Thanks,Paul.
Just when it all seems bleak, you deliver a bit of common sense. How true it rings.
Thanks.
Why There Aren't More Googles
141–150 of 161 posts
Re: Why There Aren't More Googles
#142Earlier quoted context omitted.
How did you bump into Google, coming from the middle of the country? What made you get over the initial skepticism and join? (If you don't mind me asking.)
I was working at Intel in Santa Clara. As for skepticism, I'm always skeptical, but I liked the people and product, so...
The rest is history. I was interviewing at Altera and Xilinx at the time. Never would have occured to me that something that big was brewing not to far away.
Re: Why There Aren't More Googles
#143VCs appear to be just like the rest of us: risk averse and with a fear of failure. I bet they put on their pants one leg at a time, too. Thanks for the wake-up call.
Re: Why There Aren't More Googles
#144I come from another perspective, I have lost absolutely all faith in investors period. In the early nineties (during a recession in the UK) I started my passion and dream of building a design, manufacturing and distribution company. It was one hell of a chunk to bit off. Imagine 2 years design period, manufacturing cycle is a min of 6 months from ordering components to final assembly, then you have to spend on market…
It sounds like a great story. At least it gives me hope for the future.
Re: Why There Aren't More Googles
#145I think this is really simple answer on the question why VCs are so conservative. They barely understand business they invest in. That's why they look for traction so much! Traction is just a mix of financial metrics, and that's what they really understand. Before you can show a hockey stick chart showing number of visitors, or better revenue or profit, there is no real interest from VC side.
I think the reason why angels become a real drivers of innovation these days is because they invest pre-revenue, and the reason why they do it is because they understand the business they invest in and play an active role in it.
Dimitri, founder www.nuospace.com
Re: Why There Aren't More Googles
#146this is a great post. It rings so true. We are a nearly ten year old technology firm that has spent years of laser light focus on our product. The venture industry is a herd that cannot understand innovation if their lives depended on it and seem to care more about the politics of the venture world rather than spending time to learn beyond the ridiculous 'elevator pitch'. God forbid you say your technology is a major innovation and will change an industry - I think they all would rather have a weather widget on Facebook than actually shape an industry. I sometimes wonder if VCs are so drawn to the Midas 8 from Google (which is 10 years old and getting dusty up at the top) that they emulate the investment strategy of this lucky few rather than finding their own path. Our company is now talking with Wall Street firms about raising $100 to $200 Million over the next few months and smart money is betting we have created a $50 Billion industry that never existed before. We find it comical as the street has embraced our company while the VC community continues to chase the "me-toos" while talking the talk.
Re: Why There Aren't More Googles
#147It's pretty clear that VCs are more like hedge fund managers than their name would indicate. Hedging, trend following, even arbitrage are more important to maintaining the IRR of the fund than developing innovative companies. This is by necessity, rather than by preference, I imagine. No Managing Partner will or should allow significant bets to be placed on the roulette wheel of technology, no matter how interesting or exciting, when the entire fund, and the livelihood and reputation of the partnership could be at stake.
A possible solution is to expand the availability and amount angel/seed financing available to entrepreneurs by an order of magnitude, or more. This could be done by creating a quasi-public market (offshore, since the SEC wouldn't even consider it) that would allow individual investors to buy small pieces of early stage companies.
Individual small investors with a high tolerance for risk and a more certain knowledge of technology, innovation and particular industry sectors would form the basis for this new financing engine for startups. Companies would need to publish some kind of prospectus and they would also be rated by the number and quality of current investors, who would also be ranked.
This is not unlike the angel networks of today -- but would take the model to the next level by allowing millions of individual investors to participate in the $1,000 to $10,000 range in each venture.
Re: Why There Aren't More Googles
#148It's the longtail of investing.
The secret will always be in the filter - how to seperate the wheat from the chaff.
Right now people wait to see what survives.
How does one do this better? No idea - but let us imagine that we can use The Wisdom of Crowds.
Maybe the trick is to build operate and own an exchange that performs some level of due diligence on the companies and lets people - us, the great unwashed - invest micro amounts via paypal or similar methods. Of course there will be frauds and fools, but let the people decide how to establish 'trust mechanisms'.
Re: Why There Aren't More Googles
#149Paul, I don't see why would a startup even need $400k in its initial years. After all, isn't the average startup just a few friends working out of someone's basement? At the max their costs include a rented apartment, computers, a few air flights & food.
I am sure I have missed out something big, what is it?
Re: Why There Aren't More Googles
#150I attended a great session by David S. Rose, an angel investor and partner in AngelSoft (doing great things in the Angel Group investing world) at BarCampMoneyNYC a couple weeks ago and learned that Angel Investors and Angel Groups are usually the stage between startup and VC. They are more willing to make smaller investments in less-proven ideas. By the time a company gets to VC stage, it needs to have a pretty well established.