Terrence Rohan @tmrohan Twitter profile

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Terrence Rohan

2 years

Every single successful startup I know has persevered through at least one: - struggled to raise - co-founder split - failed first product/low early PMF - adversarial board/investors - layoffs These don’t typically hit the headlines, but almost every success has at least one.

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Terrence Rohan

@tmrohan

1 year

Incredible, there are currently 1,205 unicorns ($B+ valuations).

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Terrence Rohan

@tmrohan

6 months

I was lucky enough to work at Google ‘05-10. We were in the office, 9a-8p, Mon-Thurs; Friday 9a-5p. Saturday people took off (kinda). Back online Sunday most of the day. I think you miss something profound if you don’t have this work environment early in your career.

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Terrence Rohan

@tmrohan

2 years

Who introduces you to a VC fund matters 10x more than you think.

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Terrence Rohan

@tmrohan

1 year

A startup with 35 employees has an average of 102 SaaS tools.

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Terrence Rohan

@tmrohan

1 year

The less you need Venture Capital the more Venture Capital wants you.

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Terrence Rohan

@tmrohan

1 year

In a company with 100 employees, 10 will produce half the work. This is Price’s Law: 50% of the work is produced by the square root of the total employee base.

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Terrence Rohan

@tmrohan

2 years

Seed valuations now range from $5m to $150m.

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Terrence Rohan

@tmrohan

2 years

Seed is the only essential round. From there, Venture Capital is best viewed as useful but optional.

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Terrence Rohan

@tmrohan

4 months

Silicon Valley’s main competitive advantage is optimism.

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Terrence Rohan

@tmrohan

3 years

Startups creating tools for startups are ‘startup-to-startup’ or ‘S2S’ co’s 🐥 Atlassian, Slack, Zoom 🐣 Commsor, Figma, Front, Linear, Loom, Mercury, Plaid, Notion, Retool, Runway, Vouch, Vanta, WorkOS.. S2S’s are 🔥 Building for startups is now the best startup market 📸

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Terrence Rohan

@tmrohan

2 years

It’s fair play to ask a VC fund who their LPs are.

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Terrence Rohan

@tmrohan

5 months

Great founders make bad employees.

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Terrence Rohan

@tmrohan

1 year

Seed company of mine pitched 38 VCs getting all no’s until the 39th gave them a TS. The 39th was a Top 5 fund. It’s cold out there but never stop believing.

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Terrence Rohan

@tmrohan

2 years

Founders make more money than VCs and that is the way it should be.

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Terrence Rohan

@tmrohan

2 years

Microsoft Teams has 13.5x more MAU than Slack (270M to 20M) 👀

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Terrence Rohan

@tmrohan

2 years

Gsuite is a target. On their own, Gmail, Calendar, Slides, Docs, Sheets, Forms and Drive are just fine. 2x the design of each those products, and bundle. Package the whole enchilada (~Rippling thesis). That's a generational, $100B to $1T SaaS company.

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Terrence Rohan

@tmrohan

1 year

Tiger’s approach would be 10x more effective in today’s market.

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Terrence Rohan

@tmrohan

1 year

The $5m Seed and $30m Series A benefits the VCs more than the startup. VCs encourage CEOs to ‘raise more’ to justify bloated fund sizes to LPs. Bigger funds = more mgmt fees, carry, ‘status’ Nice for VCs, bad for CEOs. The right sized round is a $2.5m Seed and a $15m Series A.

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Terrence Rohan

@tmrohan

2 years

SAFEs, but for Series A, B, C, etc. Standardized the docs for preferred rounds. This would usher in an era of venture rounds not bound by a ‘lead’ investor.

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Terrence Rohan

@tmrohan

1 year

The best seed investments are where you’re certain about the founder and uncertain about the idea.

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Terrence Rohan

@tmrohan

3 years

Venture Capital is disrupting faster than most VC’s would like to admit.

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Terrence Rohan

@tmrohan

6 months

Perfect founder response to a VC pass, "Thanks for letting me know! Best of luck to you!" Is it savage or it nice? The ambiguity is 👌💀

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Terrence Rohan

@tmrohan

10 months

Many are attracted to VC until, a few years in, they realize the primary motion is sales.

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Terrence Rohan

@tmrohan

11 months

Top Tier VCs can no longer hire the best to join their firms. Unlike 10-15 years ago, today’s best talent has no desire to join a traditional VC. If they want to invest, they will simply angel invest or raise their own fund.

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Terrence Rohan

@tmrohan

8 months

VC management fees are presented in a misleading way. It’s commonly thought oh 2% on $100M, or $2M. It’s not. A $100M fund with a 2% management fee pays out $2M, annually, for 10 years, so $20M. Or, 20%. We should say the fund has 20% management fees, not 2%

Peter Walker

@PeterJ_Walker

8 months

VC fund management fees from over 1,800 funds using Carta fund admin. 2% is the standard until about $100M AUM, then 2.5% seems to be the consensus. But more distributed at the earliest stages than I expected!

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Terrence Rohan

@tmrohan

11 months

YC is the most successful venture capital firm of the last 15 years. By returns, consistency of returns, number of generational companies funded, and impact, no one else is even close.

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Terrence Rohan

@tmrohan

5 months

Always invest in your friend's companies.

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Terrence Rohan

@tmrohan

8 months

The best seed investments are where you love the founder more than the idea. The worst seed investments are where you love the idea more than the founder.

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Terrence Rohan

@tmrohan

2 years

September is going to be the busiest month for fundraising in 2022.

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Terrence Rohan

@tmrohan

1 year

Today, there is nearly unlimited VC demand for profitable, high growth, capital efficient companies. The rub is that these companies don’t really want VC funding - or at least not at the terms the VCs think is fair.

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Terrence Rohan

@tmrohan

3 years

For years Venture Capital operated on long-standing customs. Certain funds did certain rounds at established prices. Now, market forces are smashing these norms and a new etiquette is being set. 📸

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Terrence Rohan

@tmrohan

6 months

The ideal seed round: Budget for 2-3 years (hiring, infa, etc) Add 25% buffer (optional) Min raise is 2 years Max raise is 3 years plus 25% Anything less will hurt, anything more will also hurt.

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Terrence Rohan

@tmrohan

2 years

Series A have been repriced down, while Seed has not.

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Terrence Rohan

@tmrohan

3 years

A VC saying a simple and respectful ‘No’ creates more future optionality with a Founder than saying nothing.

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Terrence Rohan

@tmrohan

2 months

The magnetic pull of San Francisco for startup founders is at a 10 year high.

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Terrence Rohan

@tmrohan

3 years

Founders will forget what a VC says, but they will never forget how they made them feel.

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Terrence Rohan

@tmrohan

9 months

A new era in startup funding is coming. Founders will couple the growth of select VC with the durability of bootstrapping. Less capital, more self-reliance. It will liberate founders from the VC hamster wheel to build better. Raise Less, Build More:

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Terrence Rohan

@tmrohan

1 year

Raising a Series A does not validate a company. Not needing to raise a Series A validates a company.

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Terrence Rohan

@tmrohan

6 months

The venture market - from Seed to Series C - is firing, most activity I’ve seen for about 18 months.

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Terrence Rohan

@tmrohan

3 years

Raising from founders and angels, with no institutional lead, used to be shunned. Today, these rounds are often a power move.

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Terrence Rohan

@tmrohan

5 months

I've never met a successful founder who was content with the current state of their product.

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Terrence Rohan

@tmrohan

2 years

The hardest raise in all of tech is not raising for a startup. It is a Fund I first close. Not uncommon for new managers to pitch 100’s of LPs, with a low single digit conversion rate. Zero scarcity. Paradoxically, such Fund I’s then systematically outperform Tier 1 funds.

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Terrence Rohan

@tmrohan

5 months

Most angel portfolios outperform most venture funds.

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Terrence Rohan

@tmrohan

5 months

Seed investing is people picking and venture investing is stock picking.

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Terrence Rohan

@tmrohan

4 months

VC is a game of see, pick and win. Seeing is 10x more important than the other two.

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Terrence Rohan

@tmrohan

8 months

Most alpha in VC stems from being in the right place at the right time, and not from smarts. As a result, we over attribute a VC’s intelligence and under attribute circumstance. VC is situational placement, mostly. Investing in a certain period, place, in certain alumni, etc.

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Terrence Rohan

@tmrohan

2 years

Surprisingly few VCs do: 1) take the lead in scheduling 2) run an efficient process 3) treat the founder with respect 4) invest fairly, or, pass transparently 5) send a thank you to who made the intro The best do this, but most do not.

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Terrence Rohan

@tmrohan

2 years

High value Angels now commit $100-200k+. If your lead investor tells you $250-500k is enough for ‘a bunch’ of Angels, its bad advice. $750-1M+ is more realistic. Odds are one of those Angel checks will outpunch of the bigger ones, too (in terms of value add).

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Terrence Rohan

@tmrohan

2 years

Access in VC matters 10x more than picking. Fish from the right pools and you’ll win. Fish from the wrong and you’ll lose. You can miss a lot in VC - you only be really right a once in a while. Fishing from the right pool is easiest way to be really right once in while.

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Terrence Rohan

@tmrohan

3 months

I have yet to meet someone in Silicon Valley with authentic hustle and drive who didn't become successful.

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Terrence Rohan

@tmrohan

10 days

An ETF (Index Fund) of the S&P 500 outperforms 80% of all VC funds, all while being accessible to everyone, and is effectively free of fees.

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Terrence Rohan

@tmrohan

3 years

There are only two viable strategies left in VC, big or small. If you are big, you have to be huge. If you are small, you have to be great. If you are in the middle, you go home.

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Terrence Rohan

@tmrohan

1 year

@tienne_e Agree, the definition has lost value. By there being 1000+ of these companies, Unicorns are not rare anymore. A core component of the concept was rarity. Something like what you outlined probably makes more sense.

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Terrence Rohan

@tmrohan

2 years

The current fear mongering in venture is wrong. It is driven by group psychology; a lot of it is self-serving. Every foundational element needed to build & grow a startup is compounding. In 10 years, these startups will compound to a size & value that we cannot imagine today.

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Terrence Rohan

@tmrohan

2 months

Hierarchy of dealflow: Founder <-> Founder Angel <-> Angel Founder -> VC, Angel Angel -> Founder, VC VC -> Founder, Angel VC <-> VC

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Terrence Rohan

@tmrohan

3 years

Cook Islands are 🤯😍

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Terrence Rohan

@tmrohan

2 years

VCs thinking about a new Scout Fund: Don’t. 1. No alpha: everyone has one 2. They rarely work: unlikely a scout intros an ‘Uber’ at the right time 3. Adverse selection: (a) top founders don’t want to be a ‘scout’ (b) savy CEO’s now avoid scouts on their cap table (signaling)

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Terrence Rohan

@tmrohan

3 years

There should be no preferred and common stock - just stock. Investors shouldn’t get 1x preference over the builders by default. All stock should have the same regulation and rules. Common is more regulated than preferred, penalizing companies - this makes no sense.

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Terrence Rohan

@tmrohan

1 year

The VC industry is bloated. It is least 2X too big in AUM, number of VC funds and VCs.

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Terrence Rohan

@tmrohan

1 year

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Terrence Rohan

@tmrohan

2 years

@rrhoover NY is a huge market now.

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Terrence Rohan

@tmrohan

1 year

AI is a commodity now, just like AWS. If you play the chess board out, an AI product is only valuable, long term, if it buids something unique and defensible (i.e. system of records, network effects). The durable value is only in this second order output, and not in the AI.

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Terrence Rohan

@tmrohan

3 years

The best players in Silicon Valley consistently play positive sum games. This is because SV has a such unique playing field, inc, 🎁 unpredictable players 💰 asymmetric outcomes 🥧 mutual ownership 🏟 changing field This special field makes positive sum dominant. 📷

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Terrence Rohan

@tmrohan

5 months

The brand ranking of VC funds has never been so uncertain.

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Terrence Rohan

@tmrohan

26 days

Silicon Valley first mastered the craft of building technology, then product, then design. It is now learning the craft of brand and brand marketing. As technology markets become more competitive, brand matters more, and those who can build brand are better placed to win.

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Terrence Rohan

@tmrohan

9 months

Many large VC funds are either struggling to raise to target, or are reducing their fund size. This is healthy.

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Terrence Rohan

@tmrohan

14 days

Heard a respected LP today roast GP's pitches. Standard GP pitch, "founder friendly" "value-add" "founders first call" "never lost a deal" / "only lost one deal" "best at pulling syndicates together" "top funds love to follow me" Same story, over and over. 😂☠️

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Terrence Rohan

@tmrohan

5 months

The dominant, winning strategy in Silicon Valley is to be positive sum.

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Terrence Rohan

@tmrohan

2 months

Founders sometimes forget everyone who is on their cap table, but they never forget who wrote them their first check.

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Terrence Rohan

@tmrohan

3 years

The product VCs have sold to LPs, versus what Founders want to buy, does not match.

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Terrence Rohan

@tmrohan

3 years

A group decision is the wrong way to make seed investments.

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Terrence Rohan

@tmrohan

6 months

Multi-stage VC funds now invest in ~1000 Seed deals per year. That's about 20% of all seed deals last year (5,500).

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Terrence Rohan

@tmrohan

3 years

Limiting investors in startups to those who earn more than $200k does more harm than good.

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Terrence Rohan

@tmrohan

1 year

A successful founder in your domain makes a better board member than 99% of VCs.

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Terrence Rohan

@tmrohan

2 years

Traditional VC will increasingly fund a smaller percentage of the most important companies.

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Terrence Rohan

@tmrohan

2 months

All Y Combinator funds start at a ~2-3x mark up. Demo Day doubles (or triples) the value of their funds portfolio. They are truly playing a different game.

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Terrence Rohan

@tmrohan

1 year

This is where a VC board and founder interests come into direct conflict. A VC fund has business model which at odds with modest founder exits. A 5x exit does not matter to a fund. However a 5x exit can matter a lot to a founder and early employees.

immad

@immad

1 year

1/ Early founder who are not already wealthy should probably take early acquisition offers. In my last startup we started in 2009 and could have sold in 2011. Instead we decided to go for a “home run”. Took us another 5 grueling years to get an exit only 2x bigger.

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Terrence Rohan

@tmrohan

2 months

The likelihood of a VC having two incredible decades is the equivalent of a Founder building two unicorns startups.

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Terrence Rohan

@tmrohan

3 months

It's easy for investors to dismiss a seed stage company close to death. This is actually when a startup possesses the most potential alpha. True, the likely case is that they won't survive, unfortunately. But it's also the most likely time for something extraordinary.

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Terrence Rohan

@tmrohan

10 months

The more experienced the founder, the more skeptical they are of venture capital.

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Terrence Rohan

@tmrohan

8 months

Betting on someone early is one of the most rewarding elements of seed investing.

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Terrence Rohan

@tmrohan

4 months

The worst decisions come from when you rationalize your intuition away. The best decisions come from when you trust your intuition, even when it seems irrational.

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Terrence Rohan

@tmrohan

3 years

No, we are not in a tech bubble. When all of VC capital invested couldn’t plausibly return 3x, you can call bubble. In 2020, $164B was invested in VC. Will that be more than $492B (3x) in 10 years? Absolutely. We’re not even close to a bubble.

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Terrence Rohan

@tmrohan

2 years

Raising a seed in today’s market, 1) reduce target by 33% 2) pick a valuation and close Angels (SAFE) 3) in parallel, pitch larger funds 4) update funds w/ new commitments (social proof) You either, (a) get traded up to a bigger round / val or (b) you land safe w/ Angels

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Terrence Rohan

@tmrohan

4 years

@sriramk True. But suspect there are fewer truly global roles than we think. Time zones matter (full asynchronous work, rare). Some in-person matters (trust, management, etc). The office (in varying forms) will come back. Suspect data from 6 months POST-Covid will be the most telling.

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Terrence Rohan

@tmrohan

11 months

Your runway is 9 months shorter than you think. You never want to get to below 3 months before you run out of cash, (-3). The average fundraise takes 6 months, (-6). At that 9 month mark, you should be either: - profitable (default alive) - or, at least doubling revenue (y/y)

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Terrence Rohan

@tmrohan

2 years

Median early-stage valuations (~Series A) have sharply gone from $60M to $140M.

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Terrence Rohan

@tmrohan

5 months

Many want to invest but few want to manage a fund.

anu

@anuatluru

5 months

literally everyone wants to start a business but very few want to run one

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Terrence Rohan

@tmrohan

2 months

Restraint - when a founder has the power to do something, but won't - is one of the strongest markers of success: They could raise, but won't. They could hire, but won't. They could launch another product, but won't. It a blend of discipline, low-ego and long-term thinking.

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Terrence Rohan

@tmrohan

5 months

Two immutable laws of venture capital: 1. In any given year, only a few companies matter; even fewer become generational (“power law of returns”) 2. Those few companies are run are exceptional founders; the better the company, the better the founder (“power law of founders”)

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Terrence Rohan

@tmrohan

6 months

San Francisco in 2023 feels identical to San Francisco in 2013.

Ryan Hoover

@rrhoover

6 months

The memes were right. SF’s energy is infectious rn. Thinking of hosting an impromptu founder popup this afternoon. 🤔

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Terrence Rohan

@tmrohan

9 months

New Seed deals sorted by company HQ, past 12 months. Tech power-law persists to locations, too. There are only two markets, SF & NYC.

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Terrence Rohan

@tmrohan

1 year

Tech's recession has bottomed out. Why? The most predictive measure of a Tech recession is sentiment about the future - is this year going to be better or worse? Optimism is winning again. We go up from here.

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Terrence Rohan

@tmrohan

2 years

The disadvantages of multi-stage VC are now being magnified. If a multi-stage VC fund is not leading/leaning in right now, they are often perceived as orphaned. This is now true Seed to Series E. Signaling is now multi-stage.

Keith Rabois

@rabois

2 years

The advantages of a multi-stage VC firm are now magnified.

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Terrence Rohan

@tmrohan

9 years

We @IndexVentures are doubling down on seed investing with a new "Pre-Venture" approach, read about it here http://t.co/KlitCVJ3O6

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Terrence Rohan

@tmrohan

10 months

The majority of LP capital is allocated for the preservation of wealth and reputation of institutions, and not for wealth creation. This is a subtle yet profound difference. It is why new fund managers can struggle to raise and legacy VC brands can raise with relative ease.

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Terrence Rohan

@tmrohan

10 months

140 Montgomery is the most beautiful office building in SF.

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Terrence Rohan

@tmrohan

28 days

Silicon Valley is a long, repeated game. The market is efficient, particular with information and reputation. Player status and power can fluctuate, especially with new players. Play by the rules, and treat each player with respect - especially the new ones.

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Terrence Rohan

@tmrohan

2 years

@jaltma This is actually close to the Spanish conception of time. It is culturally bounded by the energy of the activity, not by the clock. Some activities go very long, others, short. Obviously when you coordinate based on energy it is a mess (to those who coordinate by clocks).

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