Venture Capital

Private Asses Get More Savvy About Public Profiles

howard heart.jpg There’s finally a way for company founders to get back at VCs when they act like total cocksmiths. A new website called The Funded ranks VC firms based on a five-category system. You need to be CEO or company founder to provide rankings, and if you’re not, membership costs $250 a year. The average rankings are for all to see.
The firms are ranked on a 5 point scale which is an average of a ranking in the categories of Track Record, Operating Competence, Pitching Efficiency, Favorable Deal Terms and Execution Assistance. Members can also comment on their experience with a firm, and do it anonymously. There are private comments that can be posted which only members can read.
The commenters don’t pull punches, even for the most prestigious firms. Some of the comments for Sequoia Capital include:
-Don’t leave a copy of your slides unless you want your competitors to have them
-Be careful these guys eat their own young
-Too much testosterone?
Sequoia is tied for 8th in the rankings with a 4.0. The general consensus with the second highest rated firm Leapfrog Ventures is that the partners are nice, but don’t have a firm grasp of technology. The Luxembourg-based Mangrove Capital Partners is the highest rated fund with a 4.7, with several people commenting on the firm’s refined European sensibilities (apparently that means something, or at least contrasts with Silicon Valley manners).
At the bottom of the barrel you have Longworth Venture Partners with a 1.1 and Bay Partners is second to last with a 1.3.
Not all VCs are taking the scrutiny in stride. One of the most acutely fragile, insecure stung VC gurus is Howard Hartenbaum of Draper Richards (pictured). It appears not everyone hearts Hartenbaum, who mentions in his profile that he’s professionally fluent in Japanese. The following comment appears regarding an experience at Draper Dicks:

What a Nutcase! We pitched Howard Hartenbaum. The guy is rude and arrogant. He spent the first 20 minutes of our meeting on a phone call in an adjacent boardroom and then spent time analyzing the most irrelavent parts of our plan. The “at Skype we did this” and “at Skype we did that” made me want to vomit. Steer clear.

In response, Howard soon got everyone he ever worked with on the phone and got them to comment that he was pretty super awesome in the VC process and an overall swell guy.
The Funded
Web Site Puts the ‘Vent’ Into Venture Capital [Wall Street Journal]

  • 13 Jun 2007 at 12:00 PM
  • Health

VC goes for a herbal remedy

herb1.jpg Phytomedics raised $9mm in Series B funding from VC firms Burrill & Co. and New Zealand-based Inventages, signaling a new wave of emerging botanical drug companies (new term for herb peddlers) that are now FDA friendly. Phytomedics makes an arthritis drug from Chinese Thunder God Vine (you read that correctly) extract. The drug was FDA approved to skip costly preclinical tests and move directly into Phase I trials, which in the case of botanical drug companies, involve feeding mogwais after midnight.
The rheumatoid arthritis market is 7 million patients strong, and existing drugs and current treatments have burdensome side effects (increased risk of death?). Fortunately, botanical drugs don’t really do anything! Botanical drug companies face consistency problems too, as the chemical composition of plants varies with growing conditions.
Phytomedics has raised $22mm since it was founded in 1997.
VCs Seek Health in Herbal Cures [Red Herring]

how do you talk to an angel.jpg If you didn’t know “How to Dance with Angels,” is here to tell you. Even though VC investing is back at 2001 levels, the level of angel investing is ramping up at nearly the same rate. Angel investing, or foregoing VC money in lieu of wealthy individual investors, is seen as a way to prevent the pressures of 20%+ above market returns and allow for more corporate flexibility. More traditional angel return expectations hover around 10%-15% above the S&P. A sense of the overall market, from the article:

Last year angels — wealthy individuals who hope to take advantage of ground-floor investment opportunities in new companies — provided $25.6 billion to burgeoning businesses, an increase of nearly 11 percent over 2005, according to the 2006 Angel Market Analysis released by the Center for Venture Research at the University of New Hampshire. Furthermore, the number of ventures to receive angel funding rose 3 percent, to 51,000, last year, and average deal size grew by 7.5 percent. “This continued rise in total investments points to a healthy angel market,” concluded the report.

More after the jump…

Read more »

Fred Wilson on WallStrip

Lindsay Campbell sits down with Union Square Ventures partner Fred Wilson for a talk ranging from the sale of Geocities to the new coach of the Jets.

  • 06 Oct 2006 at 9:31 AM
  • Start Ups

Geeks+Business=Start-up Mistakes

primerpicture.jpgScientist turned venture capitalist turned blogger Ron Garrett lists the top ten myths tech geeks believe when starting a business. We’ll list out the myths below but you’ll have to go to his blog for the full explanation.

Myth #1: A brilliant idea will make you rich.
Myth #2: If you build it they will come.
Myth #3: Someone will steal your idea if you don’t protect it.
Myth #4: What you think matters.
Myth #5: Financial models are bogus.
Myth #6: What you know matters more than who you know.
Myth #7: A Ph.D. means something.
Myth #8: I need $5 million to start my business
Myth #9: The idea is the most important part of my business plan.
Myth #10: Having no competition is a good thing.

That’s a pretty good list but we’re sure you can come up with a few more. In the comments below, go ahead and leave your favorite start-up mistakes or myths.
Top ten geek business myths [Rondom Ramblings via Business Pundit]

Hand Over Mutha-Effin-Fist: VCs Raking It In

firstfullofdollars.jpgForget what you hear about it being to late to get into venture capital. People will tell you that, having missed the glory days of 1999, there’s no point in going into it these days. They’re full of it. In fact, they’re probably venture-capitalists themselves and just want to keep you out of the competition. The Wall Street Journal today reports that pay for V.C.’s shot up 35% this year. And this was supposedly a rough year for venture capital outfits.

Pay for venture capitalists is up 35% this year, with senior partners at venture firms earning nearly $1.5 million a year and managing general partners raking in almost $2 million. The average employee — comprising lower-level analysts, associates and even office managers as well as the top earners — is expected to haul in $777,000 this year in salary, bonus for 2005 and investment profits, according to a new study from Holt Private Equity Consultants and Dow Jones Private Equity Analyst, a trade publication.

Venture Firms Are Doling Out Large Pay Deals [Wall Street Journal]

The Yacht That Venture Capital Built

maltesefalcon.jpgBehold the Maltese Falcon—venture capitalist Tom Perkins $100 million yacht which set sail in Italy on July 14. Its three masts tower 57-meter above the deck. The entire ship is 87.5 meters long. Although it looks a bit like an old-school clipper, technologically it’s closer to a space ship. The masts rotate to maximize speed and aerodynamics, while specialized sensors feed crew members information on the strain put on the sails and masts.

Superyacht sets sail
[C-NetNews.Com via Luxist]

Venture Capitalists Gone Wild

It’s hard enough to grow old gracefully. Now people are finding economic rationales for resisting their own age. Or should that be rationalizations? Reading this story we couldn’t help but wonder if some of these venture capitalists were simply having mid-life crises and then using the latest tech opportunities as a reason to act out.

Venture capitalist David Cowan is a professed chess-playing nerd who studied math and computer science at Harvard. Last year, though, he decided he needed a crash course in getting hip.
For the first time, the 40-year-old downloaded songs from Apple’s iTunes online-music store and put some games on his cellphone. He started writing an irreverent blog, called “Who has time for this?” with observations on everything from computer security to his dead cat. He urged readers to give their own felines “a little extra tuna” in memory of his departed pet, Snoopy. Finally, the suburban father of three ventured out to a few high-tech networking parties, including one packed with Stanford University students and beer kegs.
His goal: to fit in with the young entrepreneurs who are suddenly the stars of Silicon Valley, with their hot Web startups aimed at teenagers and young adults. They have begun showing up at his firm, Bessemer Venture Partners of Menlo Park, Calif., dressed in T-shirts and flip-flops to pitch ideas, like mobile-phone services that help young people locate each other when they’re out on the town.

Is Trying to Get Down With Young CEOs
[Wall Street Journal via Open Sources]