The Ledger
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Suster: VCs settled with embezzling founder, getting equity but zero cash
“It's one step worse than that, which is, I know of a company in which the founder embezzled money. Ok, literally stole millions of dollars. In order to not end up in a big legal battle, their VCs ended up settling, and they got all the stock back, but none of …”
Upfront Ventures sold $1.2B in secondary positions during 2021 peak
“We sold 1.2 billion dollars worth of positions in 2021. When everyone was writing crazy checks, I sold six hundred million dollars that year.”
Suster: Upfront generated $1.4B from six hard-to-fund, capital-efficient startups
“On average of our companies that take longer and that we had reserves for. On average, it took six years to raise a growth round. Okay. But those companies by definition are more capital efficient because they didn't have access to it. I have six deals that fi…”
Suster: Fast-growing startup rejected $350M acquisition offer before crashing to $0
“And then I had one big company that was incredibly fast growing is the fastest growing company I had ever seen. And so I piled money into it and it ended up being a zero. We had an offer to sell the company for three hundred and fifty million dollars. Founder …”
Upfront Ventures deployed nearly $50M into discounted secondaries in 2023
“So in 23, I started buying secondaries at discounts. We deployed almost fifty million dollars into secondaries in 23 at deep discounts at a time where other people were, like, scared about the market”
Suster: Upfront seed-invested in Ring after Shark Tank passed
“We were the seed investor in Ring. Everybody on Shark Tank passed on it. We wrote a check.”
Upfront Ventures is closing deals entirely remotely without meeting founders
“We funded a company today. We submitted the term sheet two weeks ago, and I've never met the founder in person. We greenlit another term sheet last Monday. It'll fund early to middle of next week. I've never met the founder in person. We are going to our partn…”
Suster passed on Uber and Box due to personal biases
“The obvious example, Harry, is Uber, where having lived in London and seen the taxi lobby and how strong the taxi lobby was in London, that clouded my vision for what was possible. Having lived in Los Angeles and seeing how few people ever use taxis, that clou…”
Suster: Upfront Ventures participated in zero SoftBank or Tiger deals
“So we had zero SoftBank deals, we had zero Tiger deals, we had one Coatoo deal, one Insight deal.”
Suster: Upfront maintains $3.2M-$3.5M initial checks and 18-21% ownership
“Since 2009, if you take every one of our funds, they've been median between 3.2 to 3.5 million dollar first check in. And they've been median between 18 to 21% ownership.”
Suster: Upfront reserves 58% of fund capital for follow-on rounds
“So, we invest 40% of our fund, usually 42% of our fund, and we reserve 58%.”
Upfront portfolio company traded 40% contract discount for one-year extension
“One of the things I was involved in helping guide one of the portfolio companies of which I'm involved through their single largest customer renegotiating their entire contract. And what we were able to do, sadly, you know, we cut, I don't know, 40% off the an…”
Upfront has two portfolio companies closing $50M+ capital rounds in April 2020
“And we have two companies closing north of fifty million dollar rounds this month.”
Upfront has maintained a strict three-year fund deployment cadence since 2009
“And we've been religiously on three years since 2009. So our funds have been oh nine, 12, 15 and 2018.”
Suster: Upfront Ventures maintains median entry valuation between $11M and $12M pre-money
“So our median valuation on entries between 11 to 12 pre”
Suster: Upfront Ventures is not doing a lot of generative AI investing
“We don't write right now upfront is not doing a lot of generative AI.”
Suster: Upfront Ventures is deploying significantly more capital into space
“We're putting way more dollars into space right now.”
Upfront Ventures favors $3M checks over $10M checks during economic downturns
“We're tending to fund a lot more, call it, three million dollar checks than ten million dollar checks in terms of new money right now.”
Upfront reserves roughly 60% of fund capital for follow-on investments
“So we're investing somewhere between 39 to say 42% Of our fund in first jacks, and we reserve the balance and then we pace ourselves.”
Upfront allocates 89% of fund dollars to Seed and Series A
“So we do 89% over the last several funds has been about 89% in seed and A. And of that 89%, two-thirds of it is A, one-third of it is seed. So we're actually pretty sizable seed investors, but we are, as you said earlier in the show, A investors. We do 11% of …”