A version of this article previously appeared in Forbes.
During a Invoca Board meeting, an interesting idea was raised by Brett Queener, a former Salesforce senior executive. He noted that early in Salesforce’s tenure, the company changed its fiscal year to end on January 31st, rather than the traditional calendar year end.
This approach has been commonly used by retailers since the start of the last century. However, it remains fairly rare within the tech world. Intrigued, I conferred with Brett after the meeting and identified a number of advantages (some obvious, some less so) that a tech company can derive from a non-traditional fiscal year, especially one which does NOT end on the last month of a calendar quarter (i.e., March, June, September or December). <Note: I am an investor in Invoca via Rincon Venture Partners>
Startup blogger and venture capitalist extraordinaire Fred Wilson recently published a great article on Venture Debt, which I strongly suggest you review HERE. Go ahead, I will wait…
…welcome back. As Fred points out, many entrepreneurs hear the word “debt” and promptly run the other direction. In the past, venture debt was often viewed as a funding vehicle of last resort. When the current investors were tapped out and a bigger fool could not be brought into a venture, all eyes turn towards debt. However, when deployed judiciously, venture debt can mitigate investors’ and founders’ dilution.
At Rincon Venture Partners, we are in the midst of negotiating a term sheet with a cash-positive startup that is growing aggressively. The nature of the company’s business model requires it to fund certain costs before it is paid by its customers. Thus, even though the company is cash flow positive, its growth is constrained by the amount of payables it can fund. Enter venture debt.
Below is a talk on New Venture Investing from the University of California Santa Barbara’s Technology Management Program, by Jim Andelman.
In this video Jim Andelman explores venture capital investing and the emergence of capital efficient businesses.
Jim Andelman, co-founder and General Partner of Rincon Venture Partner
Jim is a co-founder and General Partner of Rincon Venture Partners. In this capacity, he is responsible for driving the fund’s investment activities, as well as the firm’s operations. Jim has more than fifteen years of experience in venture capital investing, technology investment banking and advisory services and strategic business consulting.
Previously, Jim led software investing at Broadview Capital Partners, a $250 million expansion-stage venture capital firm. Jim was responsible for developing investment themes, sourcing investment opportunities, performing company assessments, negotiating and executing transactions, and advising portfolio companies. Jim led the assessment of over 300 investment opportunities, participated in the deployment of $78 million across five portfolio companies, four of which exited via acquisition despite a challenging macroeconomic environment.
It was the biggest day in the young Beatles’ fledgling career: an audition with Decca Records. However, rather than showcase such high-energy Beatle originals as “I Saw Her Standing There”, or “The One After 909”, Brian Epstein, the Beatles’ Manager, focused the group’s efforts on sappy show tunes and languid pop standards.
The result was a listless audition and the ultimate rejection of the world’s most successful recording act by the otherwise astute Decca Records.
When you complete this reading, you will be able to answer the following question:
a. Sports writers are to athletes
b. Theatre critics are to actors
c. Band managers are to musicians
d. All of the above
VC are to Entrepreneurs as ________ are to _________:
Along with Dr. Seuss’ “Green Eggs and Ham” and Marcia Brown’s “Stone Soup”, the seemingly innocuous board game “Monopoly” has played a pivotal role in the United States’ rise as an economic superpower.