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Valuations and Sources of Volatility: Part 4 – Early IPOs

By: | May 18, 2015 | No Comments

Some of our portfolio companies are seeking to access the public markets for growth capital rather than relying on further rounds within the private markets. This trend introduces another source of volatility to our values since once a company is publicly traded, its valuation is often based on the closing price as of the date of valuation. This closing price can fluctuate significantly from quarter to quarter, making our valuations based on the closing price volatile.


Valuations and Sources of Volatility: Part 3 – Public Market Comparables

By: | April 13, 2015 | No Comments

This is the third post in our series discussing new sources of volatility in our valuations. In this post, we want to discuss how more of our companies are reaching a state of maturity where it is appropriate to calculate the value of the company based on a multiple to revenues. This valuation approach introduces another source of volatility to our values since these multiples are commonly derived from sets of publicly traded comparable companies.


Valuations and Sources of Volatility: Part 2 – Option Pricing Models

By: | March 19, 2015 | No Comments

This is the second post in our series discussing new sources of volatility in our valuations. In this post, we want to discuss option-pricing models, how their inclusion in our valuation process introduces new sources of volatility and the impact the terms of new rounds of financing have within these models, particularly liquidation preferences.


Valuations and Sources of Volatility: Part 1

By: | March 17, 2015 | No Comments

As a publicly traded company, we are required to value our portfolio of investments on a quarterly basis. We believe this level of frequency provides well-deserved transparency to our current and prospective shareholders. Recently, there have been some new sources of volatility in our values than existed in prior quarters, so we thought it might be helpful to discuss these sources of this volatility and provide some general background regarding the process for valuing privately held securities in a series of blog posts.


ORIG3N: Early Stage Company Building Early Revenue

By: | March 10, 2015 | No Comments

Early stage investing is not just about money – at this stage, we also put a lot of “sweat equity” into our portfolio companies. However, ORIG3N is the first to ask for our blood. They recently came by our office to take small samples of our blood to help build a biobank of stem cells for use in research and possible future medical treatments.

Through its Life Capsule program, ORIG3N is a fantastic example of how an early stage technology company can build its business, get its technology into broader use quickly, and create an early revenue stream.


How America Can Save the Smaller IPO

By: | February 24, 2015 | No Comments

In my last post, which grew out of my keynote conversation at the 2014 SNS Predictions Dinner, I touched on the sea-change that has occurred in the IPO market since the year 2000, where the smaller IPO of, say Intel in 1971, has given way to the mega IPOs of Google and Uber.


Why We Need to Go Back to the Small IPO

By: | February 17, 2015 | No Comments

When Intel went public in 1971, it wasn’t the behemoth that it is today. It was a tiny little company raising a very little bit of money in a public offering. Same with Amgen, or Genentech. Today they’re monster companies, built over 30- to 40-year time periods, but their initial public offerings (IPOs) were relatively small.


Technologies that Will Drive Innovation and Investing in 2015

By: | October 14, 2014 | No Comments

At Harris and Harris Group (H&H), a considerable amount of our time focuses on tracking the latest science and promising new technologies. To improve our chances of succeeding in early stage investing, we regularly meet and discuss new scientific discoveries that have been announced, with an eye to identifying investment opportunities that will mature over the next three to seven years.


Why BIOLOGY+ Offers a Fertile Field for Early Stage Investing

By: | October 8, 2014 | No Comments

Many of the “big problems” we face in this world — hunger, water, energy, health, climate change — are complex ones that are not going to be solved by any one discipline or industry alone. Solutions to such problems require an integrated and interdisciplinary approach.


The Death of the Hypothesis, or, Investing in Big Data Analytics and Deep Learning

By: | September 23, 2014 | No Comments

Over the last 24 months, I have been observing a profound shift in how we learn about the world. Barely noticeable at first, the newborn techniques are now roaring with multiple success cases and a promise to accelerate the pace of discovery dramatically.