Investing In Network-Service-Based Businesses

These posts address issues involved with investing in privately held businesses.

It sometimes gets confusing to work with a company and  label the role you are in.  There are important distinctions and expectations: Investor – This one should be clear and easily determined.  “You pays your money and you takes your chances.”   Especially as an angel investor, you don’t have “control” in the form of board […]

I admit that much of  the inspiration for the Nodal Partners business model comes from Paul Graham’s Y Combinator, and their close cousins.   I’ve also been following TechStars, and Founders’ Institute … which have slightly different models.   And on Monday, I’m visiting with a company in the I/O Ventures startup space in San […]

{ 0 comments }

Ann Miura-Ko (of Floodgate Ventures):  “At the seed stage, it’s the business model that matters, not the business plan.  I won’t read a 50 page business plan, but send me a picture of your business model, and the hypotheses and assumptions animating it, and I’ll take a good look.” Steve Blank has some great work […]

{ 0 comments }

It’s no secret that Silicon Valley is overheated right now.  Despite all the gloom and doom about the US economy and the California unemployment numbers, the pace and magnitude of innovative companies springing up in the San Francisco Bay Area is truly astonishing.  Hard data on the magnitude of investments actually being made are not […]

{ 0 comments }

I think most people are familiar with modern portfolio theory and the related notions of managing the risk/return of your investments through diversification, asset allocation and re-balancing. Well, how does this view of one’s finances relate to angel investments or other early-stage investing? My recommendation to Investor-Members is that they take a cold, hard look […]

{ 0 comments }

As many people have already noted, the traditional venture capital model is broken, and it’s not likely to return to its former structure, scale or productivity. The 10 year returns to the limited partners of the leading VC funds is less than returns from the S&P 500. Investing activity has concentrated into just a few […]

{ 0 comments }

I’ve met two companies in the last 10 days with the following features: They both are “value added resellers” of electronic display hardware. The “value added” component in both cases is mainly proprietary software they have developed. One provides the value from their software as a service (SAAS); the other modifies and re-builds the hardware […]

{ 0 comments }

The “candidate company” targeted by Nodal Partners and the economics of our investment thesis have become more popular this year. Aydin Senkut (former Googler) has just closed a $40M super-angel fund, which follows Ron Conway’s $20M super-angel fund, Chris Sacca’s (former Googler) $8.5M super-angel fund, Dave McClure’s (former PayPal’r) $30M super-angel fund and Mike Maples’ […]

{ 0 comments }