angels in the valley typically invest $25K-250K, usually for companies with pre-money valuations at between $1M-$5M, perhaps up to $10M. at those valuations, exits in the range of $25-75M that occur within 1-3 years do quite fine for their investors.

VCs typically invest $2-10M, perhaps up to $25M, usually for companies at pre-money valuations that are between $5-50M, or higher for later stage firms / financings. at the $5-50M valuation, exits in the range of $100M-$500M+ within 2-5 years are required to make them work.

you may be assuming the former category of investing require the returns of the latter category to work, but you would be WRONG. (and some might say, f***ing clueless, but i digress).

of course, the % of wins in each is also important, but in both cases most groups assume a 1 out of 5 winner to loser ratio is doing pretty good. VCs tend to aim for bigger wins, and have lower %’s. angels can aim for smaller wins, but probably need higher %’s.

altho technically Jeff’s new fund is in the category of “small VC”, his investment size is probably still in the angel category, and thus his return requirements are likely similar. right now Jeff appears to be hitting on 1 out of 4, with exits in the $10-75M range, and a lot of his portfolio yet to come in. that’s pretty good.

if you want an education on VC investing, read The Venture Capital Cycle, by Gompers & Lerners. it came out in ‘99 so it’s a bit dated, but the general principles still apply. however, it’s likely sparse on angel investing.

in any case, hope this info is helpful.

again, ask around the valley and most people (entrepreneurs, angels, & VCs) think that Jeff is doing a pretty damn good job.

- dave mcclure

Most “real companies” never approach those kind of values at all. Ever.

Most companies never even get to the stage where they’d attract a multi-million dollar VC investment.

You appear to be blinded by the trickle of large exits that gets all the attention. They are the exceptions rather than the rule.

A professional VC should not care about the size of the exits, but about the return on investment, as should everyone else involved. If you don’t get that, it’s you who don’t understand investing.

That goes for founders too - not everyone wants to take the risks and make the investment in terms of sacrifices and workload needed for a one shot at the huge exits rather than actually have a life while building a solid company, get a reasonable exit and move on to their next thing.

You, rather than Jeff, is the one that should be embarrassed over making those claims about Jeff’s exits based on nothing but the dollar amount.

I have heard nothing but good things about him as a person as well as investor and advisor and it is in my opinion bad taste to bash him in this forum.

As the saying goes….if you don’t have anything nice to say don’t say it.

Jeff…..congrats on the launch of the fund. I am sure you will get some more great winners with the new fund.

Club Penguin was an “of course”, for instance (Disney is a failure in so many areas and MMORPG was the answer to ads and hyperreality build-up), TechCrunch should really start a big investment firm, I’d join in for the trending and tracking. I still don’t understand why most firms haven’t implemented Numenta yet or started developing apps with that platform — there’s a strong chance of perfect predictive analytics and AI — Rather interesting

A professional VC, as opposed to an angel, should be embarrassed with exits that *at their best* are between $25-50M. These are disasters, not positive outcomes. In fact, by definition, he is building companies to flip (or features) not real companies.

To compare Jeff to Reid and Josh is like saying Steve Kerr is in the same class as Michael Jordan.

and, yup, i’m with dave in saying that playing with Jeff is the best way to play.

Congratulations on the new fund, Jeff.

- dave mcclure
http://500hats.typepad.com

re: successes above, they may not be the kind of wins Sequoia needs to make money, but for an investor who’s putting in money early, jeff is doing VERY well… i don’t know of ANY other “Web 2.0 VCs” who have the kinds of winning ratios jeff gets from his companies. 5 decent exits from

i’m personal friends with at least 4 of the CEOs in Jeff’s startups, and without question they all feel he is one of the smartest, friendliest, & most reasonable VCs they’ve ever worked with. i’ve personally co-invested with jeff in 3 companies, worked with him on the SDForum Search SIG (where he’s pictured above with Kevin Rose), and hung out with his family & kids. he is both intelligent & a good guy, and (when he’s not too busy) one of the best VC bloggers around. if anything, jeff is usually way more engaging & polite than most tech investors… and given the # of requests for his time these days i’m surprised he’s maintained an even keel.

re: successes above, they may not be the kind of wins Sequoia needs to make money, but for an investor who’s putting in money early, jeff is doing VERY well… i don’t know of ANY other “Web 2.0 VCs” who have the kinds of winning ratios jeff gets from his companies. 5 decent exits from

Yes, Jeff comes across as cocky and arrogant.