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Posts Tagged ‘Startup’

How To Appeal To Investors: Top VCs Reveal The Anatomy Of A Successful Entrepreneur

In Business, Tech and Social Media on 15/05/2012 at 07:06

There’s a lot of money floating around Silicon Valley right now, and it’s becoming easier and easier for entrepreneurs to get access to the capital they need to get their companies off the ground. Resources like AngelList are trying to level the playing field, and facilitate conversations between founder and investor, and the passage of the JOBS Act will alter the landscape for early-stage companies by giving them access to crowdfunding from the masses. There are even charity initiatives like the ones launched by Execand Motion To Dismiss Cancer that give a select few access to top entrepreneurs and VCs.

At a very fundamental level, the venture capital business is being reshaped. As the Kauffman report points out, most VC funds aren’t generating more than the three to five percent return one finds in the public markets — the yield investors expect, the report finds. In fact, the report states “VC returns haven’t significantly outperformed the public market since the late ’90s”.

Speaking to a crowd at the Grind work space in New York last week, Fred Wilson addressed this ongoing shift, saying, “there’s two times as much capital in the venture capital business today than we, the professional investors who make up the venture business, can actually put to work intelligently.”

This isn’t so good for VCs, Wilson says, but it is for entrepreneurs. Of course, the fact of the matter is that the top VC firms, super angels, and angel investors have unparalleled deal flow, they see hundreds, sometimes thousands of pitches, are privy to information few outside very small circles ever get to see. They are custodians of that equally valuable currency — information. As hard as the media and others work to reveal the goings-on behind the scenes, as Chris Dixon points out, most coverage doesn’t reveal 90 percent of the relevant information. This is true not just of funding announcements in tech publications, it’s true of panels at conferences, interviews, video, and more. (cont … Tech Crunch)

The “Army of One” Entrepreneur

In Tech and Social Media on 09/05/2012 at 22:44

What’s the best strategy to get from having no startup to having one that provides you with income?

Is it to find the best idea you have, focus all your energy on it, and make it work at all costs? This seems to be the standard mode of operation for most new entrepreneurs. They’ll wait until they have an idea that they can pursue and that seems worth pursuing, and then pour all their energies into that idea. If it works, great. If the idea happens to be a stinker, they’ll probably fail. Some might be lucky enough to know that they should validate the idea before pouring a year of development effort into it, and so find out the idea is not so good before all the money is gone.

Once upon a time, it used to be that starting a company and building a new product was a big and all-consuming affair (notice I’m not even talking about cost). If you were Henry Ford and you wanted to try out your new idea about car manufacturing, there was no way to do that without pouring most of your time into that one idea. Steve Jobs and Steve Wozniak had to put their heart and soul into building Apple for it to stand a chance. Granted, Woz also worked at HP at the same time, but it took more than 1 full-time person’s attention to get Apple to the point where its potential for success was validated. Even today, many such businesses are still started. Dropbox, AirBNB or Spotify are not the kind of business that you can start with only part of one person’s attention. You need several people to dedicate all their time to proving the idea, if you want it to stand a chance.

But is that true of all startup ideas? Clearly not. There are many ideas which you can validate very cheaply and without pouring all your time into them over a long period of time. They may not all be great, world-changing, visionary ideas, but they are still ideas that serve a purpose, fulfill a need, and have the potential to create value for both the founders and the customers.

Is that even true of most startup ideas? Do most startup ideas require a large up-front investment in time to validate that they could be good, worthwhile ideas? (cont…swombat.com)

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