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General Category => General Discussion => Topic started by: winjitsu on September 11, 2020, 11:47:56 AM

Title: Bessemer Venture Partners shares their Investment Memos
Post by: winjitsu on September 11, 2020, 11:47:56 AM
If you're curious about how VCs think about their investments, one of the most famous funds has just shared some of their original investment memos, including Shopify, Pinterest, Yelp, Twitch etc etc

https://www.bvp.com/memos
Title: Re: Bessemer Venture Partners shares their Investment Memos
Post by: Foreign Tuffett on September 11, 2020, 02:46:35 PM
Where are the memos for the investments that didn't work out?
Title: Re: Bessemer Venture Partners shares their Investment Memos
Post by: winjitsu on September 11, 2020, 03:04:00 PM
Where are the memos for the investments that didn't work out?

Same question came to my mind :)
Title: Re: Bessemer Venture Partners shares their Investment Memos
Post by: Jurgis on September 12, 2020, 08:01:28 AM
Ah, the innocent and cheap times of Internet business childhood. The time when you could invest into a company running 160K monthly site visits and ~1M monthly page views at $13M pre-money. https://www.bvp.com/memos/yelp

To be fair Yelp is probably one of the crappiest investments from the list they posted.

In 2011, Pinterest was valued at $40M pre-money with 1M monthly unique visitors and 20M page views. https://www.bvp.com/memos/pinterest
(I love how they call a company with 1M/20M monthly "a very early-stage ... company"  ::) )

I don't get a deal flow like BVP, but my impression is that nowadays you get pre-revenue, pre-product angel pitches at $10-40M cap. Either this is just crappy deals going to not-big-name angels or it's the price inflation. I think it's both.

Where are the memos for the investments that didn't work out?

They are not there. But you can look at the list of comparables/competition mentioned in memos and see how they did. Assuming ~5 competitors per pitch, where most did not survive (though they might have been acqui-hired), the outcome is something like <20% blow out return rate. Likely the rate is closer to <10%. To be fair, Pinterest memo assigns 1% probability to Pinterest going public at 850M valuation, so it's not as if the positive outcomes are vastly oversold.
Title: Re: Bessemer Venture Partners shares their Investment Memos
Post by: Liberty on September 12, 2020, 11:59:10 AM
Where are the memos for the investments that didn't work out?

Same question came to my mind :)

Here, kind of:

https://www.bvp.com/anti-portfolio