Entrepreneurs Take the Risks, Not VCs

May 3, 2010

A TechCrunch post by Vivek Wadhwa includes a Q&A with three entrepreneurs who bootstrapped their way to success.

Wadhwa reminds us, “The reality is that less than 5% of venture money goes to seed-stage startups; VCs typically invest when a company has a working product, a tested business model, and a strong management team.” To get to this point, entrepreneurs must make sacrifices, hard choices and call on the support of family and friends (and credit cards). Wadhwa argues that it’s the entrepreneurs who are the real risk takers, not the VCs. (Read more)

Web’s New Sharing Wave the Rage Among VCs

April 23, 2010

FourSquare, Blippy, Skimble, Swipely, Dopplr and Daily Booth? How many of these new “sharing” sites and apps have you heard of…yet? Think back to 2007 and if someone asked you the same question about Facebook, Twitter and LinkedIn?

Venture capitalists are betting on the new online openness those three top social networking sites have fostered to bring on the Web’s next wave — openly sharing everything from where you’re having a beer at the moment to how much you just spent on DVDs, clothes or even a nose job!

See today’s story in the New York Times, “For Web’s New Wave, Sharing Is the Point” by Brad Stone for the scoop.

Entrepreneur and VC Doron Ben-Meir Named Commercialisation Australia CEO

April 20, 2010

Innovation Minister Kim Carr has named Doron Ben-Meir the CEO of Commercialisation Australia.

Ben-Meir is an entrepreneur and VC with more than 20 years’ first-hand experience in the venture capital market, building technology-based companies, assisting early-stage entrepreneurs to develop their businesses, and supporting the efforts of innovators to commercialize their intellectual property. He is the founder and CEO of Prescient Venture Capital and a member of ANZA Technology Network.

Commercialisation Australia has attained $196 million in funding for 4 years and gives businesses access to a range of measures tailored to help them bring their innovations to market. The program is currently accepting applications from Australian entrepreneurs. Click here for details.

Top Tech Angel Investors

March 8, 2010

It’s no surprise that most angel investors are successful entrepreneurs. Those who wear both hats include Jeff Bezos, Reid Hoffman, Marc Andreessen. But are they as successful in the role of angel investor? Bloomberg BusinessWeek asked researcher YouNoodle to analyze the investment track record of this group of well-known tech personalities whose activity as angels has stayed largely hidden until now. (Click here for the list.)

Diary of an Australian Entrepreneur Raising Capital

February 17, 2010

Steve Sherlock, founder of Oodles.com, one of Australia’s leading online car rental aggregators, has been blogging a multi-part series at Australian Anthill on his quest to raise a multimillion dollar Series A funding round. He rules out nothing, seeking funding in the US, Europe and taking advantage of Australia’s grant system. In fact, this week’s installment focuses on the process of applying for a Commercialisation Australia (CA) grant.

We’re just picking up on the ninth installment of Sherlock’s experience, but the previous posts are all available. Click here to read “Diary of an Entrepreneur Raising Capital” and to get up to speed with Sherlock’s other eight experiences in raising capital to date.

Six Things You Should Know Before Meeting with a US Venture Capitalist

February 7, 2010

It’s great to see 2010 Australian entrepreneur of the year, Khimji Vaghjiani, CEO of Solar-Gem getting some press in Australian Anthill. We worked closely with Solar-Gem and the other state finalists in this year’s G’Day USA Innovation Shoot Out in Silicon Valley. Part of our coaching was to prepare CEOs of these companies on what to expect when they started meeting with American VCs and other investors, who approached them after the Shoot Out. Khimji reveals to Anthill some of our advice in “Six Things You Should Know Before Meeting with a US Venture Capitalist“:

  1. Drive-bys don’t work. In order to raise capital in the US, you have to establish yourself there. VCs like to be close to their investments, and they more often invest in companies that own the IP they are investing in. US VCs often take a board position and expect that board to have the final say on company matters … not take direction from a ‘parent’ company in Australia.
  2. Think global, think BIG. Projecting $10M revenue in Australia is considered a reasonable success metric, but this number will not interest a US VC. In the US, $100M revenue projections are common and 10x returns on investment are expected.
  3. Know your competition. Spend time familiarising yourself with your competition in the US market. If a VC names a competitor that you have not heard of, close your laptop and leave — the meeting is over.
  4. Team. Option 1: You have the best team, proven track-records, no question that your team is the right team to execute the plan. Option 2: You have team gaps, you know it and one of your criteria for selecting your investor will be that you believe they can help you build the team.
  5. Focus, focus, focus. Since Australia is such a small market, a company has to sell broadly across many market sectors in order to be considered successful. In the US, however, this could become a company’s downfall. Large, complex markets (like the US) need focus. Your VC wants to see a laser-sharp market entry strategy that will take the company to the next level (profitability or next investment round) as quickly as possible. Be prepared to give the ‘blue sky’ opportunities, but don’t make this part of your pitch.
  6. Learn from every meeting. There are hundreds of quality VCs in Silicon Valley alone. Every meeting will provide you with invaluable advice and ideas that you can incorporate into your pitch and plan for the next meeting. Ask for feedback, and you’ll be able to improve your pitch with every meeting.

Solar-Gem, a company from New South Wales, has an interesting story. They’re an Australian company seeking US funding to develop business opportunities in India, Africa and the Middle East. (Read more)

Top 25 Most Active VCs

February 2, 2010

TechCrunch has published its CrunchBase Dealmaker Ratings on the leading top 25 investors for 2009, as well as 4Q 2009. Overall, for 2009:

The most active VC was Draper Fisher Jurvetson, which invested in 57 deals throughout the year by our count, followed by Kleiner Perkins (49), New Enterprise Associates (47) Intel Capital (46), Sequoia Capital (42), First Round Capital (34), and Accel (33).

See complete tables here.