The Stock Market, Venture Capital and Angel Investing…All Connected

From my years of investing across asset classes I know that everything is connected. Today we are armed with data sources that did not exist before which helps guys like me invest in a more informed way, if not better.

Yesterday, while staying at The Encore Hotel, another Steve Wynn $WYNN Masterpiece, I holed myself up at the spa and room to watch the last 4 episodes of Season one of ‘Boss’, starring Kelsey Grammer. Download it.

It’s one of the best series of TV I have ever watched. I tweeted that to find out it is cancelled. How can that be?

I woke up this morning to read a post from Fred Wilson entitled ‘What has Changed’.

Fred concludes that the wind is not longer at the back of consumer internet companies. I agree.

It does not mean the end of the world for entrepreneurs or angel investors in the space (I play both).

With Facebook down 50 percent, Apple recovering from a 30 percent drop and conglomerate banks still a messy pile of carnival like ‘Price that Balance Sheet’…it makes sense that the world of investing has changed once again.

As Fred mentions:

So things have changed. As they always do in tech. Those who adapt to the changing dynamics, who see the openings that were not there before and slice through them, will succeed. But the wind that has been at our back for 7-8 years in consumer internet is no longer there. It’s tougher sledding and will likely continue so for some time to come.

The climate has changed, the landcape has changed, the mood has changed, the prices have changed.

If you are an entrepreneur, Fred’s blog post should not be news right now. If you are an entrepreneur starting out today, you better be factoring in all the headwinds.

In fact, I am more concerned about the angel investors and venture capitalists than I am the entrepreneurs in reading all these tea leaves, but as an entreprenuer it is your job to factor in their blindness or lack of expertise.

You are not alone…a great product and brilliant use of the tools of the new social trade are still not enough in November 2012 to guarantee success.


  1. Mike Bellafiore says:

    Going now to download Boss on my iPad for long flight to PHX and back in two weeks Should have sooner.

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  3. fendien says:

    “In fact, I am more concerned about the angel investors and venture capitalists than I am the entrepreneurs in reading all these tea leaves”

    in what sense are you concerned? that investors with no prior enterprise tech experience will throw money after anything ‘enterprise’ to ride the trend? or the opposite that they will continue to pour money into consumer despite the changing dynamics?

    especially here for me in NYC as organizer of the NY Enterprise Technology Meetup it will be interesting to see how things play out. As I just wrote last week for Pando Daily

    “NYC is going to play in the coming enterprise tech boom: Flybridge recently expanded here from Boston. The Partnership for New York City Fund’s FinTech Innovation Lab (a fintech accelerator) had its second successful graduating class this summer. We’ve had some big exits and many new entrants…”

    i’m curious if the big name VCs from out west begin opening up shop here in NYC to identify new opportunities, especially since we have all of the customers here (financial services, media, advertising, fashion, etc).

    • too many fresh ‘angel investors that have only seen a good acquihire market for failures and too many failures is a badge thought posts and acceptance.

      Too many entrepreneurs not doing lean startups and with unrelaistic market cap expectations…..when I pulled out of angel investing in NYC in 2009, deals were $2mil pre….not deals, but quite rational. no where in the neighborhood of rational right now.

      • pointsnfigures says:

        had somebody tell me that my version of pre money valuation was wrong. they were able to get significantly more in Philly. I told them it’s just a price and all markets aren’t necessarily trading the same price. Wished them luck and told them not to screw up, higher valuation investors are not as patient.

      • fendien says:

        yes and no. while there are many similarities in requirements (strong teams, a large market, product/market fit, etc.) distribution and sales are both entirely different ballgames for enterprise. while an idea can change along the way, if you can’t sell it in enterprise, you’re toast.

          • fendien says:

            yes but “selling” consumers is an entirely different ballgame. i’d expand my point to say that pure enterprise guys shouldn’t try to invest in consumer tech. now people with hybrid experience, that’s a different story

      • fendien says:

        yes but isn’t there a difference between envisioning a smaller form factor of something existing (ie mobile) vs having an opinion on enterprise tools. i’d say the consumerization of the enterprise can take you to a certain extent (in terms of leveraging consumer tech experience in an enterprise setting), but when you start getting into ERP or HR systems i feel like being a subject matter expert has certain benefits.

        i agree that the rich app ecosystem and impact of higher bandwidth to devices hasn’t been seen before and will create numerous opportunities, but they’re more logical extensions of the desktop paradigm than comparing consumer to enterprise (a large part of which is due to distribution and sales which i mention below)

      • pointsnfigures says:

        It’s trial and error. We have a couple of guys teaching people how to program mobile quickly in Chicago. As you well know, programming isn’t selling. I love all the trial and error though.

  4. Ellie K says:

    I thought this would be about network analysis. Someone needs to do a nice social network flow chart like they do with political campaign contributions or RDFa and the semantic web. Except the subject here should be venture capital, angel and technology incubator ownership interests. They’re all owned by the same people. Rather, that is what can be inferred from the tech blog press, Wikipedia and the Wall Street Journal. I keep seeing the same participants in series X funding for everything from DogVaca (the airBNB for pets) to PeerJ (the open pay-to-play scholarly publishing platform). You know the refrain: Benchmark, Peter Thiel (Theil?), scions of Facebook, Paul Graham, Smith Klein (Kleiner?) etc.

    I wonder why they disclose so freely? I would never have guessed, as they are all private LLP’s, or LLC’s or S-corp’s or such.

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