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Randy Glein

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26
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2017-02-08
most recent
2017-02-08
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1
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  1. “It's really been my pleasure, Harry. Congrats to you on all that you've done to help reveal the personalities in venture capital and expose some of the mystery of what we do. It's very much appreciated by all of us. And thank you.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “So I'll talk about a company Unity Technologies. We invested in earlier this year. I co led the investment with one of my partners, Barry Schuler, Unity Technology, the Remarkable Company. It sits at the nexus of several trends around the next generation of computing and entertainment. It's led by a very”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Oh, wow. Well, so the Cubs is a major league baseball team here based in Chicago. And I know Tim is asking that question because I took him to game seven of the 2003 National League Championship Series where the Cubs lost three straight games to lose an opportunity to go to the World Series. And when we were at that game, I was kind of an infamous series, but you could literally hear a pin drop in Wrigley Field where the Cubs played, the opposing team, the Marlins, celebrated their victory. So it was surreal and it was so sad. And so now here we are in 2016. And wow, pure joy, exhilarating, great relief. You know, I say fly the W and I sang the song. The Cubs are going to win today. It was an amazing thing for me and our family because we moved here to Silicon Valley from Chicago about 10 years ago. And now the curse is over for all Chicago and the dark clouds been lifted. And for those people who take such great pride in their city and their beloved clubs, I say,”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Good question. I read a lot of newsletters, as I'm sure we all do in our business. I'd say, you know, for me, most of my news comes from Twitter. And when I want something a little more edgy, I go to Reddit. In particular, I do have two go-to VC blogs that I've read, friends of mine, Bradfeld and Fred Wilson. I've been reading their blogs religiously for more than a decade.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “That's a good question. I agree with Rory that the size and the state of the market is paramount to gross stage investing, but I also believe that the success in delivering value and achieving growth in that market is all about having a hungry and qualified team of people that have the vision and the kind of the operating shops to execute that against that vision. And so our companies are nothing without their people. So while the market is a prerequisite for creating opportunity, the degree of success as a company, I believe, is largely based on taking it and taking advantage of that market opportunity depends largely on the team of people that are part of that business.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “In isolation or in silos based on their individual specialties. At DFJ Growth, we consciously fuck that trend and that temptation because we want everyone on our team to be knowledgeable enough to express an opinion and to contribute to the decision that we're making and to contribute to the diligence process on our investments. So we really, I guess in that way more generalists where we have to be experts in many things, but to have a team that can all contribute and collaborate towards the end goal, which is to back the world's best and most visionary entrepreneurs and be a great partner for those entrepreneurs.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Yeah, it's everything. It's a hard business for sure. I have colleagues and friends and partners who've done great things in their careers and have been incredibly successful. And I think across the board, folks I know would say, you know, this is a hard business because it's so multidimensional and you have to really have the same passion for these businesses that the entrepreneurs you're backing. You have to have that disciplined approach towards selection criteria of the investments you do make. I would say for us or for me it's really building our own team here at DFJ and DFJ growth to be positioned as a truly effective and valued partner for the world's best and most visionary entrepreneurs, providing an environment for our team that rewards great instincts and judgment, but also teamwork and collaboration. I think the difference there, what I want to highlight is many venture capital firms, they operate differently. And not that it's worse or one's better than the other, but they operate with partners.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Since I was a teenager, I've been a huge fan of JR Tolkien, all of his magnificent works. He's a creative genius, and who couldn't love the tales of Bilbo and Frodo Baggins from the Shire?”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Let's see. That's a great question. Probably the seminal book for my career is a book titled Being Digital. It was written by Nicholas Negroponte in the mid-90s. He was a founder of the MIT Media Lab, a brilliant and forward-looking thinker. I actually had the chance to work briefly with him and his team in the early 90s when we were preparing to start direct TV at Hughes. And I think what he did in that book really foretold the coming era of the internet, the digitization of information, the advent of broadband, the transition of phones to wireless from wired, and trading places with that, the advent of television from wireless to wire distribution. He envisioned voice and touch computing and so much more, all because of this concept of digital bits or binary digits, where he called bits or bits, where digitization was taking the place of physical atoms. So really important book for me. And then the last thing I'll throw in is on a personal level.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “A certain degree of product advantage and differentiation that we believe is sustainable in the market. Continued innovation, and then, of course, very large market where the company has gotten to some level of scale. So they've put that risk behind them. Actually, if they're not valid, we often say that might be a startup in disguise. It's a company that has some traction but isn't yet really in that scaling phase of the business where you're taking more execution risk than market and product risk. And we definitely want to err towards for a gross stage investor the execution and scaling risk as opposed to taking product technology or market risk.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Validation? Are they in the scaling phase or the execution phase of the business? So we look for metrics around that. Typically for us, that means what we have found over the last decade is that typically takes, at least in our mind, kind of the $10 million annualized revenue or bookings run rate or more. So we typically are looking for companies that have low tens of millions, sometimes as much as many tens or even low hundreds of millions of annualized revenue. But for the most part, it's that the sweet spot for us is low tens of millions. And then do they have rapid growth into large market opportunities, either emerging market categories where they're paving the way or transforming existing markets or being bringing something that's disruptive to those markets? And there we look for growth rates that are at least 100% or more with a product or technology that we believe has room to run at those hyper growth rates for some extended period of time. So very fast rates of growth.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Yeah, of course. I think as a growth stage investor, at the stage we focus, which I called, if you segment the growth category into early growth and later growth, you know, we mentioned earlier, we tend to focus on companies that have market and product validation. Really important to us. We spend a lot of our time in our partner meetings talking about two things. We talk about is the company validated? Are they in the hyper-growth phase of their business? Do they have a big enough market opportunity that based on the valuation we're paying today that they can generate the kind of venture-like returns we want in the future within that three to six year time horizon typically? And are they emerging category leaders? And so when you put all that together, do they have breakout potential? We look for really, I would say, several metrics, but two that are really important to us. Obviously, the scale of the business. Have they moved past the early product and technology risk phase of the business so that they have that market and product?”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Investors you described specifically private equity firms have started to come into the technology markets and be buyers of companies that allows companies to stay private longer but allows early stage venture capitalists to take liquidity before say they get to that 8 or 10 or 12 year point in their life cycle. The other thing we've seen now is for certain companies, and I think this is more of an exception, but for certain companies that are special and that have built brands that are recognizable, you have a secondary market that's formed where early investors can get liquidity as these companies continue to grow privately.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Mean though is for early stage venture funds, I think there are still plenty of opportunities to build companies in relatively short timeframes to get them to enough value where you can generate good returns as an early stage investor, but that will happen more often than not through M&A at that stage. If you want to take a company all the way to the public markets, it just takes longer now because of the trends that we talked about earlier. I think it's created this new market opportunity where folks like us can specialize at the growth stage. The other thing that's happened is there are some new opportunities for liquidity in the private markets that didn't exist 10 and 15 and 20 years ago. So historically we've had strategic acquisitions and potentially IPO for companies and of course more companies get acquired I think venture back companies get acquired than they do go public but we also now have trends where some of these larger”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “I would actually say that for us, in particular DFJ growth, so specifically to our growth strategy, we identified this trend more than a decade ago, and it really became the foundation for our growth funds and for our growth strategy. So the fact that the private markets have lengthened in terms of the time it gets to be a public company, I think has opened up a market opportunity that we think is both healthy for companies to get funded privately through that hypergrowth stage, but also has given us an opportunity to create a strategy like DFJ growth. In fact, for our growth funds, we have a typical target holding period of about half the length of an early stage venture investor now. So the typical venture-backed company to get to IPO takes eight to 10 years, sometimes longer now. And our strategy at DFJ growth really targets companies that have more of a three to six year horizon to IPO. Now, what this doesn't”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “And Twilio were both companies that were on nearly $200 million annual revenue run rates before they got public. And that's a very different environment than what we had 10 years ago and more. I'm not sure if that's a cause. I think it's a little bit of a byproduct. I think coming out of the 2000 era bubble bursting, that first generation of internet companies that got funded at somewhat breathtaking valuations for that era, many companies going public before they were really mature enough to be in that position, you know, being a public company creates several different incentives than you have as a private company. We actually think having companies stay private longer is very healthy because you're not on that quarterly treadmill and you're able to really pursue hypergrowth and navigate the challenges of going through that hypergrowth without being in the public market and having to do that kind of quarterly grind of”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Wasn't really well suited to get companies to that level of scale and value because of fund sizes and so forth horizons. So we decided to create a dedicated practice we call DFJ growth to focus on that stage of the development. It's really the scaling phase of the business as opposed to with our early stage funds we focus on the inventioning phase of the business and building that initial product, bringing that technology to market, finding product market fit. Whereas now we focus on product and market validation, the scaling phase of the business, the hypergrowth phase of the business in order to help companies both fund their growth but also to navigate all of those challenges that come at that stage of growth where you're going from tens of millions of revenue as you mentioned or ARR to literally hundreds of millions. In fact, the last two IPOs that we've seen at DFJ over the last couple years box”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “For lower risk associated with less mature companies. So they want that predictability and maturity. And I'll give you a couple of examples. I'll go back to the 70s, 80s, and 90s prior to the last 15 years. And companies in the tech sector, often you'd see them go public raising $40 or $50 million in general, coming out with enterprise values of a few hundred million dollars. And that would be an IPO company still growing fast, but relatively small in terms of scale. Since 2010, we've gone back and looked at all of the tech IPOs since 2010. It's nearly 160 IPOs. And the median market cap at IPO is a billion dollars across all of those IPOs. And that's in contrast to this period of the past. So if today's IPO is a billion dollars and early stage venture capital, in our view,”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Yeah, I think they have for sure. In fact, one of the reasons that we started DFJ growth, and I had the opportunity that I have today to help lead that practice here at DFJ, is because of a trend that we were seeing specifically in the public markets. So if you go back really 11 or 12 years ago when we started conceiving of DFJ growth as a new practice or an extension of our core venture capital business here at DFJ, one of the trends we saw was that companies were starting to stay private longer. And that's definitely a meme that's played out over the last decade or so. Companies stayed private longer now because the public markets want more maturity and predictability than in the past when they embrace companies and allow them to go down the IPO path. So public market investors, I think, today are more willing to give up growth and alpha in terms of the return profile in exchange.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “On investment horizons because in this business, when you're trying to generate returns, both cash on cash return multiple, which we tend to focus on, but also IRR, which a lot of institutional LPs focus on, really does start to hone your senses towards particular timeframes and time horizons at which you're trying to build value and also find exit opportunities or find liquidity for your investors. That's some of the discipline that came with being moving over towards the more institutionalized venture capital side of the business.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “At least at DFJ, I would say it actually opened up some grand possibilities for me because DFJ has a heritage, I would say, of investing in some true forward-looking, but very broadly across technology sectors. So today, we talk about three main sectors we invest in, enterprise technologies, consumer-oriented technologies, as well as disruptors or disruptive enabling technologies. And when you're in a corporate investment environment, you do have some restrictions in terms of your purview, the things that you can really go after. And here it allowed me to think much more broadly about the way technologies are impacting the world and the timeframe where those technologies are being realized in terms of the market opportunity. And so I'd say it both opened up possibilities and allowed me to think broader, but then also really got me focused.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “Help these companies uniquely because of our position in these markets that they were addressing and also how was it relevant to us thinking about the future of those companies at Hughes and Tribune. So I think it added another dimension. But for me, they were great training grounds because I think they taught me how to be a disciplined and diligent investor. I had the good fortune of having great mentors while I was at both of those firms. But what I didn't learn there and what was certainly uniquely different is I didn't really learn how to manage a fund, how to raise capital, and how to invest on behalf of our limited partners as opposed to a large corporate backer. And so, of course, that has come through my work at DFJ and through mentors and tutelage from folks like Tim and John.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “So, in my career, I was actually in two strategic investing groups Hughes New Ventures, which I just described, and then later Tribune Ventures, which is actually where I started to get to know DFJ and the DFJ team very well, Tim Draper, Andreas Stavropolis, John Fisher, and the other partners here. Both of those groups pursued their respective investment strategies by emphasizing the same things that we emphasize as more financially or institutionally motivated venture capitalists, namely a focus on opportunities that transform large markets through unique and disruptive technologies. So while we evaluated the same things, people, products, markets, competition, business models, growth rates, valuation, exit path, and so forth, we also had this other dimension, which we called strategic fit. And so everything we did went through a lens that was focused on how could we as a corporate investor”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “There that helped create the businesses that became direct TV and XM radio. And at the time, those were very disruptive and innovative businesses because they were delivering media, television, and radio over digital systems for the first time and giving consumers a wide variety of choice that they hadn't had in the past. So those experiences were critical for me. They gave me this real passion for building businesses, for developing companies that were founded on new and innovative technologies. And so that for me was, I guess, early in my career kind of a turning point from being a technologist and an engineer to being more of an entrepreneur at that point an entrepreneur because I was able to actually join the team of DirecTV early in its life to be part of a small team that built that business.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Served me very well. There's lots of ways to find yourself in this business, but for me that was essential to give me that perspective and that underpinnings. I started my career as an engineer at the old Hughes Aircraft Company founded by Howard Hughes, and I was in there space and communications group. And early in my career, everybody goes through these journeys. And in my career, I had a fortuitous couple of opportunities that, you know, thank goodness I took advantage of. Case of Hughes, I was early in my career, I was able to move into their new ventures group. And there I got some great mentorship and also exposure to the process of building, creating businesses thinking about markets, assessing technologies, investing in new advancements that helped enable us to create some new businesses. And along the way, I was able to be part of a very small team.”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Sure, happy to do that, Harry. You know, getting a venture capital has definitely not been a straight path for me, for sure. I guess I describe it as more of a winding trail on my career journey. There's a few things that I think are relevant to being inventure capital that I've had in my background. Over the past 25 years or so, I've gained experience as an engineer, an operating executive, an entrepreneur, and of course an investor. And everything I've done in my career has been related to being involved in technology driven businesses, being part of creating innovative high-growth businesses with almost in all cases a focus on transforming markets through technological advancement and innovation. That's been, I guess, the foundation for my career. But as I mentioned, it's been a bit of a winding path to get to where I am today. I started my career as an engineer, and I think the technical and analytical underpinnings have”

    2017-02-08 · The Twenty Minute VC · 20VC: The Radical Changes In Public Market Expectations, The Right Way To Assess Valuation & What It Means To Be A Disciplined & Diligent Investor with Randy Glein, Partner @ DFJ Growth · IDENTIFIED FROM THE TRANSCRIPT · source