Innovation Toronto » VCs

What Do Venture Capitalists Know?

ron — Thu, 20 Dec 2007 16:07:09 +0000

The National Venture Capital Association surveyed 170 of its members, and this is their collective wisdom for 2008:

The sectors VCs are most bullish about are Clean Tech, Media, Biotech, and the Internet, in that order:

Founders Fund Closes $220 Million Second Fund

ron — Wed, 19 Dec 2007 17:45:47 +0000

“Sean Parker said today in a phone interview that a glut in venture capital, combined with reduced capital needs of most startups, has led to a shift in balance of power between entrepreneurs and VCs. Founders Fund recognizes that shift and has evolved does deals a little differently because of it. For example, they invented and promote the issuance of a special class of stock, called Series FF, which allows entrepreneurs to take money off the table much earlier in their company’s lifecycle. They also allow significantly more liberal voting rights to founder board members than many other funds.”

The Twice Shy Entrepreneur

ron — Sun, 09 Dec 2007 18:26:12 +0000

Silicon Valley these days is made up of two kinds of entrepreneurs (I’m painting with broad strokes, bear with me). The first group is the old guard. These are people who started companies during the late nineties and up until the 2000 stock market crash. The second group was either in school during that period, or doing something other that working in the tech world, and have started companies after the fallout from the crash.

Generally speaking, experience counts for something. So you’d expect entrepreneurs who’ve been through the ups and downs of a tech startup to have an advantage over the newcomers. Or at least have an equal chance at success. But in fact the opposite may be true. A number of venture capitalists I’ve spoken with have said that too many “old guard” entrepreneurs are not being bold enough in their business decisions, and it’s hurting their startups.

The first VC to bring this up to me was CRV’s Saar Gur at a recent conference. Since then I’ve brought it up with a number of other VCs. Across the board they agree - many entrepreneurs from the first bubble are overly cautious, and hurting their businesses.