Bessemer: VC benefits fall and gain

As the Web 3.0 revolution deepens, venture capital continues to move to the next generation. a16z stands for the notion of a functional VC platform, and individual VCs are starting to become the next wave of globalization.

Platform and Personalization can be defined as VC 2.0 and 3.0 respectively. What is VC 1.0? The first wave of venture capital, which started on Dune Road in the 1960s, was largely led by white males through investment banking and advice, but often died away with the wind when the dot-com bubble erupted in 2000 or the 2008 financial crisis.

So we think Bessemer Venture Partners is a good example. Although he is a representative of VC 1.0, he has shown significant impact in the age of cloud and SaaS, and events such as Twilio and Shopify have been significant in the industry.

Democrats in 1974, BVP was developed before Sequoia and KPCB and still retains much of the VC 1.0 organization. As journalist Eric Newcomer explains:

In general, Silicon Valley VCs pay more for the design versus environment comparison, while BVPs have developed more detailed information on investing in a successful business. Marketing experts, a16z pride themselves on creating value and BVP strives to make everyone great ...

Its performance is still good enough to outperform its laggards. BVP funds 7 and 8 both more than quadrupled, with both revenues increasing by $ 3.3 billion in early 2021, 12 IPOs and 7 IPOs in the year, including Toast and Hashkov. Stars:

How does BVP do this? The Antiportfolio list, we mean, gives some answers--BVPs are humble, fun, and new.

The Anti-Portfolio published on the official BVP website lists companies in which BVP has the opportunity to invest but does not disclose them, including Apple, Google and Tesla.While investing in Memo has become a challenge for some academics, there are still a few large companies around the world that can brag about companies they have lost. , and the BVP were passed before these standards.

This list was published in 2009 by Cowan, partner of BVP. It goes through eBay, Google and PayPal by itself.

One of BVP's oldest co-founders, Felda Hardymon, went through all the rave reviews and advocated Cowan's “dangerous strategy”. Hardymon joined BVP in 1981. Without his adult restraint, he helped BVP gain fairness and integrity in a competitive business environment, his writings are partially revealing.

This information contains the following:

1. The BVP pays tribute to the lost company.

2. BVP Anti Wallet(Help readers identify them in the image below.)

3. Home run sur Twilio et Shopify

01.

Tribute to the disappeared company

Bessemer Venture Partners will be the oldest conglomerate in the United States. Our history dates back to the Carnegie Iron Empire (Note 1).A long and legendary history has given us an unprecedented opportunity to destroy everything.

Throughout history we have invested in French Fries Company, a wig company and Lahaina, Ka'anapali & Pacific Railway Company (note 2). But we left these companies with investments, and they were all successful.

There are many reasons for abandoning these investments. At the same time, we provide opportunities for young venture capital organizations. They are out of luck and we think a million dollars can help them. Another participant completed Schedule D (note 3) that year and had to file separate investments in a business and was therefore fired.

However, we want to tax the companies in this van business.You can look at it from another angle. Investing in these companies will not make you work.

Note 1: Henry Phipps, founder of Carnegie Steel, founded Bessemer Securities, a family business in 1911. The company announced its venture capital to Bessemer Venture Partners in 1974.

Note 2: The railroad connects the crops and manufacturing facilities in Hawaii.

Note 3: Schedule D is part of your US tax return that shows investments and losses.

02 ib.

protection wallet

Airbnb (now worth over $ 100 billion)

Jeremy Levine (Note 5) met Brian Chesky in January 2010 when Airbnb's monthly income reached $ 100,000. Brian's claim of $ 40 million is "crazy," but Jeremy agreed and plans to get back to him in May.

Jeremy couldn't have predicted that US $ 100,000 would turn into $ 200,000 in February and $ 300,000 in March. In April, Airbnb received a 1.5x "crazy" rating. In December 2020, Airbnb went public with a value of $ 47 billion.

Note 5: Jeremy Levine is also Bessemer's partner. He joined the company in 2001 and early on invested several million dollars in public companies such as LinkedIn, MindBody, Pinterest, Shopify and Yelp.

Note 6: Brian Chesky is the Founder and CEO of Airbnb.

Apple (at retail now close to $ 2.9 trillion)

During Apple's pre-IPO, Bessemer had the opportunity to buy $ 60 million in stock. Neil Brownstein (Note 7) considers this award to be "very hot".

Note 7: Neil Brownstein was the founding partner of Bessemer from 1973 to 1995, then acquired Footprint Ventures in 2005.

Atlassian (current market value over $ 98 billion)

In 2006, Byron Deeter (Note 8) flew to Atlassian, a manufacturer for Australia (in many parts of the world). The minutes include "I started with a debit card using my money" and "Great business, but Scott Mike (note 9) doesn't want the business to go public."

After several years of meetings, Bessemer received his first investment in 2010, but the price of $ 400 million was seen as a bit "expensive." In 2015, Atlassian became the largest tech IPO in Australian history and the products we missed were now worth over US $ 1 billion.

Note 8: Byron Deeter is now a partner of Bessemer, specializing in cloud and online investments, and founder of the Bessemer Forbes Cloud 100 and the BVP Nasdaq Emerging Cloud Index.

Note 9: Scott Mike is the founder and CEO of Atlassian. The main goal created by Atlassian is to achieve a median starting salary of Australian graduates without having to work for others.

Coinbase (currently retailing at over $ 57 billion)

One evening in the summer of 2012, an email appeared in Ethan Kurzwil's inbox with the message “Demo Day, Follow Up, Coinbase” (Note 10). After a similar speech, Coinbase Founder and CEO Brian Armstrong jumped right into the topic: "What questions can I answer over the next two weeks to encourage investment in Coinbase?"

In this environment, we could invest $ 500,000 worth $ 10 million in an existing simple futures contract, an investment hardly anyone has ever heard of. Ethan's correct answers will keep the brain and Coinbase in this class for life. "I can't answer questions that I can invest."

Almost nine years later, Coinbase has grown into an $ 85.8 billion direct-listed cryptocurrency exchange. It's only 8,580 times the amount that Brain is passionate about!

Note 10: Ethan Kurzwil is now a Bessemer partner and focuses on development platforms and technology users, and Twitch is the company he has invested in.

Ebay (now worth over $ 40 billion)

" Stamps ? Some coins ? Comic books ? You must be kidding me. So David Cowan (week 11) gives Ebay "no brains".

Note 11: David Cowan is now Bessemer partner. He was Twitch's first venture capitalist and has also invested in star companies such as Rocket Lab, LinkedIn, LifeLock, and Zapier.

Facebook (current market value over $ 93 billion)

During the summer of 2004 in the market, Jeremy Levine took a day off without being sponsored by Harvard University undergraduate Eduardo Saverin (week 12). Finally, Jeremy agreed to lunch. Kid, have you heard of Friendster? Come on, that too. "

Note 12: Eduardo Saverin and Mark Zukerberg join Facebook. As of March of this year, he still had a 1.88% stake in Facebook.

Note 13: Friendster is the creator of a social networking site that started in 2003. Once, 1 in 3 people in Silicon Valley use Friendster. Friendster was acquired by MySpace, and in early 2005 Zuckerberg was selling Facebook to MySpace for $ 75 million.

FedEx (current market value over $ 67 billion)

Do not believe! Bessemer has passed FedEx 7 times.

Google (current market cap of over 1.95 trillion wins)

In college, David Cowan's friend rented his car from Google co-founders Sergey and Larry. In 1999 and 2000, he attempted to introduce Cowan to "two smart Stanford students who used technology."

raised? New search engine? At the crucial moment in Bessemer's van portfolio, Cowan asked him, “How can I avoid parking? "

Intel (currently worth over $ 200 billion)

Pete Bancroft (Note 14) failed with Bob Noyce (Note 15). The latter turned to the commercial capital of Arthur Rock (Note 16).

Note 14: Pete Bancroft joined Bessemer Securities, CEO of BVP, in 1967, and became Chairman and CEO nine years later.

Note 15: Bob Noyce is co-founder of Fairchild Semiconductor and Intel, holding the title of “Priest of Silicon Valley”.

Note 16: Arthur Rock is the producer and speaker of the “venture capital” era and has invested and participated in the development of Fairchild Semiconductor, Intel and Apple.

Inuit (now the cost of business $ 80 billion)

Like all of Dune Road's other venture capitalists, Neil Brownstein has ditched Intuit founder Scott Cook. Scott stole $ 225,000 from a friend. One of his friends was Peter Wendell, a classmate at Harvard Business School and founder of Sierra Ventures. He himself invested $ 25,000 to support Scott.

kayak boat

After extensive research, Jeremy Levine discovered the uncertainty in Kayak's business model. Airlines will not pay a high price for the platform category. Fortunately, the hotel is prepared to pay for it. Separately, Priceline, which acquired Kayak for $ 1.8 billion, also agreed to pay.

Octa (current capitalization market over $ 35 billion)

In 2009, Salesforce alumnus Freddy Kerrest had lunch with co-founders Todd Mckinnon and Byron Deeter. They introduced SaaSure.com, which they recently created. Byron believes in their vision for the product, but in the early days of SaaS, migrating web applications to a smart, integrated cloud network was quite complex. Today, Okta is a leader in managing access to consumer products and has a market value of over $ 14 billion.

PayPal (current transaction value over $ 220 billion)

David Cowan skips round A. The new group, Nightmare Management and the $ 1.5 billion eBay acquisition will come four years later.

Note 17: In February 2002, PayPal went public and was subsequently acquired by eBay for $ 1.5 billion. In 2015 PayPal was rebranded by eBay and listed itself.

Snapchat (currently worth over $ 78 billion)

In 2011, Jeremy Levine landed three hours late at Los Angeles International Airport. Two meetings on his schedule that day were to be canceled. Jeremy actually tossed the coin and then called Snapchat founder Evan Spiegel to apologize. SNAP became the largest IPO in 2017.

Tesla (now worth over $ 1,000 billion)

In 2006, Byron Deeter faced both team and pilot athletics. He paid the deposit for the car, but looked at the wrong company and told his partner, “It's a win-win. I had a good car and a few VCs paid for the business. Its market value exceeds $ 30 billion. Byron pays full price for the Model X.

Zoom (currently at retail over $ 57 billion)

After using the next video conferencing product, Alex Ferrara has confirmed that Zoom is the winner. Most importantly, the founder of Eric Yuan as a professional congratulated him. However, Alex dropped Zoom's Series B funding in 2014 because the video conferencing industry was overcrowded with design companies and startups. Better or later than nothing, we are part of Zoom's $ 9 billion IPO

03.

Complete homes from Twilio and Shopify

BVP has invested in two of the startup's first airlines, PaaS Twilio with a market cap of over $ 46 billion and SaaS Shopify with a market cap of $ 175. Years of registration for 1 billion US dollars last a long time.

As a journalist, Eric Newcomer led an in-depth discussion with BVP partners and learned from his newsletter:

At a restaurant in San Francisco in 2009, Ethan Kurzweil, then co-founder of BVP, drew a check for $ 250,000 from his shirt and ceded his seat to Twilio CEO Jeff Lawson. Lawson pushed Bessemer to become the A-round's financial leader, but decided it would be best to give Lawson a small investment to see if Twilio customers embrace the new phone business.

This gene level control was not what Lawson hoped for, and in the end he failed the cash control. However, he postponed round A and started with a pre-A round in which BVP invested $ 125,000.

At the time, investors were thinking about the impact this had on developers. Elite venture capitalists like Bessemer also believe they can keep investors waiting for their money.

Bessemer pays close attention to Twilio. A few months after the Pre-A, Union Square Ventures' Albert Wenger suddenly stepped in and led Twilio to a $ 3.7 million Series A financial round, valued at $ 12.4 million. When Twilio went public in 2016, USV held 14% of the capital at a very low price.

Bessemer didn't make the same mistake in round B. I made the deal with Lawson on the feature film Twilio: Lawson called and said, "Press 1 to invest $ 10 million, press 2 to invest. earn $ 15 million… ”.

His partner Byron Deeter urges Lawson to take care of the family. Finally, Bessemer invested US $ 12 million, with a back-end investment of US $ 52 million, and Deeter served on the board.

Deeter is 47 years old and is a Bessemer expert and foreman. It also represents the public image of the company. At the same time and in the same place, he will be CEO of a large corporation. A former Bessemer employee described him as "a very good tutor". Deeter hosted the first Bessemer weather conference in 2007 and developed the now famous BVP Cloud Index in 2011.

In 2012, Deeter was hoping to take the C from Twilio and tell Lawson, "I'm so confident the company and the idiots in the store can't get you." laboratory. The following year, as Deeter tried to implement the same strategy, Lawson argued that the company needed another outsider, with the merger of Redpoint Ventures and Bessemer.

When Twilio went public in 2016, Bessemer owned 28.5% of the proceeds. The IPO had a market cap of $ 1.2 billion, with a market cap of $ 2.4 billion at the end of the first trading day. It was a glorious time in Bessemer history.

Twilio was once traded at $ 67 billion. Even Bessemer, who has worked with Twilio for a long time and has been appointed by SaaS to lead, doesn't think about it. Deeter is still a member of Twilio's board of directors, but Bessemer split Twilio shares for LP funds two years after the IPO. If these LPs were to sell, especially early on, they would lose millions of good profits.

But when merchants sell Shopify, they can lose tens of thousands of dollars.Bessemer begins investing $ 5 million in Shopify At the time of Shopify's IPO, Bessemer owned 26% of the proceeds and was valued at $ 500 million. over $ 25 billion.

At the end of 2018, Bessemer distributed all of its resources to LPs. Back then, Shopify had a market value of $ 15 billion, a tenth of what it is today.

These are the analysts who turn to Shopify for BVP. Daniela Bechet joined Bessemer in 2008. Before leaving in 2010, BVP did not vote for any of the 900 companies he mentioned. At the same time, another analyst, Tabel, invested in Pinterest after being flagged by events such as intelligence software firm Cornerstone OnDemand and big data firm Yodle.

Bechet became disillusioned with his investment strategy and decided to leave.

When he resigned, Shopify CEO Tobias Lütke eventually responded to his regular emails. He told her in an email. Shopify is looking for money and wants to talk to it.

Continuing the conversation, Bechet quit in August 2010, and BVP's classic Shopify memo dated October 12, 2010. At the time, Shopify only had 24 employees and raised $ 1 million. BVP's estimates include $ 0.8 million, $ 25 million, $ 50 million, $ 10 million, $ 25 million, and $ 400 million for home operations.

Daniela Bechet remembers Shopify:

"Shopify may not have become Bessemer's anti-wallet, but it may seem like a defense business in my life."

Bechet does not receive additional funds from BVP action on Shopify. If he stays with Bessemer until Shopify's Series A finances are over, Bechet might make a small investment.

We also took a look at why the BVP of VC 1.0 was achieved and why the trend of VC 3.0 customization emerged.