Archive for the ‘VC Post of the Day’ Category

Don’t Have A Lazy Relationship With Your VC

Today’s great post is from Bilal Zuberi @ Lux Capital. In it he asserts that Friends Don’t Let Friends Have a Lazy VC/CEO Relationship. I see this play out so many times in so many ways that – while it seems obvious – it’s an important reminder to all entrepreneurs who hear their friends complaining about their relationship with a VC.

Oh – and make sure your VC has a sense of humor. For example:

Hornik: Get an Introduction

I love it when David Hornik – one of the very first (maybe the first) VC bloggers writes a post. Today’s is Want to get funded? Get an introduction! So simple, yet so often overlooked or ignored.

The punch line – it’s the transitive property that we learned about in elementary school math:

So how do you get funded?  Step one — get an introduction.  Find someone you know who can introduce you to the person you want to pitch.  The closer your relationship with the person making the introduction, the better.  And the closer that person’s relationship with the VC the better.  I’ve written about this before and described it as “borrowed credibility.”  If you are being introduced by someone who has credibility with the VC, and you have credibility with the person making the introduction, you will have credibility with the VC.

I learned about this in elementary school math class — it is called the transitive property:

if

A has credibility with B

and

B has credibility with C

then

A has credibility with C

And as a corollary to the traditional transitive property, (1) the stronger the credibility between A and B, and (2) the stronger the credibility between B and C, (3) the stronger the credibility between A and C.

If you don’t follow VentureBlog, you should. It’s the original.

McClure on Scaling Venture Capital

Dave McClure has a great post up today titled VC Evolution: Physician, Scale Thyself. It’s a long ramble, as is Dave’s style, on a bunch of issues around the evolution of how VC works and scales. I’m an investor in Dave’s fund and have believed in him from the beginning so it’s cool to see him continue to push the edge of things.

While Foundry Group has a very different strategy than 500 Startups, an awesome thing about Dave and 500 Startups is that they HAVE a strategy, which many VC firms don’t.

Joe Kraus’ Caller ID Test

I love it when Joe Kraus blogs. I don’t know Joe very well – mostly through my partner Ryan McIntyre (who was Joe’s partner at Excite) but I’ve greatly enjoyed our deep dinner time conversation (the last one I remember was a Vegas one that was the Dick Costolo / Eric Lunt leaving Google party which was – eek – a long time ago).

Joe’s blog today is called The Caller ID Test. TechStars Boulder Demo Day starts in 25 minutes and this post is super relevant for everyone in the room – both entrepreneurs and investors. It’s a simple one – when you see the caller ID from the person on the phone, do you want to answer? If not, think hard about what that means.

Josh Breinlinger: Why VCs Lie

I discovered Josh Breinlinger’s blog this morning via a tweet from @stefanobernardi. I added it to the Ask the VC blogroll and read through VCs are liars. And so am I. And – Josh is right – it’s super hard to say “you suck” or “your team sucks” as a reason for passing.

I’ve written more about this in the post on Feld Thoughts titled It’s Hard To Tell Someone They Suck.

Weiss: The CEO’s Weekly Checklist

Scott Weiss, a partner at Andreessen Horowitz, has an excellent post up on GigaOm titled The CEO’s Weekly Checklist. I’ve gotten to know Scott over the past few years via the board of Return Path. Scott was co-founder/CEO of IronPort (acquired by Cisco) and built a very significant and powerful company – his checklist comes from his experience growing as CEO from the beginning of IronPoint to an over $100 million company.

Parker: Open Source and For-Profit Companies

On the heels of Yahoo suing Facebook for patent infringement followed by Tim Armstrong at AOL saying “hey Wall Street – look at me – I’ve got great patents also“, Andrew Parker (Spark) wrote a post that brought me out of my “intellectual property depression” titled Open Source and For-Profit Companies.

I’ve been thinking about advancing innovation in the software industry since I was in a PhD program at MIT Sloan School in the 1980′s studying under Eric von Hippel. Eric is one of the best thinkers I’ve ever encountered around this topic and Andrew’s post – which articulates a trend of for-profit companies open sourcing core pieces of their products – is powerful support of many of Eric’s theories.

Andrew’s money quote is:

“But, the most important part of Dan’s observation is that open sourcing the product inside a business is now becoming normal, and that’s wonderful.  Dan seems to be slightly pessimistic about this new world of corporate-controlled open source projects (I take that hint from his desire to rename this phenomenon), but it’s 10X better than having 5 companies all building the same product independently of each other in a closed manner, like what we saw in the column-store DBMS market over the past decade (Vertica, and companions).”

The construct of “intellectual property” – and the government’s right to grant an exclusive license to companies (e.g. a patent) as a way of “promoting innovation” has completely broken down in the software industry. Interestingly, this is happening at the same time that “being open with source code instead of protecting it through trade secret” is also occurring and both accelerating innovation as well as enhancing value in many new companies.

We are in a very complicated place in the evolution of the software and Internet industry. I hope we don’t fuck it all up. Thanks Andrew for weighing in with a clear example of something that is very positive for the ecosystem.

Oh – and if you want a dose of sarcasm beautifully written, check out Mark Cuban’s argument that he hopes Yahoo Crushes Facebook in its Patent Suit. His money quote:

“This is what patents are for, right ? To protect companies with original IP from smarter, faster, aggressive companies who catch the imagination of consumers and advertisers. What else could patents be for ?”

Mark’s serious comments are worth reading carefully.

“Seriously, there are industries where patents are used fairly to protect intellectual property. The technology industry is not one of them.

Change is needed. However, its not going to come from our government. The lobbyists have taken over. One of the symptoms of the illness patents have caused the technology industry is the explosion of lobbyists pushing the agenda of big patent portfolio holders. They are not going to let our lawmakers give an inch.

Rather than originating in Congress, its going to take a consumer uprising to cause change. What better way to create a consumer uprising than to financially cripple and possibly put out of business the largest social network on the planet ?”

Suster: Never Negotiate Piecemeal. Here’s Why

There were very few VC posts today – I’m guessing most VC bloggers are either sleeping late, at SXSW (and possibly sleeping late due to their hangovers), or not blogging today (yeah – I know the third one is – well – a tautology).

Mark Suster (GRP) has a great post up titled Never Negotiate Piecemeal. Here’s Why. It’s great advice and perspective on the art of negotiating.

Wenger: A Rational Internet Venture Valuations Bubble

As I sit here in Boulder watching MI-5, taking care of Amy, avoiding SXSW, and catching up on RSS and email, I came across a post from Albert Wenger (USV) that rang true. It’s titled A Rational Internet Venture Valuations Bubble and is insightful, clever, and though provoking. Easily the best VC post of the week.

McIntyre: Unencumbered By Reality

Ryan McIntyre, one of my partners at Foundry Group, has a delightful post up this morning with a short (4 minute) video about the founding and startup of Excite on his blog titled Ctrl+Alt+Compete Documentary. Ah yes, Excite, one of the first search engines (can you name the very first one? I’ll give you a hint – it was created at SIPB.) I love this story – it serves as Saturday morning inspiration for anyone in school thinking about starting a company. He even references Gopher which made me chuckle out loud.

My favorite phrase – “we were unencumbered by reality.”