Category Archives: Venture Capital

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For Y Combinator Startups, the Average Series A Round in 2014 is 5X Larger Than in 2008

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Over the past two years the discussion of the “Series A” crunch has reached fever pitch, with an emphasis on the mounting investor expectations around raising this round. We have also seen some truly massive series A rounds so far this year. So I was curious, how has a Series A for Y Combinator companies – those who are considered by Valley insiders to fetch some of the highest premiums – faring over time? I collected information on the 92 YC companies to have raised a Series A in their life, and here is what I found.

Series A trends - 2014 Y Combinator.001

To put this in perspective, I also pull the industry averages for all Series A and Series B rounds during the same period of time:

Series A trends - 2014 Y Combinator vs industry.001

Change In Round Size, Regardless of Time Elapsed

For another perspective, I also thought it would be interesting to remove the time aspect and simply look at these Series A rounds as a progression of deals, regardless of when they took place. This graph looks at the 10 deal running average of Series A round size. You could think of this as potentially answering the question “did YC get better at helping founders raise larger rounds at higher valuations as they did more deals, regardless of time elapsed?”

Series A trends - 2014 Y Combinator2.001

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Mattermark Daily – Wednesday, July 23rd

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From the Investors

Mark Suster of Upfront Ventures studies the early angel activity that boosted late-stage valuations and forced venture capital to evolve in “The Changing Structure of the VC Industry

Bill Bing of The Startup Factory puzzles over the broken system and unchanging incentives of LPs in “The More Things Change… (The Mostly Inert State of the Limited Partner)

Tomasz Tunguz of Redpoint Ventures predicts a strong market for early stage software and consumer investments over the next 12-18 months in “The Coming Wave of Venture Capital and What it Means for Your Startup

Fred Wilson of Union Square Ventures says that his “biggest piece of advice” to entrepreneurs regarding their board is to actively recruit “Independent Directors

Brad Feld of Foundry Group hosts the “Foundry Women’s Exec Summit

Startup Guru Steve Blank throws open the doors on the National Science Foundation’s investment in I-Corps for Learning in “Getting Lean in Education – By Getting Out of the Classroom

Michael Witheiler of Flybridge Capital Partners breaks out hardware crowdfunding figures by industry, sets the floor for success at $211,290, in “Learning from the Crowd: The Hardware Ecosystem

Bilal Zuberi of Lux Capital differentiates between a sales pitch and an investing pitch by removing the rose-colored lenses in “What is a ‘Pitch?’

Albert Wenger of Union Square Ventures muses on our stage in the transition from an industrial society to an automated one in “Is it 1880 or 1914?

Tim Devane of Red Sea Ventures realizes that he doesn’t lose a step by disconnecting for the weekend in “Closing the Computer

From the Operators

Nate Kontny of Draft points to Benjamin Franklin and Ryan Hoover to demonstrate the importance of wiring in “Now That I’ve Created Something, How Do I Spread It?

Gabriel Weinberg of DuckDuckGo responds to Ben Horowitz’s post yesterday by pointing to a graveyard of failed startups who never learned that “traction trumps everything” — “An Earlier Budget Mistake that will Ruin Your Company

Adam Ludwin of Chain builds on the analogy, “If Bitcoin is like Email, then Ethereum is like the web,” in “Explaining Ethereum

Matt McCabe of Leadify explains how indexing content across sites returns the greatest social media impact in “A Different Approach to Social Media Marketing

Foursquare previews its reinvention in “A Brand New Foursquare, with a Brand New Logo and Look, is Almost Ready for You

Oliver Reichenstein of Information Architects reflects on the design process—the painful parts of listening, thinking, imagining—in “Putting Thought Into Things

Mattermark Daily – Tuesday, July 22nd

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From the Investors

Ben Horowitz of Andreessen Horowitz tears up the floorboards of the budgeting process and finds termites underneath in “How to Ruin Your Company with One Bad Process” — “Local incentives, if not properly managed, will sharply motivate human behavior and defeat the global goals.”

Boris Wertz of Version One Ventures isn’t fooled by the abundance of “‘easy’ early-stage money floating around right now” in “What Every Entrepreneur Should Know About Financing Right Now

Mark Suster of Upfront Ventures defines “shelfware” and tells companies how to avoid churn in a downturn in “Here’s Why a Booming Tech Market May Fool You into Thinking You’re Successful

Bijan Sabet of Spark Capital is drawn to technologies that enable intention, creativity, and choice in “Intention and the Choices We Make Every Day

Benedict Evans of Andreessen Horowitz brings into focus the magnitude of the internet’s growth as a result of smartphones in “Mobile Leverage

Hunter Walk of Homebrew Ventures recommends top-down forecasting that focuses on milestones for early-stage startups in “Sunny Whether: Two Types of Forecasting Models for Running Your Startup

Guy Turner of Hyde Park Venture Partners favors the bottom-up approach to forecasting in “Great Startup CEOs See the Future… And How to Do It

Mike Collett of Promus Ventures wants founders to listen up and avoid their peers’ mistakes in “There’s a Hole in That Road: 10 Common Pitfalls for Startups

Roy Bahat of Bloomberg Beta teaches fundraising founders how to craft the perfect forward intro email in “Introductions and the ‘Forward Intro Email’

David Weekly of Drove.VC pens a breakup letter to a product he believes has lost its focus — “Dear Foursquare”

From the Operators

Tom Hughes of Zafgen dates some bankers and shows some skin in “Lessons From an IPO

Jerome Ng of VenueSpot describes the hustle, the uncertainty, and the struggle of the first 500 days in “500 Days in.

Greg Brockman of Stripe lays out three advantages to a global market that embraces cryptocurrencies in “Bitcoin: the Stripe Perspective