Fred Wilson Warns Heavily Funded Startups Avoiding Public Markets “Pride Comes Before the Fall”

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Fred Wilson of Union Square Ventures reacted to the idea that founders prefer to take money in the private market because they don’t want to answer to public investors who don’t understand them in “Maybe They Do Understand Your Business” While we may disagree on public investors’ level of sophistication, I found this part of his post most interesting:

“It is true that Wall Street will not be tolerant of missed expectations. It is true that Wall Street may focus too much on short term numbers. It is true that you may not be able to control what numbers Wall Street decides to obsess over when it comes to valuing your company.

But I think tech sector is making a huge mistake in thinking that they know their companies and how to value them better than Wall Street. That kind of thinking is arrogance and pride comes before the fall.”

For the 238 startups we are tracking who have raised $200M or more in their lifetime, and especially the 143 who have raised a new round of at least $100M since the beginning of calendar 2015, there is a lot to think about here, and a warning not to let valuations received from private market investors create unrealistic expectations for what a public market valuation might look like.

Which Investors Are Paying High Private Market Prices?

Let’s dig into these 143 rounds to understand which investors are most active in these ‘private IPOs’ or massive late-stage private rounds. I have a hunch it won’t be early/growth stage VCs like Fred, and upon a quick search I can confirm Union Square Ventures hasn’t announced participation in a round of $100M or more in 2015.


To download the full list of $100M+ rounds in 2015, sign up for a free trial of Mattermark professional — it has never been easier to get data that you and your analyst team can use to understand the private market, and this list has a long tail of hedge funds, mutual funds and other investors you might not realize are investing in pre-IPO startups.

Which Startups Have Raised the Most Private Funding?


To download the full list of companies ranked by lifetime funding, sign up for a free trial of Mattermark professional. We also provide an API, Salesforce integration, Excel file exports and automated alerts to help you keep track of the private market.

Mattermark Daily – Tuesday, June 30th, 2015

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Research Investors In Mattermark

We’ve doubled the questions you can answer with Mattermark. Now, Mattermark includes data on the entire investor ecosystem, so you can quantify and structure investor data as you need. Learn about the number of deals, portfolio size, 3 year funds sold, most recent fund date, and more.

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From the Investors

Tomasz Tunguz of Redpoint Ventures compares 2014 and 2015 M&A data and finds that current 2015 M&A trends are on the decline in “Trends in Startup Acquisition Market in 2015

Fred Wilson of Union Square Ventures sees Seed and Series A pre-money valuations as ‘more or less healthy’, whereas ‘Series C and beyond has gone crazy’ in “Two Charts

Semyon Dukach of Techstars takes a sarcastic look at pro-rata rights and declares that early stage investors have no business in late stage rounds in “The Pro-Rata Bubble

Mar Hershenson of Pejman Mar Ventures, Isaac Madan and Shaurya Saluja of Stanford University research Stanford’s entrepreneurial output and how it compares to Harvard’s in “What Do Stanford GSB Founders Look Like?

Jean Bourcereau of Ventech shares his opinion as a version of Maslow’s hierarchy of what is needed to build a sustainable society in “Uber vs Cabbies, Maslow’s Style OR Why It’s Just Fair That Uber’s French Management is Under Legal Pressure

Elizabeth Kraus of MergeLane outlines the ‘Angel Investor Deal Gold Standard’, a list of criteria that most investors strive to meet in “What Type of Companies Do Angel Investors Fund?

Mahesh Vellanki of Redpoint Ventures walks through important calculations, metrics and unit economics for consumer internet businesses in “Stop! You’re Doing Lifetime Value Wrong!

David Cowan of Bessemer Venture Partners reflects on the Turing Test and its relation to his investment in Distil Networks in “The Imitation Game (or, Why I Invested in Distil Networks)

From the Operators

Andrew Wilkinson of MetaLab draws parallels between today’s funding ecosystem and the dotcom years and provides ‘The Defensive Playbook’ to weather any potential storms in “We Need to Talk About Startups

Camille Ricketts of the First Round Review features Matthew Bellows of Yesware who offers strategies to help break open even the most secretive company cultures in “The Case for Startups to Make Radical Transparency the Top Priority

David Heienemeier Hansson of Basecamp rails against hunger being cited as the ‘source of motivation for starting new businesses’ in “Empty Stomach, Poor Decisions

Sean Blanda of 99u and Tristan Walker of Bevel explore what it takes to build a world-class company in “Bevel’s Tristan Walker: The Best Ideas Are Brewed Out of Authenticity

Serial Entrepreneur Max Levchin shares his boyhood discovery of the magic of computers in “When I Learned That Computers Have Soul

Buffer launches an overview of everything they’ve made transparent – salaries, equity, values, revenue, open source code, emails, and more in “Buffer + Transparency

From Mattermark

Mattermark Webinar: Interested in our Latest feature release- All Investors? Join our Head of Product, Bryan Tsao, for an overview of the development of our biggest release of the year on July 8th at 11am PST.

Mattermark Daily – Monday, June 29th, 2015

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From the Investors

Josh Kopelman of First Round Capital reveals a small shift in First Round’s investing strategy based on a lesson learned in the dotcom crash, his thoughts on the ‘bubble’, and more in “First Round Q1 LP Letter

Jay Acunzo of NextView Ventures shares – at length – how and why startups should do content marketing with ‘the right mentality and the right goals’ in “Should Startups Blog? An Essay (with data) to Decide Once and For All

Hunter Walk of Homebrew explains the three buckets he uses when evaluating a company looking to raise a second seed round in “The Three Types of ‘Second Seed’ Rounds: Too Cold, Too Hot and Just Right

Leo Polovets of Susa Ventures explores three common claims in VC to better understand if and ‘how VC investment returns are affected by bubbles’ in “Bubbles and Unicorns

Sam Altman of Y Combinator announces that he’ll be joining the board of two energy startups as the chairman in “Energy

Fred Wilson of Union Square Ventures outlines the factors that ‘go into determining whether your team skews to loyalists vs mercenary’ and what to do about it in “Loyalists vs Mercenaries

Zal Bilimoria of Andreessen Horowitz highlights examples of subscription-based companies he calls ‘Mass SaaS’ and why he thinks this model will grow in popularity in “Mass SaaS: Thinking about SaaS on the Consumer Side

From the Operators

Sunil Rajaraman of Scripted offers a basic cost model to help founders understand how much they need to raise to get to the next milestone in “A Fundraising Template Every Entrepreneur Can Use

Armando Biondi of AdEspresso writes ‘an open letter to entrepreneurs’ in hopes of shedding light on ‘founder depression’ and how to get through it in “This is Scary for Me to Share, But Maybe, Hopefully, It Will Help You

Ellen Huet of Forbes tells the story of how Kitchit’s team dealt with the pain of losing a cofounder and how they kept the company going “What Happens to a Startup When a Cofounder Dies

Serial Entrepreneur Sean Parker believes ‘today’s young internet baros should use the talents that made them rich to transform the world of giving’ in “Sean Parker: Philanthropy for Hackers

Mathilde Collin of Front details her observations from fundraising in both Europe and the U.S. in “The Difference Between Raising Early-Stage Capital in the US vs. Europe

Serial Entrepreneur Steve Blank lays out the management strategies he uses to help large U.S. companies innovate faster in “Lean Innovation Management – Making Corporate Innovation Work

From Mattermark

Mattermark Webinar: Interested in our Latest feature release- All Investors? Join our Head of Product, Bryan Tsao, for an overview of the development of our biggest release of the year on July 8th at 11am PST.