ArchivesCategory: Venture Capital

by Manuel Stagars, CFA, CAIA, ERP Abstract This position paper introduces assimilation funds as a new approach to invest capital in startups. Instead of funding startups and hoping for extraordinary returns, an assimilation strategy recommends diversifying early stage capital across the strategic value chain of selected portfolio companies. Such an asset allocation allows investors to Continue Reading

by Manuel Stagars, CFA, CAIA, ERP Silicon Valley is the nickname for Santa Clara Valley, the South Bay portion of the San Francisco Bay Area in Northern California. In the last years, the term has become a synonym for innovation. Research parks often dream out loud of copying Silicon Valley. Occasionally, someone makes the mistake Continue Reading

by Manuel Stagars, CFA, CAIA, ERP What primes startups for success is a question of heated debate. There is obviously no sure-fire recipe, no ten-step plan that makes a fledgling venture the next Google. Here are some thoughts about a simple checklist if a startup gravitates towards success or failure. This may be helpful for Continue Reading

by Manuel Stagars, CFA, CAIA, ERP I updated this post for Enterprising Investor. See it at: http://blogs.cfainstitute.org/investor/2014/10/23/is-venture-capital-a-giffen-good/ Economist Sir Robert Giffen stumbled upon a curious thing: Low quality foods experienced rapidly falling prices and eventually disappeared in Victorian era England when people became more well-off. This violates economic theory: When consumers become wealthier, prices should Continue Reading

by Manuel Stagars, CFA, CAIA, ERP In the past, I have heard pitches of “the next big disruptive idea”, “the future of social networking,” or an idea “ten times better than Facebook” (seriously, I am not making this one up). Entrepreneurs seek to attract capital with these claims, either venture capital or angel funding, to Continue Reading

by Manuel Stagars, CFA, CAIA, ERP Angel investors have the reputation of being the better VCs. Less greedy and complicated when it comes down to due diligence, deal terms, checking up on progress, and altogether more willing to open their wallet. An ideal scenario for first-time entrepreneurs, but the story of most angel capital is Continue Reading

by Manuel Stagars, CFA, CAIA, ERP Black swan events are now a staple of our daily vocabulary. Popularized by Nassim Taleb’s book “The Black Swan” (2007), the term is a metaphor for a totally unexpected event that catches the observer on the wrong foot. After the fact, experts try to rationalize the event, and it Continue Reading

by Manuel Stagars, CFA, CAIA, ERP Failing fast is a paradigm loosely associated with the Lean Startup method. I mention this here with venture capital and angel investment because there are some reservations before wholeheartedly embracing the notion of failing fast. They are concerned with the fact that a failed startup is completely at odds Continue Reading

by Manuel Stagars, CFA, CAIA, ERP When drafting a business plan, we usually project a few years into the future. Conventional wisdom asks for a five-year forecast. More often than not, we come up with a graph that in some form exponentially speeds up towards the upper right, like the old hockey stick or the Continue Reading

by Manuel Stagars, CFA, CAIA, ERP Günter Faltin, author of the book “Kopf Schlägt Kapital” (German, “Ideas Beat Capital”), held the keynote at the Entrepreneurship Summit in Berlin in 2012. Under the heading “The Art of Entrepreneurship,” Faltin put forward a lean business model for entrepreneurs with low overhead, and reliance on available resources instead Continue Reading