Today I came across a blog post by Steve Barsh in which he posted his slide deck from a talk he’s gave in SF recently.

Flipping through the deck, I came across one of the most straightforward and insightful presentations of the numbers that a VC is basing investment decisions on, often called “magic ratios.”

If you are trying to raise $2 mil from a VC at a $5 mil valuation, you will need to be able to show a path to a $100 mil exit in 5 yrs to show a 10x return assuming 50% dilution through future rounds.

The implication of this is very clear.  It’s easy to talk about raising $2 mil, but you need to be focused on whether there is an exit for your company at $100 mil, and how you are going to get there.  That’s what your VC is thinking about.

Check out slide 4 of the slide deck embedded below.  Thanks for the insight & clarity Steve.

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Looking for office space?  Want to work in a creative environment with other startups?

Voodoo Ventures lives in a bright, airy office space on the third floor of a historic brick building at the corner of St. Charles & Julia.  We’ve been here for a year now, and we’re ready to share our turf.  Our vision is a shared, creative work environment for several 1 or 2 person startups all benefiting from each others’ expertise.  A startup lab with shared resources and a lot of energy and fun.

We’ve got two offices pods available.  You get a private office all your own with a door you can close.  The available pods are:

• Julia St. Facing - 12′ x 15′ rented!
  
• St. Charles Facing - 12′ x 12′ rented!
  

And we all share the following:

• Reception area & kitchen
• Conference area with whiteboard & 42″ plasma monitor
• Wireless internet & shared land-line (or you can install your own)
• Laser printer, color printer & fax
• Outdoor deck for lunch & Mardi Gras

Wanna see what it looks like? Here are some pics and a video:

Each pod is available on a month-to-month lease for $600.

We’re looking for the right startups to fit the group enviroment so please email all your relevant info to cschultz@voodooventures.com.

I just got back from visiting my partners in Flatsourcing in Kazan, Russia. This was my third trip to Kazan, and by far the most exciting. This stems from both the growth we are experiencing with Flatsourcing, but even more importantly the changes that are taking place right before my eyes in the city.

On arrival in Kazan, one of the first things you notice is that the whole city is under construction. Since last year a major road repair program has taken place and pot-hole lines streets have been replaced with paved, widened highways. Soviet-era block houses are being replaced by new apartment buildings. I was fortunate enough to stay in a new apartment that Oleg’s family has purchased. In the last three years mortgages have become commonplace in Russia, and cars and apartments are fast becoming part of the middle-class lifestyle. Speaking of cars, as we drove to work each morning, we passed dealerships for Honda, Toyota, and Hyundai as well as Mercedes and BMW. Word is that the Chinese auto manufacturers will be invading next year. They already have their fleets on the road in the form of big beautiful city busses. Just last year the city bus fleet was ragged, its been upgraded by Chinese manufacturers like Golden Dragon.

Shopping malls are all over the place. Kazan actually has more shopping malls per capita than Paris. We ate lunch at a shopping mall food court at a Russian fast food chain ironically named CCCP (translated as USSR). I asked the guys if this was offensive or threatening to anyone. Nope, they said, they Soviet era has been relegated to nostalgia by modern capitalism that is fueling the country’s growth. CCCP now is simply a fast food joint serving the world’s biggest brand, Coca-Cola.

You can’t help but notice how IT oriented the city is. One of the things I trumpet about Kazan is that there are more than 20 universities, most of them technical. This is a university town graduating the next generation of computer programmers annually. Kazan, and Russia as a whole has a culture of IT. The coolest job you can have is a computer programmer. Being high tech opens the doors of opportunity, including working at Google in St. Petersburg, or eventually working in the US if you are good enough.

Billboards around the city advertise HP desktops and laptops. The government has just invested in a beautiful IT startup “IDEA Park” to provide office space to startups complete with furnished desks and computers. The rent is discounted 50% for winners of an annual business plan competition.

Two years ago Fujitsu moved an entire office from the UK to Kazan through a partnership with a Russian based IT company, ICL. Since then, IBM has moved in and is partnering with Kazan State University and there were rumors when I was there that Microsoft is next and that top talent is starting to be recruited by Microsoft.

I can’t wait to see what Kazan looks like next year. One thing is for sure, the Flatsourcing office will have quadrupled in size and we’ll be hiring more!

Finally, the hottest gadget in Russia by far is the iPhone. I brought three of them over for Oleg, Alex, and Timur and they were promptly unlocked and filled with some of the most amazing software that we’ll learn about over here in the near future. I ended up leaving my personal one behind as well. Even though carriers don’t sell them yet, and they go for upwards of $800 on the black market, our last night there we were surprised to see the women at the two tables on either side of us to be taking pictures of each other with their iPhones. An apt metaphor for falling borders in this ever-flattening world!