Songkick Secures Sequoia's First Ever UK Investment with a $10M B Round(techcrunch.com)
techcrunch.com
Songkick Secures Sequoia's First Ever UK Investment with a $10M B Round
http://techcrunch.com/2012/03/08/songkick-secures-sequoias-first-ever-uk-investment-with-a-10m-b-round/
30 comments
Me too. Songkick is one of the startups we've funded that has affected my life most as a user. Before Songkick, Jessica and I never went to see live music, because the bands we like are kind of obscure and we'd never find out they were coming to the Bay Area till too late. But thanks to Songkick we've now been to a bunch of concerts together.
Delighted for the guys, I met a couple of them while I was speaking in Cambridge, smart team of fantastic and enthusiastic people. It's a really good consumer play solving a very real problem. Funding makes perfect sense for them, in my opinion.
I can't work out why jpdoctor is so down on this, but each to their own.
I can't work out why jpdoctor is so down on this, but each to their own.
I wonder how much of SongKick's data is sourced from ArtistData: http://www.artistdata.com/us/network ?
Off-topic: I'm curious. If a US VC invests outside the US do they have the same tax issues getting returns back into the country as other companies? e.g. Apple etc. Or does the money never leave in the first place?
Wow, this is awesome! Always been a big fan of London-based YC startups :)
Congrats! Well deserved :)
Congrats. Since I saw it I've wished someone would do this for comedians. I don't like live music, but I love live comedy. Get on that, someone!
congrats ian and team.
> Something tells me there’ll be a few drinks sunk in Bar Music Hall tonight.
As I've said before: The fact that people "celebrate" a funding event is really bass-ackwards when you think about it.
It says that the company couldn't figure out how to grow without bringing in a bunch of financiers, who have a low hit rate (3 go north, 3 go south, 4 turn into the living dead), who provided negative 10 yr returns even with Google in the portfolio, and who take 2-3% + 20% of exit from their own investors.
Definitely an excuse to drink, but not for reasons of celebration.
As I've said before: The fact that people "celebrate" a funding event is really bass-ackwards when you think about it.
It says that the company couldn't figure out how to grow without bringing in a bunch of financiers, who have a low hit rate (3 go north, 3 go south, 4 turn into the living dead), who provided negative 10 yr returns even with Google in the portfolio, and who take 2-3% + 20% of exit from their own investors.
Definitely an excuse to drink, but not for reasons of celebration.
And as I've said before, if you're going to say something nasty, you'd better be right.
Practically all the most successful tech companies have raised outside funding. If raising money is a sign of lameness, then for some strange reason the most successful startups all seem to be the lame ones.
Honestly, you should be ashamed of yourself. The Songkicks have worked hard. This is a big milestone for them. And you are pissing all over it without knowing anything about them, just because this news happened to trip some idee fixe you're in the grip of.
Practically all the most successful tech companies have raised outside funding. If raising money is a sign of lameness, then for some strange reason the most successful startups all seem to be the lame ones.
Honestly, you should be ashamed of yourself. The Songkicks have worked hard. This is a big milestone for them. And you are pissing all over it without knowing anything about them, just because this news happened to trip some idee fixe you're in the grip of.
> you'd better be right
Did I get wrong 1. hit rate, 2. negative IRRs or 3. the take?
> Practically all
But not all.
Did I get wrong 1. hit rate, 2. negative IRRs or 3. the take?
> Practically all
But not all.
I don't know Sequoia's hit rate (and I doubt you do either) but you got 2 and 3 wrong, yes.
Practically all is enough to falsify your claim.
Practically all is enough to falsify your claim.
Re 1: You have not heard that saying from Sequoia?
Re 2: Linked elsewhere, but again here wrt negative IRRs
http://www.matrixpartners.com/site/press_detail/63/ And the lawsuit ISTR that resulted from that article: http://www.universityofcalifornia.edu/news/article/9917
Re 3: Please let us know the carry and take numbers.
Re 2: Linked elsewhere, but again here wrt negative IRRs
http://www.matrixpartners.com/site/press_detail/63/ And the lawsuit ISTR that resulted from that article: http://www.universityofcalifornia.edu/news/article/9917
Re 3: Please let us know the carry and take numbers.
The first article doesn't talk about the final returns from any Sequoia fund but merely points out one was down halfway through its 10 year life.
The second does talk about final returns and says "UC investments in partnerships managed by Sequoia Capital (Funds III to X) have returned over $508 million on an investment of about $110 million for a 4.6-fold return."
The second does talk about final returns and says "UC investments in partnerships managed by Sequoia Capital (Funds III to X) have returned over $508 million on an investment of about $110 million for a 4.6-fold return."
Yes the second article is about the appeal. UCal did not wish to be kicked out of Sequoia funds so they played up the internet bubble funds to present to the judge.
It was the disclosure on negative IRRs that led to the first article that got them disinvited from Sequoia iirc. UC was just obeying disclosure laws. Do you remember differently?
Of course, VCs could just release their performance history numbers so that investors and prospective entrepreneurs know what the percentages are. Who does it serve that they don't release these numbers?
It was the disclosure on negative IRRs that led to the first article that got them disinvited from Sequoia iirc. UC was just obeying disclosure laws. Do you remember differently?
Of course, VCs could just release their performance history numbers so that investors and prospective entrepreneurs know what the percentages are. Who does it serve that they don't release these numbers?
Growing a company takes money. Some people can manage to bootstrap it, and those people deserve a lot of credit. However, most can't. Employees need to be paid, and going from $0 to (($100k * # employees) + office space + hosting + etc) isn't something that can normally be done fast enough.
The challenge isn't to get funded. The challenge is to find a VC who can improve your valuation by more than the percentage they take. Finding that is worth celebrating.
The challenge isn't to get funded. The challenge is to find a VC who can improve your valuation by more than the percentage they take. Finding that is worth celebrating.
> The challenge is to find a VC who can improve your valuation by more than the percentage they take.
And considering that their IRR's are negative (they're not even making money for their limiteds), which VCs would that be?
And considering that their IRR's are negative (they're not even making money for their limiteds), which VCs would that be?
You don't know what you're talking about. Few if any of Sequoia's funds have ever had a negative IRR, as far as I recall. Their record is unparalleled, really.
From the entrepreneur's side, or from society's, who cares?
(I agree Sequoia, Benchmark, Accel, and a few others are ballers, and I'd love to someday be an LP in a few, but that's not really what we're discussing.)
If a fund has a way to raise money steadily based on past reputation, market irrationality, a large collection of compromising photographs of leaders of oil producing countries, or whatever, and invests that money in a bunch of bad-investment startups but also my going-to-be-successful startup, it's a win for me and my users.
And those "bad investment startups" might actually be amazing companies, producing wonderful products which make the world better -- just at a really high valuation. There is surely some price at which a good company is a bad investment.
Maybe there's an argument for sustainability, but that's more over the long term. In 1999, or if you believe 2007 or now is an overpriced period for startup valuations, it still makes sense to raise VC if it will help your business, even if it doesn't make a risk-weighted great return for the VC. I don't believe this is the case now, but it's irrelevant to the argument of whether a startup should take VC.
(I agree Sequoia, Benchmark, Accel, and a few others are ballers, and I'd love to someday be an LP in a few, but that's not really what we're discussing.)
If a fund has a way to raise money steadily based on past reputation, market irrationality, a large collection of compromising photographs of leaders of oil producing countries, or whatever, and invests that money in a bunch of bad-investment startups but also my going-to-be-successful startup, it's a win for me and my users.
And those "bad investment startups" might actually be amazing companies, producing wonderful products which make the world better -- just at a really high valuation. There is surely some price at which a good company is a bad investment.
Maybe there's an argument for sustainability, but that's more over the long term. In 1999, or if you believe 2007 or now is an overpriced period for startup valuations, it still makes sense to raise VC if it will help your business, even if it doesn't make a risk-weighted great return for the VC. I don't believe this is the case now, but it's irrelevant to the argument of whether a startup should take VC.
We look forward to your table of % returns.
Edit: Sorry jfarmer, it doesn't let me reply below. As far as never having seen negative IRRs, this is old but is out in the open
http://www.matrixpartners.com/site/press_detail/63/
Edit: Sorry jfarmer, it doesn't let me reply below. As far as never having seen negative IRRs, this is old but is out in the open
http://www.matrixpartners.com/site/press_detail/63/
shrug You don't have to believe me. It's no skin off my back. But as you say, you don't have access to that information.
Looking at the people who have responded to this thread, I see at least three people who do.
So, maybe check yourself? Wovon man nicht sprechen kann...
Out of curiosity, have you ever raised outside capital before?
Looking at the people who have responded to this thread, I see at least three people who do.
So, maybe check yourself? Wovon man nicht sprechen kann...
Out of curiosity, have you ever raised outside capital before?
Fair enough.
But note that article is from 2004, and it's talking mostly about funds raised post-1999, i.e., immediately before the dot-com crash.
If you were sincerely interrogating the data, you'd ask yourself how Sequoia faired relative to other funds and asset classes in that same time period. For example, did it still beat the stock market?
You'd also admit that 2004 is right when the "internet sector" saw a huge upswing. Facebook (2004). YouTube (2005). Yelp (2004).
Instead it's clear you're just trying to find data to prove your inane point.
Anyhow, this is really pointless. Enjoy the feeling of internet vindication.
But note that article is from 2004, and it's talking mostly about funds raised post-1999, i.e., immediately before the dot-com crash.
If you were sincerely interrogating the data, you'd ask yourself how Sequoia faired relative to other funds and asset classes in that same time period. For example, did it still beat the stock market?
You'd also admit that 2004 is right when the "internet sector" saw a huge upswing. Facebook (2004). YouTube (2005). Yelp (2004).
Instead it's clear you're just trying to find data to prove your inane point.
Anyhow, this is really pointless. Enjoy the feeling of internet vindication.
You're wrong about that too. A lot of VCs don't make money but the top VCs (including Sequoia) certainly do.
I had forgotten that Sequoia terminated UCal from their funds for disclosing their returns.
http://www.universityofcalifornia.edu/news/article/9917
http://www.universityofcalifornia.edu/news/article/9917
On Sequoia's Linkedin investment:
"Sequoia Capital, the earliest venture capital investor, are not selling any of their stakes of 21 per cent. Sequoia had paid $4.7m for its stake, now worth some $1.5bn."
Source: http://www.ft.com/cms/s/2/ded6de58-0fe4-11e1-a36b-00144feabd...
"Sequoia Capital, the earliest venture capital investor, are not selling any of their stakes of 21 per cent. Sequoia had paid $4.7m for its stake, now worth some $1.5bn."
Source: http://www.ft.com/cms/s/2/ded6de58-0fe4-11e1-a36b-00144feabd...
I don't think anyone ever argued VC funding was sufficient to be successful -- it's just nearly necessary in some stages of many businesses to do certain things.
Series B investment is a lot different from "should I bootstrap or not" in the early stage. I think there are a whole lot more people who can work without salary for a year or two, and maybe dump a few hundred thousand of their own money into a business, getting it proven and to profitability, than there are people who can take a successful business, see great metrics, and decide to invest a spare $10mm in taking over the world.
It's useful to argue against VC financing as a "requirement" for early stage businesses (even though it helps a lot of businesses) mainly because it removes an excuse from people who can't raise money (by being in the wrong place, whatever) starting now.
There's very little point in arguing for or against Series B and later funding -- by that point, you either have a business or you don't.
Series B investment is a lot different from "should I bootstrap or not" in the early stage. I think there are a whole lot more people who can work without salary for a year or two, and maybe dump a few hundred thousand of their own money into a business, getting it proven and to profitability, than there are people who can take a successful business, see great metrics, and decide to invest a spare $10mm in taking over the world.
It's useful to argue against VC financing as a "requirement" for early stage businesses (even though it helps a lot of businesses) mainly because it removes an excuse from people who can't raise money (by being in the wrong place, whatever) starting now.
There's very little point in arguing for or against Series B and later funding -- by that point, you either have a business or you don't.
> It says that the company couldn't figure out how to grow without bringing in a bunch of financiers
That is completely false. The most common reason companies raise VC money is so they can grow at a faster rate than they could without funding. If you have a business where X dollars invested in customer acquisition equals X+Y dollars in revenue but your revenue lags your customer acquisition by 6-12 months then you should go raise all the money possible given the size of the opportunity you are pursuing. Focusing on near-term profitability is not always the right decision.
That is completely false. The most common reason companies raise VC money is so they can grow at a faster rate than they could without funding. If you have a business where X dollars invested in customer acquisition equals X+Y dollars in revenue but your revenue lags your customer acquisition by 6-12 months then you should go raise all the money possible given the size of the opportunity you are pursuing. Focusing on near-term profitability is not always the right decision.
Counting the PhDs at Songkick is interesting. Excessively smart people who are passionate about the problem domain (and luck) seems to be the only way to make up for the structural problems in the music industry.