The Real Valuation of a Venture Bubble

Posted by Pierre de la Fortune on May 6, 2015 @ 12:01 a.m.

Written by Seth Levine

While there’s been plenty of discussion and debate about whether we’re in some kind of valuation/venture bubble right now for early stage tech, there is one bubble that I’m pretty sure of. I’m seeing more great business ideas right now than I can remember seeing at any time in my 10 year venture career.

We typically see around 1,500 business plans a year at Foundry (we actually see more than that, but this is the approximate number that are relevant to our investment focus). On average we’ll take a meeting with somewhere around 10-15% of these and hear a bit more than what was in the introductory email or initial business plan. And we typically invest in 8 (our Foundry blog does a pretty good job of tracing our investment history and pace if you flip through our old posts). These numbers work for us and for our strategy and part of our operating philosopy is not to deviate significantly from our investment pace (depending on the mix of seed investments this number could go up or down in any given year but overall we’re comfortable at roughly the 6-10 new investments per year pace).

But something isn’t right with the early stage world right now. I’ve said a few times in the last 24 months what a great time it is to start a company and clearly more and more people are believing that because we’re seeing a significant uptick in the number of investment opportunities we see here at Foundry (I’m sure we’ll be well above 2,000 for the year). More importantly, we’re seeing many many really good, interesting ideas. I’m blown away by it. And it’s frustrating, because I can only spend time on so many things and we’re still only going to make 6-10 new investments in any given year. But never before have I had to say “no” to so many businesses that 1) I thought were super interesting; 2) were clearly going to get funded by someone; and 3) in another time/market I’d love to spend more time with.

To be clear, I don’t see anything to suggest that traditional venture math won’t continue to hold true (a good performing venture fund will still see about 1/3 of their investments fail, another 1/3 do only “ok” and 1/3 do better than that – with maybe 5-10% becoming real stars). And, of course, I recognize that part of our job on this side of the table (at least in venture funds with our investment strategy and not one of making 20 or 30 investments a year to spread around) is to make the hard choice of which of a number of great companies really has the chance to be outstanding.

But wow – is it a fun time to be in venture! And perhaps even more so, a fun time to be an entrepreneur…

For more info please visit:

Is this article helpful?


Startup Dot Com Seth Levine

Damn!!! Seth Levine can really talk ;-) Shut up dude, ha ha ha -_Ron

Funny and you should be the one to talk...

Exactly enough said

wow gold

Moving into Which means that California you would think these kinds of might possibly be way too design yet wow gold are good for your much cooler winter season and absolutely love all of the jewelry thing. wow gold t

wow gold

wow gold livraison rapide ensuite soign¨¦e tres contente de mien achat a renouveller

Write something about this article:

Money Blitz Word of the Day

Charity - By derivation "love of one’s fellow men" (same as the Greek "philanthropy"), this term was originally applied to voluntary giving to those in need alongside the application of "poor law" by governments, local authorities and the church. By extension, "charity" has come to refer generally to "charitable trusts", i.e. any organisation established legally as a non-profit entity to provide some form of public benefit. Within Europe this covers the legal status of most cultural organisations in the independent sector, although governments often tend (e.g. in Lottery contexts) to retain a more traditional view of "charity" as being mainly about social welfare and community health.

Money Blitz Quote of the Day

If you can't feed a hundred people, then feed just one. -Mother Teresa

WatchList Quote

Major Index WatchList

EUR & USD Interactive Chart