Original Bessemer Investment Memos for Shopify, Twilio, LinkedIn, Pinterest | Hacker News Reader

Original Bessemer Investment Memos for Shopify, Twilio, LinkedIn, Pinterest

bvp.com

103 pointssethbannon19 comments

Extremely valuable to see how VCs thing. It's interesting to see how the different partners approach the memo differently (some focusing on metrics, others focusing more on product) and also how it evolves over time. Thanks to Bessemer for making this available.

I would love to see the same for some of their investments which didn't pan out.

Might be optically, legally and reputation ally difficult. In addition they might not bother papering rejections.

I think GP means failed rather than rejected investments. Still optically and reputationally difficult though, but could cherry-pick (as they surely have here) ones that were very cautiously optimistic that the company had a slim chance of being very successful or whatever. (I mean, more than that's true of all of them.)

likewise

perhaps more to learn from those

Nice to see projections and figures for these companies but...

I wonder when reality will hit these non-earning tech stocks. The P/E ratios are just absurd. Surely the FED can't hold the dam for much longer?

The thing is - it might never hit.

If the market has assumed the risk, the model of a tech stock might have fundamentally changed.

Hmm, I suppose it's different this time?

What's "reality"? P/E need not have anything to do with NPV, which is the key.

Suppose that I'll charge you $1000 today and next year and then give you $1000/year "forever". The P/E analog this year and next is horrible, but that's a great investment (for you - it's lousy deal for me).

My point is that P/E is only useful when a company is roughly stable now and into the future. If it isn't, P/E is a lousy predictor of NPV.

Are these memos redacted in some way? Would there be a separate diligence memo or is this the sort of final summary on why an investment would be made?

They look like the letters to the LPs as opposed to the memo a partner writes when they want their partners to approve the investment.

Did any VC ever publish similarly detailed analysis of companies that they didn’t invest in and regretted later?

It's not quite as detailed, but BVP actually published their "anti-portfolio" from back in the day which is exactly you're asking about: https://www.bvp.com/anti-portfolio/

Great find!

Rarely get to see how others think on deals. Led me to try this out with my own substack.

Nominally successful companies--However, when I find myself (generally unwillingly) interacting with any of these companies currently, I find myself wishing for the vengeful fires of a thousand suns to burn them painfully into microfine ash.

Just watch not to inhale the ash. It is probably very toxic ; )

I had a similar thought, if not so colourful.

Patting themselves on the back for supporting these companies (aside from Twilio) seems short-sighted to me. More gatekeepers, more bloat, more greed. Just what the internet needs.

> In retrospect, the early products themselves are barely recognizable today. Rather, passionate, analytical and relentless founders zigged and zagged their way to that elusive “product-market fit”

I wonder to what extent the founders' early visions had to be eroded to the lowest common denominator.

Do you think that founders’ change in equity could be a proxy for the “vision erosion” you’re thinking about? I’m trying to think of others data point other than the founders stating their perspective (which may not happen publicly).

What issues have you had with shopify? I've had a great experience

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