Venture capitalism has a disproportionate impact on the economy. It helps to ensure that technological innovation enriches the few and sustains jobless economic growth. Industrial policy in the hands of the government ideally creates wealth and spreads it around. Venture capitalists pick a handful of winners as part of a process of concentrating wealth in fewer and fewer hands.
For entrepreneurs, there are few tasks more important than raising the capital they need to keep the doors open as they continue their long march toward a profitable venture.
Know what your cost of customer acquisition is and show investors how you can successfully grow you revenue regardless of raising capital. And don't use the term "conservatively" when estimating a value that is obviously and grossly overblown.
Investors want to know that you will prioritize a client meeting over an investor meeting, or you will prioritize a partner/reseller meeting over a press opportunity. Don't chase the shiny objects, show focus and investors will believe in your value.
The theory behind Draper's ballot measure is that subdividing California creates smaller state governments -- and that the smaller and more local the state governments, the more politically accountable and the better managed they will be.
In our experience, those who view their invention as a business opportunity (and keep their emotional attachment to their idea out of the equation) are the most successful.
One reason the finance business is always busy is that it functions much like the arms dealer. You don't need to figure out precisely who's going to win or lose. Some fail, some succeed. If they succeed, they wind up building an army that's accomplishing something.
According to the Kickstarter's data, there was $274 billion collected last year (+238 percent from 2011). In comparison, VC's invested $26.5 billion in 2012 (-10 percent from 2011). Do you see the difference?
Sometimes the success of a great film relies on the best pairing of idea and director. The same goes for business. It's part of the role of the studio executive and the VC to ensure that the right leader is in place to execute the right idea smoothly, on budget, and on time.
VCs are a popular target for the media, bloggers (and even fellow VCs) to hate on. Here's my completely biased and unscientific checklist of who not to take money from.
Infusionsoft, an eight-year-old software company founded by Clate Mask (CEO) and his two brothers, Scott and Eric Martineau, has just been given $54M in expansion funding from the investment firm Goldman Sachs.
While one might expect New York start-ups to exhibit their well-earned reputation for toughness laced with a top note of kvetching, there's no kvetching going on at all. In fact, quite the opposite.
The reality is, though, that incremental business model improvements in big markets can result in highly successful ventures, create many jobs, and solve problems that customers were previously experiencing.
Venture capital is about capturing the value between the startup phase and the public company phase. Others should be focused on capturing the value post the public offering.
After the 2008 financial crisis, capital is too restrictive to be loaned by banks. When I founded my company, I didn't even waste time looking into this fundraising option. It's as improbable as finding the Loch Ness Monster.
VCs are good capitalists. They sell what their investors will buy, and they charge what their investors will pay. The real problem, it turns out, lies with the institutional investors -- the ones doing the buying and the paying.