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 …

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.

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 …

Take advantage of the moment, and run like hell

Jeff Richards’ 8 tips for entrepreneurs: Keep your funding options open. Hire the best talent you can find. Take advantage of the moment, and run like hell. Work with great investors. Play bigger than you are. Find and leverage mentors. Be honest and transparent. Enjoy the ride. Straight forward, but take notice of are few of them: Keep your funding options open. The smartest second- and third-time entrepreneurs I see …

Are venture capitalists paying or living the venture?

Techcrunch article ‘VCs are getting into PR’ started ‘my fire’ again. The article highlights the trend that VCs is no longer just about paying checks – well, if it ever was? – and names PR as one function that VCs are now paying attention to. Obviously, competition for funds and leads as well as the fight for any stakeholder’s recognition …

M&A strategy of many smaller deals less risky than organic growth

Having analyzed the world’s top 1,000 nonbanking companies over the past decade, McKinsey reveal distinct patterns of deal making. The most frequent factors, such as industry structure, the match of an asset with a well-articulated strategy, and the execution capabilities required to realize value, are as relevant as ever. Further more, returns by M&A approach are widely distributed and can …

Rising venture capital opportunities in emerging markets

The rapid accumulation of wealth in the emerging markets is changing how money is invested. A number of factors in the developed countries as well are forcing this change, subsequently the fact that advantages of investing in listed equities are being questioned in light of corporate scandals and a perception that the markets may no longer serve the interests of ordinary investors.

Thank you Blackbox

Finally an attempt to put startup metrics and benchmarks in play. Now you can compare your startup against 3,200+ internet startups! Hard to neglect since 90% of all startups (of which 30% is internet-specific) fail. Although different characteristics, there is good inspiration for the later stage capital people too. (Link removed)

Bet on skill and experience

This year’s MIT $100K Business Plan Contest semi-finalists was named in March. This list is interesting among other reasons because a large component of success in entrepreneurship and venture capital can be attributed to skill, thus increasing the rate of success above the 18-30% average hit rate. Chance of success may be enhanced even further by choosing experienced venture capital firms (but only …