Sunday, 16 December 2012

Anti-portfolio

If you had been offered shares in Ebay, Apple, Google, PayPal and a slew of other companies, and you would have rejected those deals, and the price of these shares would have surged beyond believe, would you dare to publish that, for all to see?

If you had been offered shares in FedEx, not once, not twice but seven times, and rejected the deal every single time, would you write about that?

It is very rare in the financial world to actually do that, but Venture Capital (VC) fund Bessemer Venture Partners is the exception to the rule, and does publish these facts on their website in their "anti-portfolio". Some examples:


BVP's Felda Hardymon was offered a small position in the company's last private round, and waved it away: too small a position, he thought, at too high a price. In less than a year it was worth 17x.

BVP had the opportunity to invest in pre-IPO secondary stock in Apple at a $60M valuation. BVP's Neill Brownstein called it "outrageously expensive."

Stamps? Coins? Comic books? You've GOT to be kidding," thought Cowan. "No-brainer pass."



Cowan’s college friend rented her garage to Sergey and Larry for their first year. In 1999 and 2000 she tried to introduce Cowan to “these two really smart Stanford students writing a search engine”. Students? A new search engine? In the most important moment ever for Bessemer’s anti-portfolio, Cowan asked her, “How can I get out of this house without going anywhere near your garage?”


BVP has an excellent reputation as a VC fund, has hit many homeruns in their portfolio, of which more than 100 companies IPO-ed. Some of their better known ones are: Skype, LinkedIn, Yelp, Pinterest, VeriSign. Still, its openness about the opportunities that they did not invest in is rather remarkable. Hopefully more fund managers will follow this example.

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