Should You Use Venture Capital: Which America Are You In?
In my two previous blogs, I noted that 99.95 percent of you will not get venture capital, and that 99.997 percent of you may want to refuse VC, even if offered. Are these results universal or are there other factors that affect venture success?
One of the most enduring and influential beliefs of the last few decades has been that entrepreneurs need venture capital to build giant companies. This might be true – but only in Silicon Valley.
Silicon Valley has been the land of milk, honey, and money for entrepreneurs and venture capitalists. Arguably Silicon Valley VCs have helped to build perhaps the greatest assemblage of giant, non-financial companies the world has seen. Starting from around the early 1970s, using all types of venture-capital funding arrangements (rich individuals, family funds, small business investment companies, and VC limited partnerships), they have amassed a string of successes ranging from Intel INTC -1.42% to Facebook FB +2.76%.
Posted in Finance, Opinion, Venture Capita;, Venture Capital
Tagged Entrepreneur, finance, Intel, Limited partnership, Silicon Valley, Small Business Administration, Venture Capital, Victoria Cross
Why NY Venture Capitalists Should Pay Attention To Foreign Tech Startups
I’ve written about the Series A Crunch, and why entrepreneurs can and should consider alternative sources of funding – with a big focus on investment crowdfundingto kickstart the startup’s growth. Securing funding is a constant challenge that many entrepreneurs in the US face these days. Yet, the challenge for foreign tech entrepreneurs is even greater. As innovation becomes a global phenomenon with accelerators, incubators, micro-VCs and seed funds popping up all over the world to jumpstart entrepreneurship, one would expect the distribution of capital to reflect that. However, this is not the case.
Historically, many international entrepreneurs and startups have expanded their operations to Silicon Valley. Being a mature ecosystem, the focus in the Valley is on creating great companies, no matter their origin. This is one of the reasons it’s such a unique place. In fact, the experience and network created in the Valley is so great that it made countries like Canada, Britain and Australia offer incentives for entrepreneurs willing to “pivot” and bring this culture and their startups “home”, so they can create their own versions of Silicon Valley.
Posted in emerging market, Finance, Opinion, Venture Capita;, Venture Capital
Tagged Australia, Business, Canada, Entrepreneur, Funding, Silicon Valley, Startup company, Venture Capital
The consensus among investors and entrepreneurs in Brazil is that the short term will be difficult, but that long-term prospects remain highly favorable.
Brazil’s Internet start-ups were once the darlings of emerging markets, attracting venture capitalists from around the world. But after two-plus years of growth, the sector is facing tougher times, reports Vinod Sreeharsha from NY Times.
Numerous young companies, even those with prominent investors, are struggling to show sustainable profitability despite early rapid growth in revenue. A case in point: Shoes4You, an e-commerce site selling designer footwear, decided to close down last month, despite being backed by the prominent United States investment firms Redpoint Ventures, Accel Partners and Flybridge Capital Partners.
Posted in emerging market, Equity Markets, Venture Capital
Tagged Accel Partners, Brazil, Fabrice Grinda, Flybridge Capital Partners, Founders Forum, Geofusion, IG Expansion, Intel Capital, Jeff Brody, Jose Marin, Kaszek Ventures, Kevin Efrusy, Monashees Capital, Olivier Grinda, Redpoint Ventures, San Francisco, Shoes4You, Silicon Valley, start-ups, venture capitalists
According to New York Times William Alden, When Vinicius Vacanti set out to make a pitch for a local deals start-up to investors, he figured he understood the process given his four years on Wall Street.
But minutes into his first meeting with a venture capitalist, Mr. Vacanti realized he would be rejected. The investor quickly pointed out the flaws, including the site’s lack of users. As Mr. Vacanti rode the bus back to New York from Boston, he considered scrapping the project and starting over.
“The skills you build on Wall Street don’t correlate to a start-up,” said Mr. Vacanti, 31, a founder of the daily deal aggregator Yipit, who previously worked at the private equity firms Blackstone Group and the Quadrangle Group. While some of those skills are useful, he said, “a couple of those are actually bad.”
As more financiers jump to the technology sector, some are finding that their background, typically considered an asset in the corporate world, can be a liability. Some do not know how to write computer code. Others are ill-prepared for the penny-pinching and frustration of start-up life. In short, they have trouble persuading the Silicon Valley establishment that they have what it takes to nurture a young company.
Posted in Economy, Finance, Private Equity, Venture Capital
Tagged Blackstone Group, Boston, New York, Private Equity, Quadrangle Group, Silicon Valley, start-up to investors, Venture Capital Happy Hour, venture capitalist, Vinicius Vacanti, Wall Street