VC proposition: What entrepreneurs want

Next to the reputation of a Venture Capital (VC) firm’s principals, CEOs top evaluation criteria when choosing a VC is the ability to add value to the portfolio company beyond funding. No surprise. However, looking at the prioritization of qualities of a VC, there is a disconnect between the VCs and the customers. According to DeSantis Breindel CEOs tend to …

Public investment funds: The triumph of technocracy over democracy

Legacy institutions are broken. Frustration has grown around the inability of governmental bodies to manage investments. Concerns over the lacking performance amongst government-sponsored incubators and related organizations remain and stands in contrast to the high political priority to entrepreneurial activity (see here). Consequently, commercial organizations owned or controlled wholly or partly by the government (the ‘parastatals’) are spreading faster than …

Angel investments: How not to fail

War stories. People love recounting the one time they caught a big fish, not the many futile hours they spent waiting for a bite. Investors love to recap the successful exchange traded investments they did, and tend to forget the unsuccessful ones. Angel investing is no different. Looking at the venture capital industry as a whole, we know for a …

Broken VC model: Pressure increases as VC goes mainstream

The financial crisis seemed to mark a turning point in the spectacular growth of alternative investments, such as managed investments in hedge funds, private equity, real estate, commodities, and infrastructure. Poor performance and liquidity problems led to massive redemptions. By now, however, those problems have subsided, and alternatives are back on track.

Venture business forecast: If just growth was linear

How good are you at making forecast about your company’s growth? Do historic figures weigh more than the current development stage of the company? Forecasting is a challenging exercise, among others because our brain keeps telling us that growth is a linear factor. Most people accept Moore’s Law (which States that the number of transistors on integrated circuits doubles approximately …

Not copycat. Not tropicalisation. But sound venture capital

The Economist describes in it’s article ‘VC clone home‘ venture capitalists who are making money by bringing old ideas emerging markets – and states that such a copycat business is not the real spirit of venture capital, which is supposed to ferret out and fund new ideas, not imitations. I disagree… Venture capital is supposed to create shareholder and stakeholder returns …

Sense of personal power – a venture capital pitfall

Innovation is driven by open-mindedness, inputs from diverse groups of sources, fostering collaboration across functions, processes, ecosystems, etc. In most cases, the final decision to bet on an idea is taken by one or few executives. Recent research from USC’s Marshall School of Business in collaboration with the London Business School, University of Illinois, and Northwestern University reveals alarming findings compromising …

Engineering and product are still key to the very best companies

Do you find the following questions and issues interesting? If they were commented by Marc Andreessen? Could Zuckerberg have created Facebook if he weren’t younger than 30? About the philosophy that software is eating the world Can Spotify and Netflix be successful? What areas are particularly promising in the very near term? Is the perspective different as a VC than …

The Triumph of Hope over Experience

Reports supporting the poor performance of the venture capital industry are queuing up. The most recent report (May 2012) from the Ewing Marion Kaufmann Foundation is no news, but scary reading: Venture capital (VC) has delivered poor returns for more than a decade. VC returns haven’t  significantly  outperformed  the  public  market  since the late 1990s, and, since 1997, less cash has been returned …