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NEA and Accel are both top-shelf VCs and have been the primary investors in Groupon thus far. They've both raised a number of funds and their ability to contin

by wheels 16y ago

NEA and Accel are both top-shelf VCs and have been the primary investors in Groupon thus far. They've both raised a number of funds and their ability to continue doing so most likely indicates that they have seen their investments appreciate and returned gains to their limited partners, and as a result, by definition, are not overvaluing their aggregate assets. The latest entrant to their set of investors is Digital Sky, who at one point seemed to be naively inflating startup valuations when they took slices of Facebook and Zynga, but in retrospect seem nigh on clairvoyant: they were prescient enough to grab decent chunks of two firms that are likely IPO bound, in a time where tech IPOs are freakishly rare. So what we're talking about is successful, proven experts at figuring out what companies are worth on the open market, and a random jab is supposed to invalidate that?

trotsky 16y ago
Accel Partners is obviously a top shelf group but they are still in the venture capital game. The industry in general relies on a minority of investments paying well enough to cover a majority of investments that never recoup. Since a decision to invest $10M into a company that later fails (or fails to recoup) qualifies as overvaluing an asset, Accel must be overvaluing some of their assets. In fact, on industry average, VC firms are in the business of overvaluing individual assets a majority of the time.
- wheels 16y ago
  A critical word in what I said was aggregate assets, and a critical word in yours was outlandish. Sure, the median venture investment will be overvalued, but for it to be outlandishly overvalued would imply that it's unreasonable even within its asset class. That's a strong claim to make with next to zero data given that people with a wealth of data and a track record of making sense of that type of data obviously disagree.

by wheels 16y ago

trotsky 16y ago

Accel Partners is obviously a top shelf group but they are still in the venture capital game. The industry in general relies on a minority of investments paying well enough to cover a majority of investments that never recoup. Since a decision to invest $10M into a company that later fails (or fails to recoup) qualifies as overvaluing an asset, Accel must be overvaluing some of their assets. In fact, on industry average, VC firms are in the business of overvaluing individual assets a majority of the time.

wheels 16y ago
A critical word in what I said was aggregate assets, and a critical word in yours was outlandish. Sure, the median venture investment will be overvalued, but for it to be outlandishly overvalued would imply that it's unreasonable even within its asset class. That's a strong claim to make with next to zero data given that people with a wealth of data and a track record of making sense of that type of data obviously disagree.