it elsewhere with some of these headliners. And that is that the VCs themselves are coming to the table with roughly the same amount of money they have the past few years. But we're seeing the total amount invested, the total size of these rounds expanding by 40, 50 percent. The total amount of venture-led rounds, the dollars has gone up dramatically. And so in many of these, you have corporate venture capital groups that have become very active, but even more so.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “In the number of firms, a slight reduction in the amount of capital available, but a significant 30% reduction in the number of firms out there, which says that a lot of the capital is being concentrated by larger firms and in many cases experienced hands. So unfortunately, the help wanted section of VC weekly if there were to be such a thing would not be terribly robust at the moment.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Tough question to answer because many of the top business schools are now requiring that their people have four or five years of relevant or domain work experience. I think it varies hugely. You don't see a lot of folks going in directly from business schools, even the top business schools, going directly into a VC firm to become a VC. If they had prior experience, if they had, say, before joining, before going to business school, they had a middle manager role in an AMGEN or something, something like that would obviously be different than someone just coming out. But the experience and the Rolodex are going to drive that decision. I think also you have to look at where venture is. And over the past four or five years, we've seen a reduction in the”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Gosh, it's tough. I mean, I think the short answer is people. You have many one-and-two-person companies that's gotten funding, but I can't think, maybe with the exception of Enron.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Ensuring that whatever span of control, however many board seats of EC can take, that that company has the best fighting chance of being successful.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Well, yeah, the short answer is there are different models, and typically a round of financing will involve a VC taking a board seat. Now, a lot of the rounds are syndicated, and at some point the value added of the VC is the VC's expertise and Rolodex and experience connections, everything else. So I don't see how you can get completely away from that. But there are firms out there that provide different levels of service, different levels of engagement. Andreessen Horowitz, for example, comes to mind. There are some other firms, including back in Boston and the East Coast, where they actually have a deep, call it a bench or resource pool that's brought to bear on the companies. And that's part of the service that's provided by the venture capitalist as part of the investment.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “typical workload of board level workload is of a venture capitalist and the number comes back six and it was true during and after the babo it's been true since that a venture capitalist with six board seats has a very full workload so a lot of entrepreneurs go out they look for money and you have a VC of you know one or two people investing $100 million fund and they actually think okay they're only looking for a million or two million they have a leg up but in fact a venture capitalist is saying okay I basically have six shots to get this right I can only sit on six boards how do I you know how do I make sure I'm picking the winner so so that's clearly what's going on in the minds of the VCs”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Directly. Other cases, they'd be looking for someone on the ground that could actually get involved in it. So what is the upside? How does this play with my role of DEX and who I can bring into the company? How does this play with other portfolio companies that we have and where we think the internet is going and so forth? All of these are questions that are being asked and perhaps geography a little bit less. You also have VCs frankly having to meter their most important and most scarce asset in that's time. And we've done a study now. We did it back right after the bubble and we've revisited it once or twice with Dow Jones looking to see what it”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Well, yeah, I think it's all on the upside. And, you know, it used to be that feces and companies would match up geographically and you would go down the street to the venture capitalists down the street who is geographically close by. It's much more complex now and it's much, much more sector specific. And not a sector specific, but sub sub-sector specific. There's less dependence these days on geography and more on specifically what the company will do. And so you even see some of the West Coastal coastal firms making investments elsewhere, maybe a university or government lab or something has an intriguing encryption or some kind of e-commerce technology. In some cases that firm, the say the coastal firm would make the investment.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “It's just a much, much smaller number that are able to get out. So with that, you have the changing expectations on the part of the entrepreneurs taking money, especially if they're going in position, is that they're going to be a slam dunk to go public when they get to the right point.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “I think in the case of biotech, it's just been pent up demand. I think it's been, I think the public, these things move in waves and the public was identifying with companies like Facebook and some of the things that maybe consumers use and touch every day. And that's just an easier sell on an IPO. But if you look at, if you go back to the 1990s and look at what percentage of the first fundings in the 90s ended up going public, it was 14%. So basically one in every seven companies that got a Dime of Venture Financing went public. Now, because it takes so long, it's very hard for us to know what the current crop of companies or even the crop of companies eight or ten years ago, what their outcome will be. But my guess is it's going to be 5%, maybe 6%.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “From the initial investment. So is some of that a sign at the times the fact that the IPO markets were tough three, four years ago? Yeah, I think that's a lot of it. And you look at just in the past, gosh, I mean, the past three years, 2013, 2014, 2015. And the interesting thing is that the majority of the IPOs in each of that period were biotech companies, which historically is only about 20% of the money, but many of these companies have been waiting patiently to go public, and they finally had their opportunity, and out they went. And they weren't huge.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Yeah, I mean, the bottom line is that the money typically first goes in, whether it's two people and a dog in a garage or something coming out of a laboratory, you can have in many cases a three to five-year initial investment period as the thing gets going, maybe as it gets to proof of concept or as it gets to first sale, or it gets to the point where it finds its business model and things start to scale up. And especially in recent years, the last four or five years with a dearth of IPOs, you see companies that have been waiting anxiously for the opportunity to go public seven, eight, nine, ten years. And by the time they're able to get out, by the time they're able to go public, that could be 12 years or longer.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Know it's all over the place. You have a lot of the original founders of the venture industry now retiring. In some cases, they're leaving the funds that they founded and they're still passionate about building companies, and that's what gets them out of bed. And they may not be in a position or have an interest to sign up for another 14 years of managing the life cycle of funds. So they'll go out and they'll make their own investments. Typically, that comes a little bit later in the career. When a younger VC or VC right in sort of the middle of the career”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “also the company. So you don't see a lot of places in the economic world where it's sort of a shared objective, shared sense of success, shared vision and direction. But that's absolutely what's happening here. It's all lined up and it's all about buying low and selling high with the investors, the VCs, and the entrepreneurs and the team of the entrepreneurs all benefiting.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “That's the cost of the staff and keeping the doors open and sourcing deals and providing the talent to manage the money. That's not unusual, the 2%. And typically the VC makes its money, his or her money, on sharing a portion of the capital gains with the investors. And typically what they call 20% carry is what you see a lot. Some firms, it's a little bit more, some firms, it's a little bit less. But the idea is that the primary objective of the fund is for the investment made in the company to increase dramatically in value and not only do the investors in the venture fund do well, but so do the venture capitalists themselves. And we should also”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “In many cases, yes, and a lot of them find it particularly attractive right now. And yet, in some cases, a lot of the money's in the hands of very, very large institutions that can no longer put money into a 20 or 30 or 40 million dollar venture fund. They just don't have, they just can't divide it up in that small a parcel. So yes, it's still an attractive place for many of them to invest. And in many cases, it's fairly large chunks of money in large parts of their allocation that they put in. In terms of the actual arrangements, it varies. Each venture fund and its group of investors as it puts a fund together negotiates the terms and the conditions and everything. Many funds charge roughly 2% for management fees.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “When you look at how venture has done over time, and we have a period of about 15 years ago to a period about three, four years ago, where returns were tougher venture, but historically venture capital funds have returned to their investors net. About 25 to 30 percent, it's been a very, very good performing asset class over the long haul.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Sure. Well, typically an institutional investor would be looking at the whole spectrum of places where they can put their money. And they would have certain expectations on the public markets and then varying asset classes, whether it be hedge funds or private equity funds or venture funds or whatever. There is an expectation that in return for the additional risk, in return for the lack of liquidity, that there is a premium. And lots of times you'll hear institutional investors saying that they want at least 300 to 500 basis points better than what they think they can do in the public markets, which is 3 to 5 percent. So if they're thinking they can do 6% return in the public markets, and then they're looking on a whole from venture for at least 9 to 11 percent returns. So the 300 to 500 basis points has been a pretty common benefit.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Capital Fund comes from in many cases family offices. Some cases sovereign wealth funds, colleges, universities, other charitable foundations that are out there. And there's still some pension fund money in there. But with the pensions now seeing aging populations, they're generally not in a position to be doing the 10 to 12 to 14 year lock-up which a venture capital fund typically is. They can't commit to that level timeframe of illiquidity. So we're seeing some new folks, largely the high net worth individuals family offices now very much involved in putting money in.”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “And of course, in our definition, the bright line between a venture capitalist and an angel is an angel or angel group is an individual or group of people investing their own money. In the case of VC, the money is third-party money. They're raising it from someone somewhere typically an institutional investor. And if you go back to the early days of the industry, the 70s, the 80s, the pension funds and the changing of the rules to allow the pension funds to invest really is what got venture capital off the ground, the so-called Prun Man rule, and things that enabled pensions to, in a measured and prudent way, get involved. A lot of those pension funds now, with a shift away from defined benefit plants, really aren't the factors they once were. So virtually all of the money raised by then”

    2015-04-23 · The Twenty Minute VC · 20 VC 030: VC Funds, Angels and IPOs with John Taylor, Head of Research @ NVCA · IDENTIFIED FROM THE TRANSCRIPT · source