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Venture Capital This Week | May 14 - 18

Friday, May 18, 2012 8:35:00 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 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…



ANGELS WITH BLACK WINGS

Angel investors can help you get your startup off the ground, but the ones discussed in this post are the kind to avoid:

Karen Rands: Scam Warning Signs

Rands talks about "Decoy Investors" which is really just a nice way of saying scam artist. With the coming influx of crowdfunding services, you can bet that scammers will find new ways to prey on entrepreneurs.

 

GETTING A STARTUP JOB

Startups are known for unusual interviewing processes. Google is legend for its quirky, Marathon applicant screening.

Brad Feld: Guidelines for Interviewing at a Startup

The post is a result of the leader of one of his portfolio companies.  What's interesting is that it is written from the point of view of the job applicant and how to approach a startup to find out whether or not it's going to be a good fit.

 

ASKING FOR INVESTOR INTROS

The key to a successful fundraising is getting warm introductions to active investors. Startup consultant Nathan Beckord as a long but good post on it:

Nathan Beckord: A Better Way to Ask

While it is aimed at a seed stage startup, the concepts are valid regardless of stage of company development. I especially liked the aspects of how to get yourself organized in order to minimize time sink or frustration at losing track of the status of your contacts.

 

ACTIVE VENTURE CAPITAL FIRMS

The WSJ Venture Capital Dispatch says that the number of VC firms that are still active, defined as having made one investment in 2011, has risen.

Venture Capital DispatchHold the Champagne

The Champagne reference is that although the number of active firms has risen, it may be because they are simply continuing to invest in their portfolio companies and are not taking on new investments, since they haven't been able to raise new funds yet.

 

RAISING YOUR SEED ROUND?

Sunil Rajaram cofounded Scripted.com and recently raised a VC-led seed round.  He shares eight tips that he learned from the process:

TechCrunch: How to Raise a $1 Million Seed Round

Of particular note is his tip about not just getting referrals, but getting them from the "right people". Better to take fewer meetings with strong referrals than many with weak referrals.

 

MORMON VCs AND MEXICO

Those are a few words you don't see next to each other very often. Katie Fehrenbacher has an entertaining and thought-provoking story up about Paul Ahlstrom of Alta Ventures and his conversion to focusing on Mexico as a source of deal flow.

GigaOm: Mexico Tech Venture Capital

Apparently, Ahlstrom’s great-great-grandfather brought the family down to Mexico many a moon ago, so it's not as far-fetched as it seems. While they were later driven out, the Mexico Mormons are a persistent bunch and Ahlstrom has been out front.

 

TECHNOLOGY M&A TRENDS

Ernst & Young has its quarterly technology M&A report out, which says that although tech M&A fell, it didn't fall as much as in other industries.

Ernst & Young: Global Technology M&A Update

The conclusion is a relatively positive outlook for tech M&A despite the "global economic malaise", fueled by acquisition interest in social networking, big data analytics, cloud computing and smart mobility.

 

MILESTONE-BASED FINANCING PLAN

So, you’re a founder and you want to build a credible plan for your prospective investors. How do you create something that fits into their mental reference? Think "milestones" young woman.

The Equity Kicker: Value Creation Milestones

DFJ Esprit VC Nic Brisbourne has a “valuable” post up about how to focus your financing plan on company milestones. He provides a variety of examples for technology startups - well worth the read if you are at this stage.

 

THE PROBLEM WITH VENTURE CAPITAL

There has been a debate lately about how venture capital is "broken", stemming from a rather Kauffman Foundation that says that Limited Partner/General Partner interests are not aligned and blames the LPs.

Francisco DaoFred Wilson Is Wrong

Prominent VC Fred Wilson weighed in and a response came from Francisco Dao. He faults the VCs for backing lots of little, "cheap and easy" companies instead of making riskier bets on entrepreneurs tackling huge problems.

 

CONVERTIBLE NOTE SEED FINANCINGS

Entrepreneurs wanting to learn the ins and outs of convertible seed notes, would do well to read a three-part primer on the subject by a knowledgeable attorney:

Scott Edward Walker: Founders Beware!

The series provides information on the basics, the economics and "certain tricky issues" that the attorney has found in his considerable experience.

 

THE FACEBOOK IPO IS FINALLY OVER!

I thought it would never end. Want to know which VCs hit the jackpot on the Facebook IPO and what it means for the VC industry?

Dan Primack: Who Got Rich(er)

Michael Greeley: Facebook and the VC Industry

Primack also includes the top individuals who scored big and Greeley expands a little on what it might mean for the technology startup ecosystem.

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