The fallacy of Participating Preferred

Once in a while I see a startup that gave its Series A investors participating preferred shares. Not unexpectedly, this is more common with startups that raised money from Israeli VCs. For those who aren’t familiar with how participating preferred shares (PPS) work, it’s a very simple structure: When the company exits (a liquidation event),… Continue reading The fallacy of Participating Preferred

Cyber Security bubble?

The upcoming RSA security conference is going to be larger than ever since one of the hottest trends today is Cyber Security. High visibility hacks on corporate giants like Sony, Target, JPMorgan Chase and Home Depot have resulted in unprecedented amount of media coverage for the space. Needless to say, venture capital funding followed suit and… Continue reading Cyber Security bubble?

Meerkat Madness

The latest obsession in Silicon Valley is an app called Meerkat. For those of you who haven’t been reading tech news or following Twitter feed, Meerkat is an app that makes it really easy to stream live video from your phone to your Twitter followers. Although the app was released just 10 days ago, I… Continue reading Meerkat Madness

Is the Internet of Things the next big thing?

I just returned from the Mobile World Congress in Barcelona. The main thing I noticed this year was that what used to be the largest mobility conference in the world has somewhat transformed into an Internet of Things (IoT) show. It seems like all the vendors are trying to position themselves as IoT players: starting… Continue reading Is the Internet of Things the next big thing?

Winning the away game

It is a well-known fact that sports teams benefit from a home court advantage. In fact, NBA teams consistently win about 60 percent of games that are played in their home arenas. The same phenomena is true for international startups which need to compete in the US, outside their comfort zone. This is always the… Continue reading Winning the away game

How to improve your investment pitch

There are many blog posts out there about how to build your VC pitch deck, what to include and not include in it etc. But much more important than what you say is how you say it. At the end of the day, the one thing that investors care about most is YOU. When we… Continue reading How to improve your investment pitch

It’s all about the churn

As discussed earlier the two most important metrics of a SaaS company are growth rate and retention rate.  Wall Street understands this and considers retention as the second most important factor in valuing a SaaS company (first is growth rate). I would take it even further and argue that for SaaS startups retention should be… Continue reading It’s all about the churn