Wednesday, September 30, 2009

Do you need Venture Capital?


I think one of the biggest misconceptions among entrepreneurs about venture capital is that you need it.

Okay, there are cases where a VC is critical to a company's success. Wait, I should say 'money' is critical. That the VC is critical is true only if he is the only one who could have provided it.  I'm not sold on the value-add proposition that the VC offers market knowledge that you couldn't get elsewhere.  Sometimes that is the case and sometimes not.

Below, Guy Kawasaki of Garage Technology Ventures talks about VC 

Guy Kawasaki Part 2     Guy Kawasaki Part 3
  • Guy didn't seek VC as an entrepreneur 
  • Don't seek VC unless your company will do > 75-100MM in revenue
  • Present A Clean Deal- no legal issues, nepotism, IP issues, etc 
  • Use Power Point
  • Doesn't invest in 'great teams'; Louis Borders' WebVan as an example
  • Wants to fund tech companies that need money to scale; not to prototype
  • Guy's Web Site
In the video below, the notorious ChurchHill Club of Silicon Valley discusses some current (2009) insights into the venture capital, angel, and private equity markets.



Jay Hoag, Co-founder, Technology Crossover Ventures
Reid Hoffman, Chairman and CEO, LinkedIn
Matt Murphy, Partner, Kleiner Perkins Caufield & Byers

Moderator: Geoffrey Yang, Founding Partner, Redpoint Ventures


Also see The National Venture Capital Association
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