Most venture capitalists never say “no” outright. However, none ever say “yes" outright either. The reason for this is that the longer a venture capitalist can delay having to invest, the less risky is their investment. In fact, every day that they can delay cutting a check is another day that you the entrepreneur are building, acquiring customers and refining your business model.
So what can an entrepreneur do?
Unfortunately, entrepreneurs do not have much leverage with venture folk, except for the threat of a missed opportunity. Therefore once you can get one group to commit, the fun begins. As soon as ...
What’s a startup to do?!!?
Entrepreneurs live in a new age where the lowered costs for development and marketing (theoretically) mean that a company can be launched without having to take traditional venture capital financing.
For entrepreneurs this seems great because they can keep more of the company, rather than needing to sacrifice a big hunk of equity in exchange for a million bucks. However, this also means that many startups have begun to play dangerous games. In particular, many a young startup is seeking an angel(s) to provide a seed round, more akin to a bridge loan, that will see them ...
Here's some wisdom and accompanying thought I’ve put together for those who aspire to one day be a venture capitalist. Fear not - it's relevant to most all other fields as well :)
Start Your Own Business. If I was a VC firm looking to hire, I wouldn’t consider anyone who had not started their own company…unless I just needed a research geek. Especially now that the barriers to entry are so low for entrepreneurs, I would have serious doubts about hiring someone incapable of 1) starting their own company and 2) generating income when the job description is essentially evaluating ...
I have noted that a new trend among VC firms seems to be an annual, or bi-annual gathering of their portfolio companies. I think this is an exceptional practice, and as an entrepreneur, the first VCs I would approach for money are the ones supporting these types of interactions. It’s a clear indication that being ‘part of that particular family’ means access to connections and learning experiences.
Such gatherings are all the more important when you consider a finding from a recent study featured in Time Magazine and on Mind Hacks (one of my favorite blogs!). Turns out experience isn’t all ...
I just came across an event taking place tomorrow called VC Outlook 2008. From the website:
"Join leading Corporate VCs, Investment Bankers, Venture Capitalists, Angel Investors, and chief executives of emerging companies at New York’s annual VC Outlook ...
A week or so ago on Techcrunch I came across this post:
It got me thinking to another variation of a hybrid VC model that could be used. A VC could conceivably invest in “good scouts” who could scour the trenches for really promising upstart technologies. A VC could then get in early enough to buyout the technology at a great price and swap out the team with a pre-assembled all-star team.
This all-star team and product would then be owned entirely by the VC firm (or with some equity split) could then see the company through to a major buyout. The ...
I was at an event tonight where an interesting topic came up. Someone in the audience asked a panel of New York City based, early stage-ish venture capital partners “why they didn’t invest in web 2.0 companies?” The gentleman asking the question specifically cited Union Square Ventures, who was not represented on the panel. USV came up several more time in other questions, making it clear that was the firm the audience knew.
The unanimous response among the VCs (clearly annoyed) was that they “did invest in such companies, but we that we didn’t know about it because they prefer ...
Matt Winn has been writing some great posts recently. Today he posed the question of whether or not venture capital (i.e. early stage investments) was likely to see the see the massive growth that has characterized private equity in recent years.
In his post, Matt draws attention to the recent debate over startups as "commodities." Matt considers whether, with the barriers to entry falling, opportunities for VCs will diminish.
If it does, it's the VCs fault. Here’s why.
A good VC knows an AMAZING idea when they hear it. Amazing ideas are distinguished from GOOD ideas, and there are infinite amounts ...
I recently got my hands on a database of New York City venture capitalists and was able to run some numbers. Altogether the list represented 29 firms and 259 VC’s. Despite opinions to the contrary – at least in New York – it certainly helps to have an MBA and in particular, have attended Harvard Business School…how east coast :)
Some Stats:
Only 9.6% of NY- based VCs are women
Of the 250 who had listed their undergraduate alma maters 41% attended an Ivy League school
140 (56%) hold MBA degrees
Of the MBA’s, exactly 50% went to Harvard Business ...