Milestones to Reach for before Raising Venture Capital, if You Need Venture Capital at All

September 2, 2009

by Viki Forrest, CEO ANZA Technology Network

I’ve just returned from running our annual Gateway to the US Focus Workshops in Australia. I saw some good, first-rate companies that are ready to explore their potential in the US market. We’ll be talking more about them as they prepare to attend our Summit next month, but right now, as they start to work with their coaches in preparation for their US trip, I’m reminded how much their focus tends to be toward raising venture capital at this stage in their planning. Every year, our US-based coaches must work with the CEOs of these companies to deflect the idea that coming to the US is only about getting funded.

I was reminded about this in a Venture Beat story I saw the other day, “5 Milestones to Reach before Raising Venture Capital” – these are:

  1. When you don’t need the money
  2. When you have a product
  3. When you know your customer better than anyone
  4. When you have traction
  5. When you know what you’re getting yourself into

This is all great advice that you can read here. But I’d like to add a #6 to this list – not every company needs venture capital. Depending on which VC you talk to, in which country, about 1 in 1,000 pitches to VCs get funded. That’s 0.1%!

What does that mean? The vast majority of successful companies are built on customer sales. This is the major focus of ANZA’s programs.

But guess what? An analysis of companies that have come through the ANZA TechNet Fast Track program (the next step after the Gateway) reveals that 3% of those companies have been funded to date. That’s a track record we’re extremely proud of. Why have those companies gotten funded? Because they have worked in the Fast Track program to focus on getting customer sales!

Good News across Silicon Valley’s Diverse Entrepeneurial Community

August 25, 2009

There’s a venture capital revival happening across Silicon Valley’s diverse entrepreneurial community. That’s good news for companies not only looking to raise funds, but also those looking to enter the US market and grow organically or through other means. It’s a sign that the US economy is looking up in general with numerous industry sectors in play. San Jose Mercury News reporter Scott Duke Harris cites recent investments in pharmaceuticals, desktop virtualization, security, online publishing, smartphones and more in “Venture Capital Revival for Valley Entrepreneurs”. (Read more)

Ten Unconventional Wisdoms for Funding Start-ups

July 6, 2009

Dean Takahashi of Venture Beat has compiled serial entrepreneur Naval Ravikant’s “10 Unconventional Wisdoms for Funding Start-ups” from his keynote at the Finance4Founders dinner in San Francisco last month. Among the top 10 are:

1. Valuation is temporary, control is forever.

2. The less you raise, the more it matters.

3. If you want advice, ask for money.

To read the rest of this engaging list, and explanations for each, click here.

The Top 100 “Most-Networked” Venture Capitalists

July 2, 2009

TechCrunch has crunched the data on a study by Yael Hochberg, Alexander Ljungqvist and Yang Lu titled “Whom You Know Matters: Venture Capital Networks and Investment Performance” and have found that better-networked VC firms experience significantly better fund performance.

A venture firm’s network in the study was defined as

being made up of all the other venture firms who co-invested with it in funding rounds. The more co-investors a venture firm has, the better its network. The better its network, the better its overall returns. The correlation between the size of a venture firm’s network and its returns may have something to do with better access to deal flow, talent, advisers, potential customers, and potential exits.

Find out who the Top 100 best networked VC firms are and read the rest of the story here.

Tips for Australian Companies on Raising Private Capital in Australia

June 19, 2009

At a recent ANZA-sponsored seminar here in Silicon Valley, we heard Tristen Langley, of Southern Cross Venture Partners tell a group of visiting Aussie start-ups to go back to Australia and “raise $400,000” and then return to the US ready to do business.

If you’re an Aussie start-up wondering how to raise private capital at home before going global, we’ve come across an Australian Anthill story by Reuben Buchanan, “6 Tips for Raising Private Capital in Australia”. All of these tips will put you in good stead for raising more money later on in the US. (Read more)

Australian Government Pledges $83M to Save Tech Innovators

March 18, 2009

Big story out of Australia, reported in The Australian IT section — the Rudd government will inject up to $83 million into the local venture capital pipeline as a stop gap measure to try and prevent promising tech companies going under due to the global financial crisis. The Innovation Investment Follow On fund is aimed at supporting companies developing technology in areas such as ICT, biotech and clean energy at risk from VC capital drying up due to the economic crisis. Read it in full here.

Can You Buy a Silicon Valley?

March 2, 2009

Paul Graham has an in-depth essay on his blog on what it would take to start a Silicon Valley somewhere else — anywhere else. With recent buzz about the need for a “Silicon Valley” in Australia, this essay says it will take more than local VCs/angels living in an area who are willing to “give back” to the community, good universities and a decent climate where nerds will “feel at home”.

What will it take? Money — lots of it — but not so much that it can’t happen in Sydney or Melbourne or Portland, Oregon for that matter. According to Graham, “For the price of a football stadium, any town that was decent to live in could make itself one of the biggest startup hubs in the world.”

And how will this work? Read more.