The article down is from Mr David Cowan a VC from menlo park California....
This just in from my partner and Harvard Business School Professor Felda Hardymon...
This test only has one question, but it's a very important one. By giving an honest answer, you will discover where you stand morally. The test features an unlikely, completely fictional situation in which you will have to make a decision. Remember that your answer needs to be honest, yet spontaneous. Please scroll down slowly and give due consideration to each line...
You are in Florida, Miami to be specific. There is chaos all around you caused by a hurricane with severe flooding. This is a flood of biblical proportions. You are a photojournalist working for a major newspaper, and you're caught in the middle of this epic disaster, The situation is nearly hopeless. You're trying to shoot career-making photos. There are houses and people swirling around you, some disappearing under the water. Nature is unleashing all of its destructive fury. Suddenly you see a man floundering in the water. He is fighting for his life, trying not to be taken down with the debris. You move closer . . . somehow the man looks familiar. You suddenly realize who it is. It's George W. Bush! At the same time you notice that the raging waters are about to take him under...forever. You have two options--you can save the life of G.W. Bush or you can shoot a dramatic Pulitzer Prize winning photo, documenting the death of one of the world's most powerful men. So here's the question, and please give an honest answer: Would you select high contrast color film, or would you go with the classic simplicity of black and white?
Tuesday, July 26, 2005
The article down is from Mr David Cowan a VC from menlo park California....
Posted by Vijaychandran Veerachandran at 8:11 AM
This link from Mr Brad Feld is really great.
Work life Balance Yeah a very very important thing to be considered. May be I can put in this way. I know that my father he works hard when he does. But I always prefer to call him as a lazy guy. Some times even I asks him how did u get all this time always go for nomadic trips across North India for 15 to 20 days and some foreign land trips once in a year and all.Thats ok I can understand but he always finds time for hanging out with friends attending marriages traveling 200 miles and taking days off.
This one incident was really eye opening for me. I asked him one day. " Abba why are you taking this many vacations in a month, How did you find all this time rather than working on your business" His answer was some thing like this. " Yes , I did take off . I am doing it for you and family. Its not always business I want to spend time with you and this is my satisfaction " There is always a balance "
I just couldn't understand any thing at that point but when I am here in this far and distant world.I appreciate every second he spends with me .I am more happy this is incidental than accidental. Nothing can be compensated for those moments ..
Posted by Vijaychandran Veerachandran at 7:35 AM
Wednesday, July 20, 2005
The below article is from Mr Fred Wilson A VC blog. His blog is the most respected in its category ... Please feel free to go through his blog..
you can read similar articles in the link above....or summary below.
Private Equity - The Job of Choice?
It used to be that the ultimate career goal was the CEO job at a Fortune 100 company.
But these days, it seems that people are leaving those jobs aside and heading to private equity instead.
In the past week, I've read three stories that made this realization hit home
1 - Colin Powell, former Secretary of State and Chairman of the Joint Cheif of Staff of the US Military joins Kleiner Perkins as a special limited partner.
2 - Sandy Weill, former Chairman and CEO, of Citibank wants to leave Citi early to start a buyout firm.
3 - John Joyce, head of IBM's Services Group, which represents over half of IBM's revenues, gets off the CEO track to join Silver Lake Partners, a technology buyout firm.
It seems that private equity and venture capital is the career of choice these days.
I really agrrew with his artcile. My own icon Mr Vivek paul.. The CEO and CTO of Wipro the richest software company in India my Azim Premji ( Worlds no 7 Rich guy)..
He resigned form the job to join some venture Capitalist job...
Posted by Vijaychandran Veerachandran at 12:21 PM
It’s time for me to write about something that has been bothering me for a long time and I have yet to address. I get sick and tired about hearing about any one subject over and over again without end. Moreover I get sick and tired of people obsessing over that subject and assuming because I do not there is something wrong with me. I don’t think people who aren’t Met fans are crazy, or that people who don’t vote Republican are somehow evil (yet almost defiantly misguided).
Yet every time I tell someone I haven’t read one word of Harry Potter I get a look like I was the second gunman on the grassy null. I am a fan of science fiction and of fantasy in general, but yet cannot find myself the slightest bit interested in this new cult known as Harry Potter. It may be that I am use to going against the grain of society, and therefore I cannot see myself follow the pack and reading something that the entire world is fixated on. But more importantly I see it as an act of not follow the pack of lemmings off the cliff...
Posted by Vijaychandran Veerachandran at 7:38 AM
Tuesday, July 19, 2005
Vivek Paul. The great lesson from leader...
This is awesome. I really like it the way he said. He stepped in to venture capitalism in a boston firm after being the CEO of wipro..
When asked why he said these words
"But it was his encounter with an elephant outside of Bangalore more than a dozen years ago that crystallized this philosophy.
Paul was curious why an elephant tied to a small stake in the ground did not yank it up and be on its way. The animal's handler explained that baby elephants tied to similar stakes learn they can't break free. As elephants grow older and stronger, they don't test the stake again--thereby remaining trapped by what should be an obsolete restraint.
"I said, 'By gosh! That's probably relevant to people as well "...
Hope u understand what he said
Posted by Vijaychandran Veerachandran at 1:47 PM
Friday, July 15, 2005
6 soft skills for every hard-nosed professional
Behavioural training experts say there are several soft skills are required in these circumstances. Some of them include:
i. Interpersonal skills
ii. Team spirit
iii. Social grace
iv. Business etiquette
v. Negotiation skills
vi. Behavioural traits such as attitude, motivation and time management
Posted by Vijaychandran Veerachandran at 10:01 AM
VC Cliche of the Week
By Fred on Venture Capital and Technology
Most entrepreneurs are smart, many are very smart.
But one of the things that entrepreneurs need to watch out for is being too smart for their own good.
We call that "too clever by half".
It's a cliche I've used and heard used for as long as I've been investing, but I honestly have no idea where it comes from.
I did a little work on the web, and the best I could come up with was this. I suspect the origin of this cliche is british, but beyond that, I have no clue where it comes from.
Whatever the origin, its a good phrase.
I remember one of my earliest investments. The entrepreneur was really smart but whenever he had a deal to work on, he'd always try to optimize it way beyond what was necessary. He'd get too cute and in the end all the complexity worked against getting the deal done.
I recall another deal early in my career where the entrepreneur had a company interested in buying his business. It was a good deal. But he tried to carve out a part of the busines that he thought the buyer wasn't interested in. The buyer didn't really want that part of the business but they thought the entrepreneur was trying to pull a fast one on them and the mistrust that developed killed the deal in the end.
The phrase "keep it simple stupid" is really great advice for anyone who is really smart and prone to overcomplicate and overanalyze things.
The tendency to overcomplicate things often shows up in business plans, business models, product plans, and the products themselves. And things that seem really interesting and attractive on paper often don't end up being very attractive in real life.
I have come to believe that the act of reducing something to its essential elements and focusing laserlike on them is the best thing an entrepreneur can do.
Because being "too clever by half" is often the kiss of death for a business
Posted by Vijaychandran Veerachandran at 6:11 AM
Thursday, July 14, 2005
Google balances privacy, reach
Published: July 14, 2005, 4:00 AM PDT
By Elinor Mills
Staff Writer, CNET News.com
TrackBack Print E-mail TalkBack
Google CEO Eric Schmidt doesn't reveal much about himself on his home page.
But spending 30 minutes on the Google search engine lets one discover that Schmidt, 50, was worth an estimated $1.5 billion last year. Earlier this year, he pulled in almost $90 million from sales of Google stock and made at least another $50 million selling shares in the past two months as the stock leaped to more than $300 a share.
He and his wife Wendy live in the affluent town of Atherton, Calif., where, at a $10,000-a-plate political fund-raiser five years ago, presidential candidate Al Gore and his wife Tipper danced as Elton John belted out "Bennie and the Jets."
Schmidt has also roamed the desert at the Burning Man art festival in Nevada, and is an avid amateur pilot.
That such detailed personal information is so readily available on public Web sites makes most people uncomfortable. But it's nothing compared with the information Google collects and doesn't make public.
Posted by Vijaychandran Veerachandran at 12:46 PM
Although I'm going to write about 10 Commandments, there are really 13, the first three of which are, sort of, "Uber Commandments": (1) have a great technology idea, (2) have a great team and (3) pick a huge market in the midst of a major transition. That's the hard part -- and it's where advice from a VC can't really help you. But the next 10 Commandments are things you can control, more or less, and you should take advantage of this whenever possible
Commandment No. 01:
Whenever you're approaching a VC firm for funding, it's always optimal (surprise!) to connect with the partner in the firm who has the closest investment interest to the space your startup is going after. As busy as most good VC's are, it's usually hard to stop what one is doing and take time to come up to speed on a new market unless one is making a calculated shift in one's area of investment interest (which does happen --- over time).
No matter how hard you try as partner in a VC firm (and I have to say that, at Mayfield, I’m pleased at how hard we try), it’s difficult to be as interested in a deal passed along to you by a partner as you are in one that comes in directly through your network. A number of reasons, but it mostly comes down to the fact that most good VC's are pretty busy and – for a referred deal -- you don’t have the same “context” as you do for a deal that comes to you directly from someone you know.
Not to say that good things don’t happen. At Mayfield and some other firms, the partners do pretty readily pass around deals that seem more appropriate to the interests and backgrounds of other partners. For example, at Mayfield, we have done two deals this year that came in initially through me but ended up being “done” by other partners (who, BTW, are better suited for the companies than I would have been).
Despite the above advice, however, there is a caveat: it's definitely better to get a good personal introduction to any partner in a particular firm than to it is to merely approach the “right” partner out of the blue. For a whole variety of reasons, VC firms almost never seriously consider deals that come in “over the transom”.
So, whenever possible, do your homework on the partners in a particular firm, and try to get a personal introduction to the one whose background and investing interests seem to best fit your company. From an informational perspective, this is usually not hard to do. Most VC firms have good descriptions of their partners’ backgrounds and interests on their web sites, and you can also tell a lot about what a partner is interested in by looking at the deals they’ve done.
Posted by Vijaychandran Veerachandran at 1:40 AM
Commandment #2: Be On Time
So this really seems like a platitude, doesn’t it? Something your mother would have told you if she knew you were pitching an idea to the venture community….And, of course, seven or eight times out of ten, it’s not an issue. But every so often timeliness (or lack thereof) becomes very important. Here’s why you always want to be early to a meeting with a VC (even though 95 times out of 100 they’ll keep you waiting). I call it the problem of the HARD STOP.
Arriving early at the VC’s office avoids two main problems, both ultimately having to do with the fact that VC’s often over-book meetings (given everything else they have to do during the work day) and often have a HARD STOP after an hour or so (and are often, themselves, the cause of a late start – more on that below).
First, believe it or not, the presentation technology provided by the VC doesn’t always work (shocking!). Sometimes it’s the fault of their projector, sometimes it’s a glitch in the laptop the entrepreneur brings, and sometimes it’s just gremlins, or the failure to have made a large sacrifice to the Presentation Gods prior to the meeting. In any event, if this happens you want to have plenty of time to fix the situation. No matter what anyone thinks, it certainly doesn’t make one look good if the presentation isn’t working (no matter what the cause). VC’s (who consider themselves very important) hate to sit around waiting.
Second, VC’s, themselves, are often late to your presentation. Since this doesn’t alter the HARD STOP, if you are not ready to go as soon as the VC walks in the room, you run the risk of having an even more hurried, pressured presentation – which is not the way to show your best stuff.
So arrive early if you want to give yourself the optimal chance to do well. Don’t worry, this means that you’ll often spend 10 – 15 minutes ready and rarin’ to go, while waiting for the VC to get off the phone. Unfortunately, that’s life, and life’s not fair -- but maximize your chances of success: show up early.
Posted by Vijaychandran Veerachandran at 1:39 AM
Commandment #3: Tease, Don't Overwhelm
First he tells us to "Be on Time" (Commandment #9)....now, he advises: "Tease, Don't Overwhelm"...What the hell does this mean, readers (if any) will be tempted to ask.....But stay with me for a minute. There’s a subtlety here that might help you.
The goal of your first meeting with a VC IS NOT to get a funding commitment. The goal of your first meeting IS to get a second meeting. On extremely rare occasions, funding commitments are made in the first meeting, but only in very unusual circumstances: e.g., where the entrepreneur has worked (successfully) with the VC firm before, or where the proposing partner in the VC firm has been working with the entrepreneurs in the development of the startup idea, etc., etc. In the vast majority of cases, I’d guess that the average number of meetings a startup has with the VC firm that eventually funds it ranges between 3-7 (but curious to know from any entrepreneur readers if their experience is, or data are, different).
So, what does this mean? Here are a couple of thoughts:
Don’t try to cram six or seven meetings’ worth of information into one meeting. Pique their curiosity, don’t pulverize their attention span. More on this in the next few “Commandments”, but think of the initial meeting as a way to say: “I’ve got a very cool business idea that you should want to know more about.” – that is, almost more of a “teaser” than an overwhelming deluge of information.
That said, absolutely do make sure you obey the three “Uber Commandments” (see my post on Commandment #1) and tell why: (1) you have a great technology idea, (2) being implemented by a great team, and (3) attacking a huge market in the midst of a transition.
This is probably overkill (and I’m sure goes without saying), but just in case…..this is NOT to advise entrepreneurs to “hide the ball” in any way in the initial meeting. If you want to “succeed” (remember: success in the first meeting is getting the second meeting), you absolutely need to do something that’s really hard: crisply and clearly reduce a complex business message into a short set of slides that intrigues the audience and makes them want to find out more.
Posted by Vijaychandran Veerachandran at 1:38 AM
Commandment #4: Know Your Audience
So…you’ve obeyed the first three Commandments:
· Commandment #1: you’ve contacted the right partner in the VC firm,
· Commandment #2: you’ve arrived early to make sure you’re ready to roll when the VC (who will usually be late) shows up, and
· Commandment #3: you’ve tried your best to carefully crafted your pitch so that it “teases, but doesn’t overwhelm”.
Now, you’re about to start….but, who are all these people?
Typically, your initial meeting with a VC firm will have 1-3 people in attendance (see more below). But even if the only person there is the partner whom you originally contacted, make sure that you spend a minute or two at the beginning of the meeting understanding how his background relates to your startup idea. At the very least (Commandment #10), you should have read the partner’s description on the firm’s web site, and googled him or her.
Here are a few suggestions:
· Ask how any of his relevant portfolio companies relate to your startup idea (and make sure that you’ve visited the web sites of those relevant portfolio companies).
· Ask what other startup deals in this space has he looked at,
· Where does his interest in the space come from,
· What does he see as the major problems facing any startup in this area, etc.
. Listening carefully to the answers to these types of “range-finding” questions will help you make sure you don’t inadvertently head off in the wrong direction – which many entrepreneurs, believe it or not, do.
VC’s will often have other people attend even the initial meeting (BTW, it’s always a good idea to contact the VC’s admin prior to the meeting to find out who else will be there – in which case you can read about the other attendees on the VC firm’s web site (if formally affiliated with the VC firm) or find out about them through Google or a service like Linked In).
These other people usually fall into one of the following categories:
· Domain experts: No matter how hard one tries, the VC cannot know as much as the entrepreneur about the specifics of the entrepreneur’s business (Note: I did not say that the VC realizes or recognizes this…..only that it’s true). So, all successful VC’s have developed networks of friends with domain expertise in areas of mutual interest. It’s quite common for a VC to invite one or more domain experts to sit in on the initial (or a subsequent) meeting.
· Venture Partners: Venture Partner (“VP”) is a category sort of like “Other”. A non-exhaustive listing of categories of “Venture Partner” includes:
· someone whom the VC’s would like to have as a general partner, but who wants to, for whatever reason, maintain more of an independent role (or not commit to full-time work with a VC firm);
a “friend” of the firm who has some domain expertise (or a business contacts network) that is of ongoing interest to the firm’s investment strategy (e.g., an electrical enginerring professor with an expertise in, say, the CAE area or materials science who helps a firm look at semiconductor startups); and
· someone who used to be a General Partner and is cutting back on their workload
· EIR’s: “EIR” usually stands for either “Entrepreneur-in-Residence” or “Executive-in-Residence”. An Entrepreneur-in-Residence is usually someone who has previously started a successful company with the VC firm, and who is using an office at the VC firm while exploring company ideas for his next startup. But there are a range of variations on this theme. Executives-in-Residence usually, but not always, are operating executives who are “on call” for a VC firm to step into a role at a portfolio company when a management role needs to be temporarily filled. But again, roles with this title vary greatly.
· Associate: How VC firms treat the title of “Associate” varies widely. In some firms, it is the first step on the “tenure track” to becoming a General Partner. In others, it’s much like the job in an investment bank: two years after college or a job to learn something about the venture business, but at the conclusion of which the person moves on to something else.
Unless you know the people in the room already, (or know “of” them in detail), it can help your cause to spend 1-2 minutes on each person finding out about their background and the perspective from which they’ll view your startup idea. This can help you “tune” your presentation so it presents the appropriate information, and anticipates areas of probable concern.
As you do this, take notes (unless you have a perfect memory). This will help you, as you go through the presentation, refer back to comments made, or concerns voiced in the beginning of the meeting. To the extent you have material in the presentation that pre-emptively addresses concerns articulated in the early part of the meeting, you look more on top of things – and that can increase your chances for success.
Posted by Vijaychandran Veerachandran at 1:37 AM
Commandment #5: Create the "Aha" Early
A long time ago (“last century”, as my teenage kids delight in saying), I took the California Bar exam -- along with 3,000 – 4,000 other applicants (as a probably not very good sign, last year over 8,000 applicants took it). While studying for the Bar Exam, I received a helpful piece of advice that I offer up as the 6th Commandment.
On the final day of preparations, my professor told a very nervous classroom:
“…remember the following as you start to write: (1) your answer will be graded by a very busy practicing lawyer who makes about $3 per answer that they grade, (2) your answer will be graded on the bus, train or plane, or late at night in front of the TV, or when the grader is tired, and (3) your answer will be the 150th answer to the exact same question that the grader has read in the past couple of days.”
“What does that grader want from you when your answer book comes off the unread pile and is opened?”
“Get to the point -- FAST!”
Having been on both sides of the table over the past 25 years, I can tell you that failure to heed this bit of advice is one of the leading causes of short, unproductive meetings between entrepreneurs and VC’s.
NOTE #1: As I’ve posted numerous times (though some readers seem not to have noticed), this is NOT a defense or apology for VC behavior. Having witnessed it from both sides, I know that VC behavior in meetings can be good (occasionally), bad (often) or ugly (sometimes). That said, the goal of these 10 Commandments is to offer up some frank advice to entrepreneurs to help them do the best job they can when raising money from VC’s.
NOTE #2: Having represented entrepreneurs for ~20 years, I know that they pour their hearts and souls into their business plans and presentations.
NOTE #3: I am not, myself, a good presenter.
Now, back to the action…
If you read Commandment #3, you know that the goal of the first meeting is to get the second meeting. You probably also know that much of what VC’s do for a living is sit through presentations – lots of them. Because of this, no matter how hard one tries, it’s easy -- just like the Bar Exam grader on their 150th answer -- to lose interest in a presentation if it doesn’t get to the point – FAST. This may be good, bad or ugly, but it’s a brute fact of life that entrepreneurs who want to optimize their chances for success should keep in mind.
When I practiced law, I used to tell my clients that, by the second slide, the VC should know what “it” is that their company is going to do. “It” will be different for each startup, obviously, but the goal of the presentation should be to provoke an “aha” in the VC as early as possible in the presentation. I know from my own experience that if I don’t understand what “it” is early, I get “stuck” trying to figure that out, and don’t pay close attention to the ongoing presentation. This is not just me – it’s true for all VC’s. Some of us are just more polite than others.
So, how does one do this?
Having sat through my share of presentations, I can say there are lots of good ways. In the next paragraph, I’m going to make a (not brilliantly original) suggestion, but the most important thing in a presentation is that it be in the presenters “voice”, not mine or anyone else’s. So, find a way that’s comfortable for you, but DO find a way.
When sitting through a presentation, I find it quite helpful to have “it” explained as the answer to some variant of the following question: “What problem is my startup solving?”
So to maximize your chance for a second meeting, do something that I know is really, really hard: concisely and clearly answer that question.
You’ll be glad you did.
Posted by Vijaychandran Veerachandran at 1:36 AM
Commandment #6: Explain Your New Idea by Analogy To, or Contrast With, Old Ideas
To date, I’ve tried to couch the ideas in the “Ten Commandments” as objectively as possible. No doubt, I’ve only partly succeeded, but in this post I’m admitting upfront that the following advice is likely to be idiosyncratic to me, and may not apply to every VC you ever pitch to. So, use it only if it feels good in your own “voice”.
In Commandment # 6, I urged entrepreneurs to describe the “It” early (and explained why). I suggested that a way to do this was frame the description as an answer to the question: “What problem are you trying to solve?”. Commandment #6 is, sort of, the next step in that process of making clear to the audience how your “It” solves the problem.
One way to describe “It” quickly and cogently, I find, is to analogize to, or contrast your “It” with, the other, existing “It’s” out there. Sometimes (most likely, the “contrast” situation), the other “It” is a product or service that you’re going to kill off, replace, compete with, complement, or relate to in some direct way because your “It” and the other “It’s” are solving problems in the same or similar markets.
Sometimes, however, it’s useful to analogize your “It” to an “It” from an unrelated market. This works best when the other “It” is a popular “social artifact” – such as Blog, Google, TiVo, Podcast, etc. (good way to tell this is when the “social artifact” formerly just a noun, has morphed into a verb due to its popularity).
An example: One of my companies, Pluck (www.pluck.com) has a very interesting set of capabilities, in some ways structured around the core application of an RSS newsreader. Among a bunch of other features and functionality, Pluck enables (I promise this advertisement will be brief) users to save, store and file web content in ways that allow groups of collaborators to access, over extended periods, the data stored in a collectively accessible place. This, plus the other features of the product, is a complex set of capabilities to explain quickly. When the team pitched Mayfield on their deal, they described this unique ability to “time shift” access by groups to stored web content as “Tivo for the Web”, and that phrase turned out to be a great way to initially place Pluck in an already understood mental category for my partners and me.
Needless to say, “TiVo for the Web” is not a complete description of Pluck, and, like all figures of speech that seek to explain by emphasizing analogies between otherwise different things, you can push it too far. Care should also be taken not to fall into, what I call, the “Hollywood trap”. According to friends in the film business, the spoofs of Hollywood in which the principal way of pitching a new movie idea is to describe it as the mélange of two (or more) earlier films (e.g., “Son of Dracula meets Bride of Frankenstein”) is actually fairly accurate. As the foregoing parenthetical shows, it’s easy for this to slide downhill into farce, so use discretion.
Think about this technique, however, as a potentially useful way to help you get to the point fast. I recently met with a startup that pitched their wares as: “podcasting for cell phones”. For a bunch of reasons, I didn’t think the business was a good one, but, nevertheless, I immediately had a sense for what they were trying to do.
Another interesting application of this that I recently saw was described as “eBay meets CNN”, a sort of “a news site (portal) for amateur (newsworthy) videos where viewers rate the videos to move them up or down in the popularity queue”. Here, the entrepreneur (a Mayfield EIR) decided for various reasons not to pursue the idea, but it was easy to quickly see what he had in mind – and start to frame some of the due diligence questions one would want to ask.
I’d actually be interested in hearing from readers other examples of this type of thing – and whether they find it useful as either an “elevator pitch” technique (if they’re entrepreneurs) or as a quick way to categorize the new “It” (if they’re VC’s).
Posted by Vijaychandran Veerachandran at 1:34 AM
Commandment #7: Limit Yourself to the Baker's Dozen
Loyal readers who’ve slogged it out with me so far will know that, partly by “tradition”, and partly due to the Hard Stop (Commandment #2), entrepreneurs usually have about an hour to get their message across in the first meeting with a VC (subsequent meetings vary in length).
Loyal readers also will know that entrepreneurs have lots to do to prepare for that first meeting (Commandments #1 and #2) and make it productive (Commandments #3- #10 (#8, #9 and #10 aren’t posted (or written) yet)).
Now, more bad news: entrepreneurs have to do all this in 13 (or fewer) slides.
I know, I know…..sounds impossible, but do the math: You have (roughly) an hour. According to Commandment #2, you should use a few precious minutes to find out “who are all those people”. Let’s say 5 minutes. That leaves 55 minutes, more or less. 13 slides = <5 minutes/slide. Not much time.
Plus, you’ll get questions (in fact, 9 times out of 10, it’s a bad sign if you don’t). This uses up even more of your precious air time (BTW, Commandment #10 (forthcoming) dishes on how to handle questions).
Now, in reality, actual mileage may vary. The “optimal” number of slides in your presentation may not be exactly 13, but the truth is that it can’t be much more than that or bad things happen: (1) you run out of time, (2) you look disorganized or (3) you end up handling the last few slides like one of those radio announcers at the end of a drug ad – speeding through 10 pages of fine print about possible side-effects in 3 seconds. Hard to follow, right?
More constraints: you don’t even really have all 13 slides to explain your business. In every first presentation to a VC, a few slides on stuff other than explaining the business are mandatory: (1) the team, (2) the competition (more on this in forthcoming Commandment #9) and (3) the financial projections. So, you really have about 10 slides to do your thing.
Remember, in the “religion” of getting VC financing, simplicity is a cardinal virtue. Keep this – as well as Commandment #3: Tease, Don’t Overwhelm – in mind.
All this said, we’ve done deals at Mayfield where, despite a lousy initial presentation (takes one to know one; I’m a lousy presenter myself), it was nevertheless clear that the entrepreneur had a great idea. But, is it ever helpful to meet a startup team that has clearly, cleanly and crisply distilled a complicated message down to 13 slides (or fewer).
Following Ten Commandments in only 13 slides is really hard. If you can do it, however, you’ve helped yourself more than you probably know.
Posted by Vijaychandran Veerachandran at 1:32 AM
Commandment #8: Know What You Don’t Know – and Admit It
If all questions about your startup had well-known, easy answers, you’d be on your IPO roadshow, not meeting with early stage VC’s. Most good, early-stage VC’s don’t expect entrepreneurs to know everything, but they do expect entrepreneurs to know what they don’t know and to be upfront about it. This Commandment gives advice on how to handle this.
To set the stage: VC’s invest in people. You’ve all heard the old saw: “To a VC, what are the three most important things about a startup?” Answer: “(1) the team, (2) the team and, (3) most of all, the team.”
By and large, it’s true.
Now, if you followed Commandment #1, you’re meeting with VCs who know something about your area. I know it seems hard for entrepreneurs to believe (especially given some of the comments I’ve gotten), but VC’s are generally smart people (present company excluded). They can have lots of other unattractive attributes (just like entrepreneurs and other people), but they are, on average, reasonably smart. Thus, your jaw shouldn’t drop if you find yourself in a VC meeting and you get a question about your business to which you don’t know the answer. Believe it or not, this sometimes happens.
Here’s some really important advice.
When this does happen:
DO: admit (with confidence) that you don’t know the answer
DO: make a note of the question
DO: quickly find out the answer to the question
DO: promptly follow up offline with the VC who asked the question
DO NOT, REPEAT, DO NOT: fake your way through an evasive, oblique, or indirect attempt at an answer.
I know from comments to my blog that some readers reject my proposition that VC’s are, more or less, smart folks. That’s OK. Everyone’s entitled to their own view on this matter, and, who knows, they may even be right. But, even to those doubters (if they want to raise VC money), I implore you to believe that VC’s (smart or not) do have good bullshit detectors – even in areas where they’re not necessarily domain experts. Often, of course, it’s not even that hard. Human beings are generally pretty good at reading body language, and body language usually gives away evasive behavior.
To put this in a more positive light, from the VC’s perspective (no VC actually thinks about it this “formalistically”), I offer this little “algorithm”:
· There’s a “list” of the important questions about any new business idea, some of which are not currently “answerable” (e.g., will the market develop as predicted by the entrepreneur);
· The entrepreneur should have answers to most of the currently “answerable” questions on this “list” (e.g., why a large incumbent vendor with major brand recognition and a huge cash hoard can’t easily move into the market); and
· If the entrepreneur doesn’t, he should admit it, and quickly heed the aforementioned advice about follow-up.
Again, VC’s don’t expect entrepreneurs to have all the answers. As mentioned, if you did, you’d be on your IPO roadshow. VC’s do, however, expect entrepreneurs to know the “list” of important questions. Failure on this front is the real confidence deflator (though, to say the least, it also doesn’t inspire confidence if an entrepreneur doesn’t know the answers to questions that he should).
Failure to heed this advice can hurt an entrepreneur in a way that might come as something of a surprise. VC’s ultimately cannot know nearly as much about your particular business as you do (see numerous references in prior Commandments). After lots of due diligence meetings, reference checks, customer calls, etc., many funding decisions more or less rest on VC intuitions about the “character” of the entrepreneurs. This is why VC’s are so much more comfortable backing entrepreneurs they already know.
Keep in mind, many important questions about a startup are not answerable until the startup answers them (positively or negatively) by executing its business plan. VC’s, at least the good ones, know this. Thus, if the entrepreneur exhibits evasive behavior when answering a question, the “trustworthiness meter” starts running in reverse. Believe me, every startup will encounter situations in which the entrepreneur will have to report to the Board of Directors on a tense, critical situation, with highly imperfect information – and, after lots of analysis, the Board’s decision will often rest on beliefs about “character”.
So, for any entrepreneur who wants to raise VC funding, following Commandment #8 -- (1) know a lot, (2) know what you don’t know and (3) admit it when asked -- will get you a lot farther down the road.
Posted by Vijaychandran Veerachandran at 1:30 AM
Commandment #9: Be Like Goldilocks
Any VC who doesn’t grill you on “the competition”, either in the initial meeting or during due diligence, fails the VC IQ test. Understanding how to think about – and present -- the competition, therefore, is important to getting VC funding. Here are some thoughts.
Competition is, what I call, a “Goldilocks” phenomenon. You don’t want too much (no surprise here) and you don’t want too little (hmm, surprise?) – you want it just right.
It’s probably easy for entrepreneurs to understand why too much competition is a bad thing:
· Competition for Funding. By this, I don’t mean that there isn’t literally “enough” money to fund multiple startups in a single niche (on the contrary, one of the problems of the current early stage venture capital ecosystem is that there’s too much money chasing early stage deals). It’s more nuanced than that (and not as self-serving as it always sounds on first blush to entrepreneurs). Several actual reasons:
o because most top-tier VC firms don’t invest in companies that compete too closely (longer discussion in a future post), a startup that has numerous existing startup competitors actually may actually have a much shorter list of top-tier VC’s to approach; given the odds of any particular VC firm funding any particular startup, this can have a dramatic adverse effect
o Though apostasy to entrepreneurs, it’s actually quite hard to distinguish among startups going after the same space, if there are a lot of them. When this occurs, every startup suffers from the “least common denominator” effect -- and inevitably seems less interesting; and
o Many VC’s simply won’t fund the 4th or 5th company in a space.
· Competition for Talent: Pretty straightforward. Commandment #8 asserts that “it’s all about the team”. Where talent is concerned, two bad things happen when there are too many competitors:
o talent gets spread too thin; and
o good talent stays away because the space is too “crowded”.
· Competition for “Market” Attention: In a market with numerous competitors, any single startup will have a tough time gaining the attention of important consultants, analysts, pundits, columnists, reviewers, press, etc. Partly, it’s the confusion (and the extra effort required to make sense of the competitive dynamic), and partly it’s the “least common denominator” problem mentioned above.
· Customer Confusion: Much the same thing. Quite often, customers faced with numerous competing products or services find it too costly and confusing to differentiate. Remember: purchase decisions have costs. When the costs are too high (because of confusion about what product or service is the best fit or value), it’s always bad news. At best, the purchasing decision is delayed (as the competitors confuse the customer base by bashing each other). At worst, the customer makes the “safe” choice and buys the product or service from the “most trusted” vendor – usually a large, established competitor with a vaporware or highly inferior product or service.
· Customer Leverage: Smart customers also play off startups against each other to get the best deal. Since the value of an early, marquee, reference customer is so important to a startup, the customer has all the leverage here.
· IPO Opportunity: For established companies, public markets don’t like markets with too many competitors because competition drives down margins and earnings. For startups trying to go public, that’s also true, but another concern also comes into play. To go public and achieve an efficient market for its stock, a startup needs coverage by sell-side analysts. Even in the “good old days” when there were lots of analysts, it was not easy for startups going public to obtain broad analyst coverage (other than from the underwriters). Nowadays, it’s much worse, given the dramatic decrease in the number of sell-side analysts.
· M&A Opportunity: In many markets (e.g., “core” enterprise ERP applications, or, increasingly, consumer internet businesses), the dominant players provide the main liquidity option through mergers and acquisitions. While actual strategies differ, often the dominant players in a market will buy the 2nd or 3rd leading startup, rather than the leader. Leaders often think they can go public as an alternative, and therefore demand a premium acquisition price. Startups in the 2nd or 3rd position feel more vulnerable, and therefore feel pressure to sell for a lower price. Once each of the dominant players has made an acquisition in a market, it’s often “game over” for the other competitors who remain independent, even the market leader. Why? Even for companies selling a technology-based product or service, the marketing, distribution and sales (or in consumer internet parlance, “customer acquisition”) muscle of a larger company is often more important than any particular technology. A cheaper, inferior product or service in the hands of a powerful distribution system often defeats a better product or service being sold by a startup, even the (pre-acquisition) leader. So, in a crowded market with dominant incumbents, if you’re not acquired, you’re toast. Smart acquirers use this leverage to their advantage. The more startups to play off against each other, the better.
: Having said all this, however, the history of venture capital is replete with instances where promising markets are imprudently (and even stupidly) over-funded. VC’s (like entrepreneurs and other people) don’t always do the smart thing.]
Given all the bad things I just wrote about too much competition, one might assume (some entrepreneurs do) that “…if having a lot’s bad, then having none must be great…”. This is wrong for a couple of reasons:
Though I’ve never seen it, I suppose that there may be cases, very rarely, in which a startup has a truly unique and original business idea – and therefore has no competition. Most startups, however (no matter how innovative), do. Given the inefficiencies in the information marketplace about startups, entrepreneurs may not know about all their competitors, but they’re almost always out there. I know, from my entrepreneur friends, that this is painful for entrepreneurs to hear – and understandably so. Because they’re human beings, and therefore subject to the same motivations (and foibles) as the rest of us, it’s hard for entrepreneurs to make the enormous sacrifices necessary for success if some little corner of their mind doesn’t think that they have a deep, fundamental insight into a market that no one else does.
Given this, if a startup asserts that they don’t have many (any) competitors, they hurt their case, no matter what. Either: (1) the VC won’t believe them, and will think that they simply haven’t done enough competitive due diligence (and are therefore not worth backing) or (2) the VC will believe them and conclude that, if there aren’t any competitors, it must not be that large or interesting a market.
So, if too much competition is bad and too little (or any) competition is bad, what’s the entrepreneur to do?
Couple of things:
Do your competitive due diligence. By dint of their position in the deal flow, VC’s in the top-tier firms often know a lot about who the startup competitors are in a given market. VC’s expect (and reasonably so) that good entrepreneurs, even though they’re usually not as deep in the deal flow, will be very well informed about their competitors, and to have thoughtful, balanced analyses of their strengths and weaknesses.
Don’t be Afraid to List Your Competitors: From the VC’s perspective, it’s much more impressive to hear a thoughtful, careful, balanced analysis of a crowded competitive landscape, than it is to hear one that omits many of the competitors (the worst) or naively concludes that all the competitors are “losers” (for one reason or another). VC’s will fund startups that have competitors. Don’t be afraid to point them out.
In summary, as you develop your business ideas, and begin to think through your investment pitch to the VC’s, remember the following; it’ll help:
Having too many competitors is always bad. If you have too many, consider another startup idea, painful as that is.
Having too few competitors is usually bad. If you have too few, consider whether the market’s that interesting.
Having some competitors is good. It validates the market opportunity. BUT, know who the competiors are and understand their weaknesses AS WELL AS their strengths. VC’s are most impressed by entrepreneurs who know who their competitors are and know a lot about them -- and have a healthy respect for them.
Posted by Vijaychandran Veerachandran at 1:29 AM
Commandment #10: Control the Meeting (But Be Smart About It)
In a VC meeting, first thing to remember: Your goal is to get the next meeting (See: Commandment #3).
Second thing to remember: That’s not your audience’s goal.
The goal of the audience is to decide whether it’s “worth it” (see below) to schedule a second meeting (their opportunity cost, and, to a limited degree, yours). For this, they will inevitably ask a bunch of questions (see Commandment #8: Know what you don’t know, and admit it). Questions can be good, bad or distracting (a form of “bad”). The wrong approach to answering questions can be fatal to the second meeting. This Commandment offers advice on ways to handle this situation.
Caveat: As I’ve written previously, the dance between entrepreneurs and VC’s is not “fair” – at least not in the “cosmic” sense of disappointed entrepreneurs. Several commentators on this blog have, as expected, taken me to task for openly stating this (“arrogance” being one of the kinder epithets). In general, when offering advice about a system is not “fair”, you can take two approaches: (1) how to change the system, or (2) how to navigate the system, “as-is”, to your immediate, practical benefit. Unapologetically, my approach is the second. Not that the first approach is not worthwhile; it likely is. It’s just not the approach of this blog.
So, you’re going to get questions (as previously mentioned, you’re usually in trouble if you don’t). Questions usually come from a variety of motivations, “Good” and “Other”.
“Good” motivations include the following: (1) questions designed to see if you know your market, technology, competitive dynamics, risks well enough for the VC to invest money in you (i.e., the kinds of questions you would pose to anyone asking you for money), (2) questions designed to see how you handle “tough” questions (a form of “stress” interview – startups are hard; you want to back people who – at the very least -- can handle tough questions) and (3) questions to elicit one or more facts that will enable the VC to decide whether to marshal the resources for (more charitable way of saying “incur the opportunity costs” of) additional meetings.
“Other” motivations vary, but here’s one example. Like all human beings (including entrepreneurs), VC’s have egos. The human ego is not, shall we say, always at it’s best in a “competitive” situation like a VC meeting where there is a premium on being (or appearing) “smart” in front of a bunch of other smart people (including the entrepreneur). (For more on this, see Commandment #3: Know Your Audience.) You will, on occasion, run into someone in a VC meeting, who seems dead-set on pursuing a line of questioning that shows how much the questioner knows, but is a side-show to the main event: your business presentation. There are others, as well. For your purposes, however, questions derived from all “other” motivation are similar – they are a distraction and you need to deal with them, and move on, so you get through your presentation (See all prior Commandments).
How do you do this? Because situations differ so widely, I don’t have “one-size-fits-all” advice. But, here are some tips.
Make sure you understand the question!
There are at least two important reasons for this.
First, VC’s are highly (and negatively) sensitized to entrepreneurs who don’t (or by their behavior appear not to) listen. Indeed, a proven way for entrepreneurs to avoid all the fuss and bother of actually getting money from a VC is to give this impression.
[N.B.: Because I can hear the flame-throwers being fired up, let me be clear: this is NOT to say that VC’s have all the answers, NOT to say VC’s are always right, NOT to say VC’s are good listeners, NOT to say VC’s aren’t often arrogant, NOT to say that entrepreneurs should merely agree with whatever the VC says, or otherwise be subservient in the meeting with the all-knowing VC. This IS to say, however, that openly and honestly engaging in a conversation, and really listening to the person with whom you’re conversing is a good thing to do. As I’ve noted in numerous prior posts, VC’s are no better than this than anyone else (maybe worse), but they’ve got the money.]
Second, often entrepreneurs and questioners go at it, wasting precious meeting time, only to conclude that they don’t actually disagree on some fundamental matter.
Usually disagreements are either “factual” (I don’t believe some fact you assert) or “judgmental” (even if I agree with your factual assertions, I don’t agree with your conclusion). Over the course of several meetings, these ultimately require different handling. But for the first meeting (where you’re trying to get the second meeting), I would suggest that “discretion is the better part of valor” -- no matter which type of disagreement.
When someone asks you a question in a VC meeting, you (or someone on your team) should start a little timer going in your head. If you’re starting to spend a wildly disproportionate amount of your allotted hour on a particular point or line of questioning, you (or your team-mate) should make the decision to move on. There are probably numerous ways of politely doing this, and – as with all other advice in these Commandments – you need to find your own “voice”, but something along the following lines may be a helpful place to start.
“I think I understand your concern on this point, but let me make sure whether or not I do (and explain the nature of the concern or disagreement). While it is an important point that we think we can explain to your satisfaction, why don’t we take it off-line? We absolutely want to make sure we give you a complete and thoughtful answer, but we do want to make sure that we have time to present our entire idea to you before the meeting’s over.”
Assuming the questioner is not a complete jerk, this (or something like it) will usually work, and the presentation can proceed. If it doesn’t work (i.e., the questioner is just a jerk), then move on to a different VC firm.
Now, in “moving on”, your work’s just started. Go back and read Commandment #8. The advice there also applies in many ways to this situation. That is, (1) note the disagreement, (2) after the meeting go gather your facts and your (logical) arguments and (3) quickly and succinctly follow up with the questioner and your proponent within the VC firm (if they’re different). This shows a number of characteristics that VC’s like: diligence, thoughtfulness, “eye-on-the-prize” thinking, etc.
In any particular situation, you’ll need to make your own micro-judgment about which way to go. If you’ve followed the previous Commandments (e.g., knowledgeable VC partner, background on the attendees, etc.), however, you’ve at least got a start. And you’re ahead of the game just because you know that some questions are distractions -- and need special handling.
Keep in mind, that you can easily have a pyrrhic victory in your first meeting. You do NOT want to thoroughly and conclusively rebut a time-consuming challenge from someone, but run out of time to get through the presentation and win the prize: the next meeting. If you are spending too much time on an issue (unless it is THE absolute key issue – which is rare) then figure out a strategy to move on.
Good luck getting that next meeting (and your funding). Entrepreneurs make the world go ‘round and, without them, VC’s would have to go get honest jobs!
Posted by Vijaychandran Veerachandran at 1:15 AM
Wednesday, July 13, 2005
As I spent some time today, getting my blog-life organized after my layoff, I ran across this this advice for CEO's from a good friend of mine, John Kernan. John has been a successful serial entrepreneur for probably 40 or more years, most recently with a KP and Accel-backed company called Lightspan (Lightspan merged with Plato Learning, and John now does angel investing and board service). John has, over the years, run companies that have been wildly successful, as well as a couple that have failed. Over this long career, John developed a set of "rules" that help a CEO keep his (or her) board focused on helping move the Company forward.
I've worked with CEO's for roughly 25 years, as a lawyer and as a VC, and John is the best CEO I've ever met at "managing" his board of directors. In today's world, the term "managing", when used in connection with an information-intensive process (like CEO/Board relations), frequently takes on a negative connotation. I mean something different and positive.
What the 10 rules listed below are aimed at doing is helping the CEO use the Board of Directors in a way that best helps the Company make progress -- not by hiding information (you'll see below John's advice on dealing with bad news), but by being aware that one's board of directors, like any group of human beings, can be organized in a way that is constructive -- or not. Successful CEO's realize this and proactively try to get their boards to operate in a way that best helps the Company -- it will not come as a surprise to anyone that Boards don't necessarily self-organize into highly efficient, constructive, high-powered and helpful groups of advisors.
Here's his take on how to do this. I mostly agree with John. Both to amplify some of his remarks, however, as well as make some additional points (and take issue with a couple of his "rules") I'm going to add some additional thoughts over the next week or so.
1. NEVER have the board meetng "at" the board meeting. ALWAYS call every director a few days before the meeting and run every important issue by them to get their input, Also update them on company performance, especially the bad news, and let them "beat you up" privately. That way, the meeting can focus in a constructive fashion on problem-solving and building the Company for the future.
2. Maximum Powerpoint show is four slides from any presenter, especially yourself. This should be the limit of director interest in detail.
3. Provide complete access for the board to everyone and everything in the Company. They will rarely use it, but it's a great comfort to them to know you are not trying to hide anything.
4. Have your key team members do almost all the presentations. It gives them exposure and allows you to make sage comments along with the rest of the board. A perfect board meeting is when 10% of the talking is done by the CEO, 60% by the team, and 30% by the directors.
5. Carefully consider every director's input and take good notes at the meeting. These people have lots of experience and many great contacts. But you make the final decisions (and if you don't, they will start to look for someone who will).
6. Give the Directors projects in their areas of expertise. It's free consulting and they usually do a good job.
7. Get in front of the board on tough decisions like top management changes, including changes to your own role. If it's going to happen, make it your idea.
8. For VC directors, try to picture how they are describing your Company to their partners, and what questions their partners are asking. Your job is to make each director a hero to their partners (or corporate boss).
9. Remember it's Company first, team second, you last. You win when everybody wins, not when just you win.
10. Make a friend of every board member. Send them interesting deal ideas you turn up, learn about their interests, make the board a "look forward to" experience for everyone.
If you work hard, always act in good faith and in the best interest of the Company -- and if you follow these 10 rules -- most VC's will still be interested in financing your next deal, even if the Company tanks.
And if the Company is a success, they will be throwing money at you
Posted by Vijaychandran Veerachandran at 12:29 PM
Tuesday, July 12, 2005
Traditional Media Companies Buying Their Way On To The Internet
by Michael Deibert, Tuesday, Jul 12, 2005 8:15 AM EST
THE ACQUISITION OF INTERNET COMPANIES by traditional media entities has continued unabated in the first half of 2005, with an uptick in mergers and acquisitions (M&A) that has the market approaching heights it hasn't seen for some five years. In June, media giant Gannett bought PointRoll, a Web-based suite of online advertising technologies, in a transaction that was said to be in the $100 million range. The same month, the Scripps Howard News Service bought the comparison-shopping service Shopzilla for about $500 billion. And in February, The New York Times Co. paid $410 billion to acquire About.com.
"It's a little bit of a carrot and stick approach," said Tolman Geffs, managing director at Jordan, Edmiston, a New York firm that specializes in middle-market merger and acquisition advisory services to the media and information industries. The firm represented PointRoll during its acquisition.
"The carrot is the growth opportunity for ad-driven businesses online; the stick is the hole the Internet is creating in the profits of the traditional media, particularly newspapers," Geffs said. "Online extensions of those newspapers are not enough to fill that hole, and so what they are doing now is re-deploying 10 to 20 percent of their market gap into faster growth business."
According to a Jordan, Edmiston tracking study of 11 media and information sectors, during the first half of 2005, 266 M&A transactions were completed. That represents a 15.2 percent jump from the same time period in 2004, totaling nearly $27 billion in value.
The number also represents a 180 percent increase from the same six-month period one year earlier, and nearly totals the $30 billion in M&A transactions for all of 2004. The amount of activity marks a steep increase from the first halves of 2001, 2002, and 2003, which saw media transactions at the $15.3 billion, $5.9 billion and $8.5 billion level, respectively, and came within sight of the $36.8 billion in activity that was seen over the first half of 2000.
"Through the end of 2006, we expect to see further re-positioning of capital by the big, diversified media companies into building online portfolios," said Geffs.
Posted by Vijaychandran Veerachandran at 1:51 PM
Fred Dotzler, De Novo Ventures
Oct 1, 2003
I've invested in many early stage life sciences companies during my 19-year career as a venture capitalist. Following are 10 lessons that I have gleaned from my experiences that might be useful to someone embarking on a career in venture capital.
1. Generate deal flow. You can't invest in companies you don't see. Having a reliable source of investment opportunities is crucial to the success of any venture capitalist. There are many different ways to create deal flow, and it's wise to use all of them. Among the more prolific are an individual's network of entrepreneurs, former work associates, law firms, patent attorneys, consultants and other venture capitalists.
2. Keep an open mind. Many venture capitalists have declined an investment opportunity that earned a great return for those who invested in the company. One reason for rejecting companies is the belief that the technology will not work or cannot be developed. After doing this early in my career, I devised a question that I ask myself each time I see a company with a challenging product development problem: "What if it works?" Big money can be made investing in products that many believe cannot be developed. When evaluating a company I use the Ben Franklin technique of listing the plusses and minuses, with a third category for "unknowns" to guide my due diligence.
3. Follow the money. It's easier to build a company investing in products that will be sold to customers who are making a profit and have discretionary spending. In the health care industry, hospitals have money to spend for medical devices, pharmaceuticals and equipment used by their medical staffs, and for medical information systems. Physician practices can sometimes be difficult customers - many don't reserve a lot of capital for reinvesting. Selling capital equipment to university researchers is often problematic because of budget limitations.
4. Learn how to identify great people. Everyone knows that great people make great companies. The trick is to learn how to identify them. Early in my career I attended a three-day seminar on how to interview candidates for jobs. Ask questions that focus on past behavior and results. Following up with thorough reference checking is essential to hiring great people. I have evaluated some candidates positively during an interview, only to readjust my assessment after checking references. It's also helpful to review a candidate's work product - patents, marketing plans, sales reports, etc.
5. Be rational on terms of investment. Venture capitalists who offer standard terms develop reputations for being fair and reasonable. Those who add 2x or higher liquidation preferences, full ratchets, conversion price adjustments on public offerings and the like often aren't invited by current investors to evaluate other companies.
6. Be patient with startups. The first attempt at product development often fails or the specifications change for the product preferred by customers. Occasionally a product launch fails because the company targets the wrong customer segment. The product/market strategies of many companies evolve over time.
7. Keep track of cash balances. It's the lifeblood of portfolio companies. Know how many months of cash burn remains. Have a plan to raise money through a venture capital financing, corporate partnering, borrowing, grants, etc. Know what milestones the company must achieve to enhance its chances of raising money with favorable terms.
8. Spend time every week working on all your portfolio companies. A corollary of this is to avoid getting on too many boards. I have found it valuable to ask CEOs the following question: "How can I help you?"
9. Don't get too high on good news. Likewise, don't get too low on bad news. Many companies find themselves on a long-term, secular upward trend with cyclical variations. If things appear too bad or too good, just wait because they'll change.
10. Treat everyone with fairness and dignity. That goes for founders, management, co-investors and service providers. Failure to treat people with respect will damage your reputation and turn off your deal flow. Express gratitude to your management teams for their successes.
Frederick J. Dotzler is a founder and Managing Director of Menlo Park, Calif.-based De Novo Ventures (www.denovovc.com). The $100 million venture fund makes seed- and early stage investments in a variety of medical device and drug discovery companies. Prior to co-founding De Novo in 2000, he was a GP at Medicus Venture Partners (which he founded in 1989) and Crosspoint Venture Partners. He sits on the boards of GenoRx, Healthtalk Interactive, Microvention, Point Biomedical, and SenoRx.
Posted by Vijaychandran Veerachandran at 7:38 AM
Monday, July 11, 2005
For these days I am having a lot of doughts .. Ok let me put it down..
1 What am I here for in dream land USA..
This thoughts are very conflciting . Yeah I mean it. If i finished my master in Industrial Engineering yes its very good and great job. The starting salary will be like 45 k for a fresher and my be in a year or two it will come up to 60 k.. I want to reacall now about my african friend who is my room mate he was a banker back there have 6 years experience and he is studying male nursing . Ireespective of any oods he will start with 120 k and citizenship that the minimium bet..
People who work in health care makesa hell a lot of money. they start with 60 ks and go up to more amount ( an accelerated salary rise) compares to liner rise in engineering sector
i identifies three sectors here may be i am wrong..
1. Banking ( Think investmentbaking and M&A, Startegic management )
2. Health Care (Dont even think hou much Doctors and any one in healthcare )
3.Information Technology ( Software every one I know is doing well)
So better get in to any of these sectors ..No dought about it..i am getting in to that one okkk.
My research is Healthcare Economic Evaluation . Which will give me cooverage in both the sectors Healthcare and banking sector as an analyst to start with ... Hope everything workss...
Posted by Vijaychandran Veerachandran at 6:12 AM