The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
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Janeway: Non-traditional late-stage tech investments will end in painful correction
“Now, when you see investors, hedge funds, mutual funds, paying premium prices, To buy illiquidity, to buy securities with no liquidity and with no governance rights. In the private market. The only thing you know is when it ends, it will end painfully.”
Janeway: Low launch costs make spray-and-pray seed investing rational
“This means, on the one hand, a step function increase in the number of startups, in the number of Darwinian hopeful monsters. Most of which will fail. Most of which will fail Pretty fast, and without costing an enormous amount of money, so that at the front en…”
Janeway: Startup Quality Inevitably Declines When Cheap Capital Is Plentiful
“Again, the people on the other side of the market aren't morons, so the quality inevitably will decline. Inevitably.”
Janeway: Cash and control are the only hedge against startup uncertainty
“The central theme of the whole first half of my book is that there's only one way to hedge against uncertainty in venture startups. You don't have credit default swaps. You know, you don't have instruments that you can buy to hedge your position. It's two word…”
Janeway: Venture capital functions as distributed R&D for incumbent corporations
“Well, what I'm saying is that because getting public is so difficult and so rare for venture-backed tech companies that, practically speaking, we should be thinking about that what we're doing is funding distributed research and development for big companies.”
Janeway: VC funding fundamental science instead of technology commercialization is dangerous
“I mean funding science. Rather than funding, funding the commercialization of technology and finding commercially valuable new innovative applications of technology.”
Janeway: Billions wasted in mid-2000s VC nanotech and cleantech investments
“Back in the mid-aughties some billions of dollars were wasted in venture guys investing in nanotechnology. Venture guys investing in science for ultimately Clean tech opportunities, but that were way upstream, that took much too long, much too much money, and …”
Janeway: Speculative tech bubbles are necessary to finance major new infrastructure
“Bubbles are banal, but every once in a while, they're not only necessary, they're productive, because they bring together the magnitude of capital you need to build out the new network infrastructure and to finance the exploration of the new economic space tha…”
Janeway: Private tech bubble collapse won't threaten the broader economic system
“Now the good news about that is that when it bursts, the, some of these companies that have learned nothing about business discipline will disappear, and the people who have invested in them will lose their money, maybe their jobs, that usually happens as well…”
Janeway: Only five out of 85 current unicorns will become great companies
“Out of those 85 unicorns, there are five great companies. And by the way, that's the necessary waste of trial and error.”
Janeway: Only four quarters between 2005 and 2019 saw 20+ venture IPOs
“Since then, we've had all of about four quarters in 15 years when there have been as many as 20 venture capital backed IPOs.”
Janeway: Major investment banks require $100M+ IPOs to hit fee minimums
“To get the attention of the global major dealer banks, you've got to be offering them a transaction on which they can make at least five million dollars, and you start doing the arithmetic on the economics of an IPO, and you're up in the nine figures to do an …”
Janeway: Cloud and open source drop software launch costs to near zero
“Open source software, web services from the cloud, which means that the cost in terms of time and money of launching a new service Has declined asymptotically to zero. Not building it out into a full business, but launching it.”
Janeway: Positive cash flow frees founders from capital market dependence
“Positive cash flow from operations means that you, the entrepreneur, the venture capitalist, Own options. You own the options about whether to sell or not sell, whether to raise more money or not raise more money. You're not a prisoner of the capital markets.”
Janeway: Liquidity is the single most crucial concept in finance
“There is no more important world in the world of finance, word in the world of finance, than liquidity. Because again, it's the flip side of positive cash flow from operations. It's your control over your situation.”
Janeway: I Prefer Founders Who Survived Failed Startups or Corporate Crisis
“Well, the first way I actually begin is by looking at the biographies, of course. I have a heavy propensity for people who have survived failed startups, near-death experiences of big companies, and along the way have demonstrated some degree of creative disci…”
Janeway: Google stands out for its exceptional culture of integrating acquisitions
“I'm very, I have to say, I'm extraordinarily impressed by Google's style of being able to acquire and support and create space. Now, if you're as rich as Google is, you can afford to do that, but it's a cultural phenomenon.”
Janeway: VCs have 3 to 5 years to prove startup success
“You know, we only have Three to five years to demonstrate that we've done something smart when we've made a startup investment.”
Janeway: Venture-backed IPOs averaged 30 per quarter from 1980 to 2005
“From 1980, this is my own data, this data published in peer-reviewed journals, from 1980 to 2005, The average number of venture-backed IPOs per quarter was about 30, with a standard deviation of 10.”