Archive for the ‘VC Post of the Day’ Category
Don’t compete with Fred Wilson (USV) on Mondays for the best VC Post of the Week. He wins again with Financing Options: Bridge Loans as part of his MBA Mondays series.
Ok – I know it’s not Monday anymore. So you get the best post of Tuesday also, which is from Nic Brisbourne (DFJ Esprit) titled Software patents – a brake on innovation. Another smart person weighing in on how messed up the software patent situation is.
Mark Suster (GRP) has today’s VC post of the day titled What Startups Can Learn About PR and Crisis Management. As with many of Mark’s posts, it’s an excellent piece of long form writing that thoroughly dissects the issue of crisis management and makes a number of very significant recommendations which are summarized below.
- If You Don’t Shape Your Story, Somebody Else Will
- Understand the Gravity of the Situation for Your Customers
- Don’t Bury Bad News
- Never Blame the Press
- Know Your Key Messages
- Don’t Take the Bait
- Develop Trusted Advisors
- Get to Know the Press Now
- Get Media Training
- Have a PR Strategy
Go read the entire post. It is excellent. And read it now, before you have a crisis (which you, and everyone else on the planet, inevitably will.)
Rob Go (NextView Ventures) has the VC post of the day titled Should You Meet With VC’s Early for Feedback? He adds additional perspective to the posts I highlighted last week from Allen Morgan and Mark Suster about meeting with VCs before you are ready to formally pitch them.
The VC blogging was pretty thin pickings this week. I wonder how many VCs are ignoring my suggestion to ignore the Dow? To all my VC friends out there – the next time you think about checking the value of your public company stocks, how about writing a blog post instead?
The VC post of the day is from Zack Shulman (Cayuga Venture Fund) titled Should Founders Personally Guaranty Bank Loans?
If, as an entrepreneur, you’ve raised any institution money, the answer should be – as Zack explains – a decisive NFW. In addition, your institutional investors are likely prohibited from doing this by their fund agreements.
I’ve explained publicly to many of my government friends why the SBA is totally ineffective around lending to high growth, venture backed companies. Their requirement for a personal guarantee from the founders and any owners (including investors) of over 20% of the company is another reason the SBA is a total fail when it comes to lending for high growth companies.
Fortunately, there are some great banks – like Silicon Valley Bank and Square 1 Bank – who understand how high growth companies work. However, the bilions that programs like the SBA theoretically allocate to high growth companies through programs like Startup America could be much better suited to simply giving to SVB and Square 1 to invest. But that’s a post for another day. In the mean time, if you are an entrepreneur in a high growth company, focus your energy on SVB and Square 1, not SBA lenders.
Many of the VC Bloggers are talking about macro economic chaos and the impact on startups. We’ll highlight a few of them today.
First up is Nic Brisbourne (DFJ Esprit) weighing in from the UK where, in addition to a falling stock market, there is fire in the streets. His post, Keep going through the turmoil, is a good reminder to all of us, not just entrepreneurs.
Roger Ehrenberg (IA Ventures) provides some Sound thinking for unsound times via his note to early-stage companies everywhere.
Albert Wegner (Union Square Ventures) ponders Double Dipping and I don’t think he’s talking about chips in guacamole.
Finally, Dan Primack has an awesome interview with Alan Patricof (Greycroft) about VC business (mostly) as usual.
Monday is a tough day to be a VC blogger because you are competing with Fred Wilson’s MBA Mondays series. Fred once again delivers with his post Financing Options: Capital Equipment Loans and Leases. In this post, he talks about ways to finance your capital equipment without using cash from your equity financing, which is usually your most expensive source of capital. Fred isn’t a fan of debt, so this is a well considered piece on when debt can be useful in an early stage startup.
As a runner up, Allen Morgan has a follow up to his blog from last week titled More on “Why Entrepreneurs Should Never Meet With VC’s Unless They’re Formally Pitching”. In it, Allen clarifies his perspective and expands his post from last week titled Why Entrepreneurs Should Never Meet VC’s Unless They’re Formally Pitching.
Remember, unless you trade stocks for a living, don’t watch the Dow this week. There’s nothing you can do about it. And if you watched it obsessively on Friday, here’s what you saw.
Yup – it ended where it started after a handful of wild swings. Pretty exciting, eh? Just think how much anxiety the commentators on CNBC generated talking about it while you were getting some real work done.
Today’s VC Post of the Day is from Richard Dale (Sigma Partners) titled All the Bad Things VCs want to do to You! I don’t think this particular post needs much of an explanation.
Albert Wegner (Union Square Ventures) has today’s VC Post of the day titled If You Need To Raise Money, Get Your Financing Done ASAP. In it, Albert expresses his belief that given the current macro economic environment, companies should focus on getting their money raised quickly – as in right now. He’s conveying global / macro pessimism that many people are talking about. While there are obvious timing disconnects between the long term value of a startup (often much more than five years), there is often a sentiment shift in the funding environment – all the way through the funding supply chain – when the economy goes south.
While Albert’s advice is great, I actually feel this is advice that all entrepreneurs should heed all the time. Having been involved in plenty of companies that were flush with cash for a while and then woke up one day needing cash but finding the funding markets tight / dry / dismal, I’ve experienced the pain first hand of being an entrepreneur in a difficult funding environment. You can never predict when this is going to happen, so my point of view is raise the money when you can, make sure you know whether your existing investors can (or will be able to) fund you if the market dries up, and don’t optimize your timing in hope of a modestly better valuation.
Remember rule number 1 – never run out of cash.
Bijan Sabet (Spark Capital) has the VC Post of the Day with Always be Recruiting. The best CEO’s I know are always recruiting, completely obsessed with building the best possible team, and tireless about meeting great new people that might some day be a fit for their company.
As a bookend to this, Eric Friedman (Union Square Ventures) has a great complimentary post titled How to get a job at a startup. In it he has some practical advice for anyone who wants to get a job at a startup.
As a special bonus today, Chris Dixon (Founders Collective) has an awesome post up titled What The NYC Startup World Needs (And Doesn’t Need). As someone who studies the idea of entrepreneurial communities and has worked hard at building one in Boulder as well as supporting other cities, I agree with everything Chris says in this post.