about this episode
TWiST Special Bonus Episode #140.5 with William Quigley, VC and Author
What do the next ten years look like for founders and VCs? William Quigley has an idea. In this special TWiST bonus episode, Quigley discusses his new report “A Venture Capital Revival is Upon Us” and shares his thoughts on why the future for entrepreneurship and investing looks bright.
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1:00-2:00 Introduction of guest William Quigley, author of this article and the report, “A Venture Capital Revival is Upon Us.”
2:00-3:45 Thank you to the TWiST List members. If you’d like to join this special group, go to twistlist.co and sign up.
3:45-5:45 Thank you to .CO for sponsoring the show.
5:45-7:00 Welcome William. How long have you been in the VC game?
7:00-9:30 Bill Gross of Idealab conceived the idea for incubators, yes?
9:30-10:00 When you worked at Disney, were Walt’s original ideas still in play?
10:00-11:30 Financing is a big part of Disney’s business, isn’t it?
11:30-13:00 Tell us what the basic premise of the article was and why you wrote it. (Watch the clip.)
13:00-14:30 Do you think people think venture returns aren’t high enough?
14:30-16:00 So the VC community got almost $83B to invest in 2000, but the market was shrinking?
16:00-17:30 Quigley: It took 10 years–near 2009/2010–but all of those great commitments of 2000 were starting to disappear.
17:30-18:45 What does that mean? Will 50% of companies IPO this year?
18:45-19:30 Do you estimate that 5% of VCs will reduce their position with a secondary sale?
19:30-20:30 The number of VC firms is now down by two-thirds?
20:30-21:00 Quigley: It takes several decades to become a good investor. The money was easy to get, but trained investors were hard to come by.
21:00-22:00 What’s the #1 thing you’ve learned as a VC? (Watch the clip.)
22:00-23:30 Are you saying that the larger companies (Microsoft, Google) are trend-driven?
23:30-25:00 Everyone thinks the VCs have the power, but who really does?
25:00-25:45 Is it a good sign or a bad sign if people quit a startup because the entrepreneur is pushing too hard?
25:45-26:45 Do you have to be an a-hole to be a great CEO?
26:45-27:30 Why did we fall of a cliff with investing? Is it because rich people are actually poor?
27:30-28:00 So clean tech is up a lot?
28:00-28:45 We are running the best companies on a global basis–true or untrue?
28:45-29:30 What will be ratio be in 2020 for money earned in the US vs. internationally?
29:30-31:15 Jason relays a story about Mark Pincus in the pre-Zynga years.
31:15-33:15 Quigley: Foreign companies are increasingly buying US companies today.
33:15-34:00 The opportunities now are many-fold what they were but we still have less VC money.
34:00-35:30 How did we get to a level of almost zero for today’s venture capital fundraising?
35:30-36:15 We’ve seen early stage go up, but not at crazy levels? It’s not a bubble but there’s a little bit of froth, would you say? (Watch the clip.)
36:15-37:15 So the smart kids in the VC world are still here, post recession?
37:15-38:15 Quigley: Think about the classes: The class of 2011/2012 is going to be legendary, with Facebook, Twitter, LinkedIn, Yelp, Pandora, etc.
38:15-38:30 The goal is to hit a billion users for these new companies.
38:30-39:00 Why would Facebook not pay for Skype?
39:00-39:30 So you’re saying Facebook should be public by now?
39:30-41:00 Quigley: The landscape is quite good for early-stage investors.
41:00-42:00 Quigley: Microsoft’s $650M valuation was stunning to me.
42:00-42:30 So this is a sign that LPs may want to get in the pool again?
42:30-44:00 Thank you to William for this insightful episode and report.
44:00-44:15 Reminder to join the TWiST List at twistlist.co.
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Further Background on William Quigley, his report and Clearstone Venture Partners
- Currently Managing Director at Clearstone Venture Partners
- With the company since shortly after its founding in 1998
- Focus is on consumer Internet, wireless and enterprise markets
- Portfolio includes Xfire.com, Titan Gaming, AOptix Technologies, SoonR, Meru Networks, Novariant, EverTune
- Past positions include Managing Director at the Idealab! Incubator, Fellow at the Ewing Marion Kauffman Foundation and Director of Finance at the Walt Disney Company
- Blogger at QuigleyReport.com
- Lives in LA (Pacific Palisades)
Key Points from William’s Report, “A Venture Capital Revival is Upon Us”
- William’s TechCrunch article and report: http://techcrunch.com/2011/05/08/the-next-10-years-will-be-great-for-both-founders-and-vcs/
- VC funding had reached a peak of $83B in 2000, only to fall to $9B by 2003
- Quigley estimates there will be 80 VC-backed IPOs in 2011 (compared to a low of 6 in 2008)
- “Earlier tech cycle” companies (Cisco, Amazon, Microsoft) had low IPO valuations compared to their eventual value
- Pre-money IPO valuations for “new tech cycle” companies are skyrocketing (VMWare, Google, Facebook)
- Internet access has exploded since 2000, with over 420M users in China and 239M users in the US today
- The number of hedge funds has doubled since 2000; assets have tripled to $2 trillion
About Clearstone Venture Partners
- Founded by Bill Elkus in 1998 with a two-person office in Pasadena
- Now staff of 20 worldwide with over $650M in committed capital and 2 dozen active portfolio companies
- Key areas of interest are enterprise computing, wireless and optical communications, micro-processors, Internet business models, imaging and transformative infrastructure
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