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Venture Capital This Week | May 7 - 11

Friday, May 11, 2012 6:00:00 AM PDT | VentureDeal Staff

It's never a dull week in venture capital. Things may be happening behind the scenes, but somehow, somewhere it eventually comes out. We pick the best stories, blog posts, tweets and other intel inside the VC ecosystem here in the US and in happening places like India, China and wherever VC is making waves. Onward dear reader…

 

WHAT VCs REALLY WANT

Successful Internet VC Brad Feld doesn't shy away from making headlines, or salty language.

Brad Feld: VC Rights: Up, Down, Know What the F**k Is Going on

Feld gets in a nice plug for his book on negotiating venture capital financing (not that he needs the money), but the post echoes his belief that VCs and entrepreneurs should try to keep things as simple as possible in negotiating deal terms for investment.

 

VC INVESTMENT BY LPs IS BUSTED!

The Ewing Marion Kauffman Foundation published an in-depth report (PDF) on their experience investing in venture capital funds over the past 20 years and the picture is not pretty.

Kauffman: We Have Met the Enemy... and He Is Us

Even though a number of blogs were breathless in stating that the report said the “VC model is broken”, the report is really saying that the LP (limited partners who invest in VC funds) investment model is broken by not setting up the right alignment of interests.

 

BUYING SHARES IN THE FACEBOOK IPO?

Successful Internet and digital media venture capitalist Alan Patricof weighed in on whether or not retail investors should buy shares in the imminent Facebook IPO.

CNBCFacebook IPO Video

Facebook is being valued at a rumored 24 times revenue versus Google at something like 5x, so Patricof said that at that price, the company will have to perform to "perfection" to justify that skyhigh valuation. He thinks that it will probably pop on the IPO, because Facebook is such an integral part of the average consumer’s life… but buyer beware!

 

NORTHEAST ANGEL VENTURE CAPITAL

Silicon Valley Bank, which provides loans to venture capital-backed startup companies, interviewed a couple of prominent Northeast Angel investors – Brian Cohen, NY Angels and Stephanie Newby of Golden Seeds.

SVB: Angel Investor Video

The video is titled "Angel Trends” and it includes some information about that, but also includes general information about the kinds of companies that interest them the most. It's 24 minutes long, but if you're an entrepreneur that's new to the Angel process, probably worth your time.

 

FLOATING ISLAND FOR YOUR STARTUP?

Ever wanted to launch a startup on a converted cruise ship? Probably not, but that's not going to stop a company called Blueseed.

The Verge: Blueseed Floating Tech Island

They're putting together plans to dock a large ship 12 miles off the coast of Silicon Valley and charge entrepreneurs rent to launch their startups in international waters, not subject to US visa regulations and other pesky rules.

 

THE NEXT SILICON VALLEY

Everybody wants to get in on a good thing.  Victor Hwang, managing director of a Silicon Valley VC firm, thinks he knows the secrets to building the next Silicon Valley.

ReadWriteWeb: The Tech Rainforest

There’s lots of talk about "creative reassembly", hardware (buildings) and software (people). Interesting top-level stuff, especially the part about how government should or should not play a role in the process.

 

EUROPEAN VENTURE CAPITAL IN A BAD WAY

Fred Destin is a long time VC in the online space with Atlas Venture and used to be based in London but has since moved recently to Boston, so he knows the Euro VC scene and it isn't pretty right now.

Fred Destin: The Great European Venture Capital Crisis

He discusses the continued contraction of venture capital activity and viable firms in Europe, no doubt due to the financial crisis and its aftermath sovereign debt crisis in the EU.  In true European fashion, the governments are stepping in to help prop up the industry.

 

CROWDFUNDING IN VC LAND

With the recent enactment of the JOBS Act, the startup world has gotten a jolt of new possibility thinking for entrepreneurs wanting to gain access to funding.

GigaOm: What CrowdFunding Means for the VC Business

Never one to be shy about giving his opinion, successful Internet venture capitalist Fred Wilson ruminated at a small conference that maybe crowdfunding is the way of the future and venture capital firms better figure out fast how to operate in a new world.

 

CORPORATE VENTURE CAPITAL ON THE RISE

NVCA (National Venture Capital Association) head honcho Mark Heeson spoke of an interesting trend in the rise of corporate VC activity.

Richard StuebiVenturing into the Future

Stuebi noted this trend in the context of his own interest in clean tech investing and the importance of entrepreneurs and venture capitalists understanding the pitfalls and possibilities of "dancing with elephants" when dealing with corporate/strategic investors.

 

BILL GROSS THE ADVICE MAN

Los Angeles investor and entrepreneur legend Bill Gross says that he has some advice to give you about some advice he got a long time ago:

Bill Gross: The Best Advice I've Ever Received

Gross is a genuinely curious guy and a real digital heavyweight who posts a lot of his thoughts on his Google + account.  The article says he's founded or invested it in 100 companies with lots of successes and his IdeaLab has been a local fixture in Pasadena for years.


DAN PRIMACK BOOKENDS THE VENTURE CAPITAL DEBATE

PE blogger Dan Primack over at Fortune has a good analysis of the Kauffman report about how broken VC is these days:

Dan Primack: Breaking Down Broken Venture Capital

The value of his post is that it goes into a little more detail about the original Kauffman report, puts it into perspective and also raises some valid selection bias questions.

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