Silicon valley venture home Anderson: entrepreneurs, beware of the silicon valley of funds!


top VC Andreessen Horowitz partners in silicon Valley, famous silicon Valley venture home mark Anderson, in a series of speech that the warning silicon Valley entrepreneurs to beware of “silicon Valley” of investors (Non – Slicon Valley investors).

Anderson did not directly call the roll. But vehemently criticized as the silicon valley investors with a “day price” seduce entrepreneurs to other interested investors in qing dynasty, and then reduce the offer price and requires entrepreneurship to make all sorts of compromise.

Anderson said: Term sheet (investment terms list) to us as a silicon valley investors, investment in expressed good enough. Which is not only the handle yourself as silicon valley investors began, remove competition then forced to entrepreneurs to compromise.

which Anderson did not say out is not silicon valley funds do, but they scold “immoral, beneath industry”.

large funds outside of silicon valley in recent years, especially among hedge funds are heavily into silicon valley venture capitalists. Silicon valley startups from sand hill road no longer (vc) holy land of San Francisco to financing, but financing from hedge funds. This trend more obvious after several rounds of financing.

look at quarter past large amount of financing, the financing basic has nothing to do with silicon valley venture:

reality: TPG Growth led last week, the financing amount is about $450 million to $500 million. An valued at billions dollars.

Hortonworks: round in March. Global investment and hedge fund giant blackstone group led, raised $100 million. The big data company valuation of about $1 billion.

Cloudera: this company is Hortonworks’s main rival, the same round in March as much as $160 million in financing. A for wealthy global management of about $300 billion wealth fund T.R owe Price led. (before Cloudera also left $740 million from Intel Capital, valued at us $4 billion).

Evertbrite: also in March from New York, the world famous Tiger fund (Tiger Global Management) and t. Rowe Price brought together. The ticketing and event planning company valuation of $1 billion.

Wayfair: still is in March, the online household electricity from t. Rowe Price and other investors to raise $157 million m, valued at more than $2 billion.

Dropbox: this time is February, cloud storage service from blackstone, t. Rowe Price raise to $350 million, and Morgan Stanley investment valuation of $10 billion. Dropbox has become one of the most valuable unlisted companies at present.

it is no wonder that the silicon valley VCS give birth to a strong sense of urgency! Silicon valley VCS billions of dollars in dimension and blackstone, T.R owe Price, TPG Growth compared with the billions of dollars of dimension is not rival.

the problem came also, why are these hedge funds aggressively enter the vc industry?

cloud network hunting before done detailed analysis, see “>

in this paper for hedge funds to break into silicon valley has a more detailed description, as well as to the discussion of its causes. Simply put:

technology start-up companies is becoming more and more don’t like listed as soon as possible!

the company listed in general is based on revenue of $100 million as a benchmark rates of operation, the development strategy of general also borrow the listed machine towards the international market. Even now the science and technology company five six financing, valuations in excess of $1 billion or even billions dollars, very ripe to listing. Many companies in unlisted has achieved considerable revenue scale and realize the growth of the global market. And the development of the listed after and earnings growth space is not so big!

if hedge funds only on the open market, the earnings will be far less unlisted phase, the beginning of the investment. So in order to like venture capital investment in Facebook, Twitter, the popular company get huge gains, hedge funds are investment market step by step, to put forward investment stage, started investing in start-ups.

however, as silicon valley venture Anderson had fun, these “barbarians” from the outside silicon valley would not necessarily respect otherwise tacit understanding between vc – startups in silicon valley and ecological industry norms. Hedge funds’ money “to the simple and quick”, however, they may not have the patience like silicon valley venture with company growth, provide relationships and connections, and actively involved in the operation and the decision-making.

because hedge funds are not stock holders for a long time, so for the company’s responsibility is not strong. Once the listed companies, hedge funds can easily stock sell-off cash. Sometimes when the company in a crisis or users to drop considerably, there are hedge funds trying to sell the stock. There is so said: vc is generally by the wind and rain to see the rainbow with the company, while hedge funds are not necessarily can achieve sharing weal and woe.