Heard ‘round the investor gathering

Mary Schmidt

Jun 06, 2011

As I wandered ‘round the party at the TVC equity capital symposium this past month, a few things overheard/heard/talked about:

“The traditional VC model is broken.”  Couldn’t agree more.  The days of a gazillion dollar market cap, 10x return, five-year plan, big kahuna org charts are long behind us.  It’s just taking some folks a bit to catch up.

“VCs have become risk adverse.” ‘nuf said.  (Unless, of course, you’re wearing flip-flops and pitchin’ social media woo on Sand Hill Road…then hey, here’s 5 mil! Call when you need more!) 

“About once every 20 years, a technology comes along to displace an industry.”  Yeppers…and good luck to the entrepreneur convincing investors they can make money at something so revolutionary.  As an actual real live VC noted in another blog, don’t worry about somebody stealing your idea.  If it’s really great, you’ll practically have to take a baseball bat to their heads… (The product being presented looked pretty dang revolutionary to me. Too bad I don’t have a few million laying around.)

“If I presented this way at a technical forum, they’d think I was full of it.”  Yep, and that’s always the way.  Techies want data, data, and more data.  Then confirmation of that data.  And well they should, especially if they’re working on something that could literally mean life or death.  However, most investors’ (and customers’) level of boredom is very, very low.  The first algorithm and they’re outta there.

“Most VC firms, investors, and entrepreneurs think of ‘marketing’ as brochures.” This from a frustrated investor who knows better…hello? What’s the product? Where are you going to sell it?  How are you going to sell more than one? 

In Start-Up Sanity Checks