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It's About The Milestones!

Published: 8/27/2008 10:38:26 AM, comments: 0

One of the things that new entrepreneurs frequently get wrong is how much money they're going to need for their next funding round and how that translates into their company plan.

What I tell startup founders is to think in terms of "milestones and money." In other words, a startup plan should state very clearly what the company expects to achieve with how much money.

From an investor's perspective, they want to know what their money is going to get them, whether it is company performance, valuation inflection or other metrics.

So think very carefully about what your company will provide prospective investors, and in what time frame.

Cheers,

Don Jones

VentureDeal

The Human Equation

Published: 8/20/2008 2:37:48 PM, comments: 2

Much has been said in the technology industry and venture capital world about the importance of the management team in a start-up's fortunes.  One saying is "I'd rather back an A management team with a B idea, than the other way around."

Internet VC Fred Wilson has a long and insightful post about some of the issues surrounding early-stage start-up management teams:

http://www.avc.com/a_vc/2008/08/the-human-piece.html

One of the things that I stress to start-up company founders is that they should understand their strengths as well as their weaknesses.  All effective executives have strengths and weaknesses - one of their greatest strengths is knowing what they're good at and knowing what they need help with.

So I urge you to look at your work history, examine those aspects of your past experience that you enjoyed and excelled at, and those experiences that you were challenged with.  Self-knowledge is one of the greatest assets you can bring to a start-up.

Cheers,

Don Jones

VentureDeal

Hello Credit Crunch

Published: 8/14/2008 11:05:49 AM, comments: 0

I'm not a "sky is falling" type, but my belief is that the credit crunch that's been talked about in the media so much recently is actually just beginning.

In the late 1980s, after the Savings and Loan industry loaned far too much money and paid for their indiscretions by having a nearly complete implosion of their market value, the actual credit crunch happened only after banks started failing and stopped lending.

We are seeing evidence of bank failures now of a pullback in lending to both businesses and consumers.  Below is a roughly 20 minute Bloomberg audio interview of David Goldman of Asteri.  Although he talks about a number of other contributing factors to the financial crisis, such as what he perceives as the beginning of the failure of the hedge fund industry, it is a very succinct and thought-provoking interview:

Interview with David Goldman

Don Jones

VentureDeal

Venture Capital Fund Economics 101

Published: 8/6/2008 4:11:13 PM, comments: 0

Prominent Internet VC Fred Wilson of Union Square Ventures has written a very insightful series of posts on the economics of venture capital funds:

http://avc.blogs.com/a_vc/2008/08/venture-fund-ec.html

http://www.avc.com/a_vc/2008/08/venture-fund--1.html

http://www.avc.com/a_vc/2008/08/venture-fund--2.html

Why should you be interested in the economics of venture capital funds?  If you are searching for venture capital investment, it is extremely valuable for you to understand how venture capital firms operate and how they look for businesses that are suitable for their investment.

Fred is one of the better VCs who invest in Internet companies and has enjoyed a number of significant successes in his career.

Cheers

Don Jones

VentureDeal

Don Jones
CEO, VentureDeal

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