What they say:
“Hustling to develop a disruptive AI platform that’s crushing it among unicorns in the urban-transportation space.”
What it means:
“Living in an Uber, with an iPhone, next to a Starbucks outside San Jose.”
"Silicon Valley" was founded upon the hard-earned legacies of people like Andy Grove, Gordon Moore, and Bob Noyce; but has apparently degenerated into the hoodie-sporting, scooter-riding, bio-hacking, unicorn-puffing, capital-spraying, meal-skipping, juice-squeezing, botox-injecting, tech-bro-centric dipshit Olympics.
It seems that party's going to be over soon.
BEND, OR – October 18, 2019 – "Economic Development for Central Oregon (EDCO) hosted the 16th Annual Bend Venture Conference (BVC) to a sold-out crowd at the Tower Theatre in Downtown Bend. This August, nearly 100 companies from across the U.S. and Canada applied to the conference in hopes of making it to the Tower Theatre stage. Over the past two days, 14 finalists presented their ideas to nearly 600 attendees."
Cascadian Group's Principal, Jason M. Moyer, has managed BVC's growth-stage funds since 2014.
Read more here.
Market cap and/or up-round "valuations" really don't mean shit unless somebody is buying an entire company. Otherwise, that "unicorn" status might simply mean that some bit player paid way too much for their latest tiny % equity holding. (Unless all shareholders can liquidate at a given price simultaneously, it's basically fiction, as increased supply would eat through the bid stack, devaluing subsequent shares transacted.) Even setting aside discounts and premiums, selling 10% for $10M is not the same as selling 100% for $100M. The guy with $10M might be looking for (or might be) the greater fool.
Finding good deals is hard these days. It's much easier to stick with an old-school, dumpster-diving approach. Here’s the formula:
Pick a random company. Find recent EBITDA. Adjust at will. Choose an anemic multiple, usually 5X. Calculate EV. Subtract debt.
Then, have a junior analyst type said rudimentary math into a massive proprietary spreadsheet template gratuitously slathered in graduate-school vocabulary, and bless with a Managing Director's holy water. It is now imperative that one refers back to this XLS analysis obsessively, no matter the context – for this is the winning formula for negotiation, honed through decades of past practice...
Ignore excess working capital, assets in all forms, and everything else not labeled “debt” on the balance sheet; especially if liquidation value far exceeds the proposed equity offer.
Ignore favorable backlog and pending contracts, regardless of DD validation. Same with evident growth rates, industry trends, and mitigating expense adjustments characteristic among closely held companies.
Ignore shifting risk versus reward correlations in financial markets. (Risk might get you fired, but management fees have always offered sufficient reward.)
Ignore the industry's $1T+ in idle capital, and the fact that nobody is doing worthwhile deals at low multiples anymore. Valuations are opinions, while transactions are facts. Accordingly, one must also ignore the glaring absence of any recent transactions necessary to prove one’s low-ball valuation assertions “right”.
Now, structure the aforementioned 5X beyond recognition, further leveraged in the firm's favor, and tell the seller how hard the firm has tried to make this deal work.
Deposit generous paycheck.
(Disclaimer: There are certainly exceptions, but firms with a rational perspective on value can be rather hard to find.)
BEND, OR – October 19, 2018 – Economic Development for Central Oregon (EDCO) hosted the 15th Annual Bend Venture Conference (BVC) to a sold-out crowd at the Tower Theatre in Downtown Bend. Over the past two days, 14 companies presented their ideas to 600 attendees in hopes of gaining investments from prominent funds. Of those 14 finalists, half of them walked away with funding totaling $1,807,500 in both investments and cash prizes. Side investment deals are still being finalized...
Cascadian Group's Principal, Jason M. Moyer, manages BVC's growth-stage investment process.
Read more here: bendvc.edcoinfo.com
Odds of founding a unicorn:
Lifetime odds of dying from local meteorite, asteroid, or comet impact:
You are 24.18 X more likely to be killed by an asteroid.
Cascadian Group has sponsored and volunteered with the Bend Venture Conference since 2007. BVC's 2016 growth-stage fund, managed by Cascadian principal Jason M. Moyer, recently cashed out of RFPIO, adding to BVC's collective returns. Read more here:
Bend Bulletin Article
Cascadian Group has been supporting the Bend Venture Conference since 2007, as it has grown to become one of the more notable events in the country. BVC 2018 is open for companies to apply through August 8th.
A related article includes current perspectives on venture investment, as quoted in the Bulletin.
General information for October's conference appears here.
We think about business a lot. Sometimes, late at night, we even write a few things down...