Capital. Venture-capital. Irrationality, Welcome Back to Silicon Valley: Tech News « Wow, finally people noticed. All it took was Google to supposedly offer $3.5 million to an engineer to not go to Facebook. Now, that is what rational people would call cutting off the nose to spite the face. But these are not rational times. I have been writing about the escalating irrationality in Silicon Valley, which for some odd reason exists detached from the global economic reality. In past few months, I wrote about three major and potentially troubling signs. Silicon Valley & the Scent of Money talked about the increased number of startups getting funded and the amount of money being pumped into the startups going up, thanks to hyperactive, always tweeting, angel investors.Silicon Valley’s Talent Crunch talked about how there was a decline in certain kind of engineering talent and other professionals in the valley, thanks to the breathless hiring from giants like Zynga, Google, Apple, Facebook and Twitter.The media’s focus on investors and not the founders.
Let me explain. 10 Ways To Be Your Own Boss. Know When to Walk Away - Entrepreneur.com. Don't ask venture capitalists for referrals if they say they're not interested. As a venture capitalist, I receive a steady stream of e-mail from entrepreneurs looking for funding for their businesses. I'm happy to receive these e-mails and try to respond to all of them. When they ask for advice, I try to quickly point them to something I've written or give a focused answer. When it's about a potential new investment, I determine quickly whether I'm interested. If I am, I ask for more info and engage more deeply. In some cases, I never hear from the person again. However, I've noticed one thing that happens about 25 percent of the time: The person I have politely declined asks me for a referral.
Having experienced this many times during the past decade, I have come to realize this is a bad implementation of Networking 101. It's even more dramatic when you are approaching a potential investor. By asking for a referral from investors who aren't interested, you are doing two things. The Hottest VC No One Has Ever Heard Of - robgo.org.
The Hottest VC No One Has Ever Heard Of February 7, 2010 What do Admob, CafePress, Aardvark, Polyvore, and Xoopit have in common? If you said that they were all backed by great VC’s like Sequoia, August, Benchmark, and Accel, you would be correct. But did you know that they are also all backed by the same seed stage investor as well? What these companies all have in common is that they are all portfolio companies of Harrison Metal Capital. What these firms all have in common is a fund strategy and size that is both different from and complimentary to traditional VC’s. “Smaller up-front investments create a greater range of exit strategies where everyone wins. It should be noted that most of these fund aren’t shooting for mid-sized wins. I think these firms are excellent investments (looking from an LP perspective).
As an investor at Spark, which currently invests out of a $360M fund, I am very excited about these guys. Author robchogo | Filed under regular. Venture Innovation, or why the First Round Capital Entrepreneur's Exchange fund is good. There is an amazing wealth of innovation around early stage venture financing, most of which developed in just the past few years.
There are new models of creating companies out of innovation: Seed Camp, Y Combinator, Tech Stars are just three, all with different foci and core strengths. Then there are new sources of financing - groups or people that literally didn't exist as early stage financiers just a few years ago: O'Reilly AlphaTech Ventures, True Ventures, Jeff Clavier, First Round, Ron Conway & Co., Roger Ehrenberg, Chris Sacca, Dave McClure, TAG/Saul and Robin Klein etc. I call these "quasi institutions" because while in some cases they are or have traditional ventures partnerships, they act very entrepreneurially - they move fast, they move often, they are heavily collaborative, they focus on the seed, they are very active, they have alot of fun. In many cases they are run by operational entrepreneurs themselves. . (1) Removes some entrepreneurial stress. In short, innovative. The problem with taking seed money from big VCs.
Google seems to be releasing or acquiring new products almost daily. It’s one thing for a couple of programmers to hack together a side project. It’s another thing for Google to put gobs of time and money behind it. The best way to predict how committed Google will be to a given project is to figure out whether it is “strategic” or not. Google makes 99% of their revenue selling text ads for things like airplane tickets, dvd players, and malpractice lawyers. A project is strategic for Google if it affects what sits between the person clicking on an ad and the company paying for the ad.
Human - device – OS – browser – bandwidth – websites - ads – ad tech – relationship to advertiser – $$$ At each layer, Google either wants to dominate it or commoditize it. Device: Desktop hardware already commoditized. OS: Not commoditized, and dominated by archenemy (Microsoft)!! Browser: Not commoditized, and dominated by arch enemy! This doesn’t mean Google will always act strategically. Video: Fred Wilson Talks To Google About Disruption. Venture Capitalist (Union Square Ventures) and blogger Fred Wilson gave a talk a few days ago at Google’s headquarters in Mountain View. The key point of his talk was about disruption — what companies are doing out there to change the technology space.
Nothing Earth-shatteringly new, but interesting insights from a smart guy. Y Combinator Demo Day: Simple cloud management, real-time energy monitoring, and more » VentureBeat. If anyone’s feeling depressed about the future of Silicon Valley innovation, I’d suggest sneaking into the demo day tomorrow at incubator Y Combinator‘s Mountain View, Calif. office. Watching a bunch of smart, ambitious entrepreneurs show off what they’re working on is a good cure for the “nothing cool is happening” blues — and I saw a strong batch of startups at today’s event. (The same presentations repeat tomorrow.) For the most part, there weren’t many “wow” moments or big conceptual breakthroughs, but I saw some cool ideas, promising products, and plausible business plans.
Virtually all of the companies were web startups, but relatively few of them seemed like “me too” ideas. And even when they were, their boast that they were “like Famous Product X, but done right” actually held some water. 1. 2. 3. 4. thesixtyone — A site that uses a Digg-like interface to let users find, listen to, and vote for their favorites among songs uploaded by independent musicians. 5. The Venture Capital Squeeze. November 2005 In the next few years, venture capital funds will find themselves squeezed from four directions.
They're already stuck with a seller's market, because of the huge amounts they raised at the end of the Bubble and still haven't invested. This by itself is not the end of the world. In fact, it's just a more extreme version of the norm in the VC business: too much money chasing too few deals. Unfortunately, those few deals now want less and less money, because it's getting so cheap to start a startup. When we started our startup in 1995, the first three were our biggest expenses. Now you could get all three for nothing. And of course another big change for the average startup is that programming languages have improved-- or rather, the median language has. During the Bubble, a lot of people predicted that startups would outsource their development to India. Into this already bad situation comes the third problem: Sarbanes-Oxley.
The Solution(s) This is a dumb plan. Frugal Is As Frugal Does | infoChachkie. Richard White, author of The Entrepreneur’s Manual, surveyed a number of venture capitalists, asking them to identify the characteristics of successful, serial entrepreneurs. One of the attributes identified by all of the venture capitalists questioned was, “Frugal use of capital”. In fact, several of the venture capitalists pointed out that successful entrepreneurs often have to be encouraged and pushed to spend more aggressively. Successful, serial entrepreneurs on The Fringe instill an urgent sense of frugality into their adVenture’s corporate culture. “Bah humbug” you say?
Mayday Mayday The most prevalent cause of private aviation accidents is running out of fuel. Cash is the fuel in your corporate gas tank. Living Below Your Means Frugality was missing-in-action at many bubble-era Dot Bomb companies. In fact, in 2000, I helped raise $30 million at an $80 million pre-money valuation – for a startup with absolutely zero revenue. Enter Liquidator Larry Case in point. Be like Bill. Venture Hacks — Lean startups find their moment.
Nivi · October 21st, 2008 “As an investor and board member, it’s comforting for me to see a team using lean development. It gives me transparency on product development and engineering. I even see it reflected in the way the company manages its business objectives and goals.” – Scott Raney, Redpoint Ventures Summary: “Lean” is the most capital-efficient way to run a business. Every entrepreneur must learn how to run a lean startup (some people say agile instead of lean — same thing). If you’re not lean, getting lean is probably the most effective thing you can do for your business. Q. Lean startups eliminate waste: they eliminate every activity that is not necessary for creating customer value. In Toyota Production System , Taiichi Ohno (the father of lean) says, “All we are doing is looking at the timeline… from the moment the customer gives us an order to the point that we collect the cash. Toyota created lean and used it to grow from a small company to the world’s largest automaker.
Q. Garage Technology Ventures. Facebook Launches fbFund with Accel and Founders Fund to Invest in New Facebook Apps.