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« Leaving Microsoft | Main | Conflagartion of Innocence »
Sunday
Jul062008

Starting a Small Seed Fund?

A friend mentioned that he was considering started a small seed-fund for tech startups.  That got me thinking: the prospect sounds pretty sexy, but does it make economic sense?

1.  What’s the average fund size at KPCB or Sequoia?  What’s the minimum they require from each investor?  How many companies do they invest in for a given fund?  What’s the average investment size?  For a given company, how many rounds do they participate in?  What are the returns on the fund as a whole?  What’s the distribution between home runs, singles, and strike outs?  These two firms are considered top tier firms, how do their returns compare to second, third tier, etc firms?


2.  Kevin Hartz, Keith Rabois, & Jawed Karim do something called Youniversity Ventures.  These guys are experienced, brilliant, connected, and quite aggressive.  I read somewhere they invest in series A/angel rounds and “mark up” in future rounds.  I’ve no idea what that means but it sounded like they invest at one valuation, helping the entreprenuer/company make progress, raise another round, and cash part of their money out…Is that what they do?  Is that a viable business model?


3.  Paul Graham and co do Y Combinator.   I’ve heard people say that Y Combinator “breaks even”.  Is that true or do they make a lot of money?  Why don’t they make even more money?


4.  What size would a seed-fund need to be?  $5MM?  $10MM?  How hard would it be to raise this money?  What sort of return could such a fund deliver?  And in what time frame?

Hopefully, I’ll be digging in and finding answers to these questions soon!

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  • Response
    Response: order best essays
    This is the good plan to invest in the seeds. This way we can help best not ourselves, but for the other too. The excess amount of the plants can save us from the many dangerous diseases. And they are also the good way to having the fresh fruits and vegetables ...

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