Is Venture Capitalism Dead? Not Yet. Advice from Kleiner Perkins, Hummer Winblad, Shasta Ventures, and Clearstone Venture Partners

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The legendary John Doerr of venture capital firm Kleiner Perkins. (Photo: Thomas Hawk)

Total read time: 12-15 minutes.

The Indus Entrepreneurs (TiE) has mentored some of the most successful entrepreneurs in the world, including 7 of the Forbes Midas Touch members.

In fact, I volunteered for TiE when I first moved to Silicon Valley in 2000 to observe some of the best and brightest in action. I’m not Indian, but entrepreneurship is entrepreneurship. Consider this:

Today, TiE events are a parade of the Who’s Who among CEOs and VCs of Silicon Valley, from founding Sun Microsystems CEO… Vinod Khosla to former McKinsey CEO Rajat Gupta to former Hotmail founder Sabeer Bhatia, who sold his company to Microsoft in 1998 for $400 million. “TiE is the best kept secret,” says Bhatia, who in April launched a new startup InstaColl. Others jokingly call TiE “the Indian Mafia”, the invisible hand behind at least 300 startup companies at any given moment…

In expectation of TiE’s annual conference on entrepreneurship, TiECON 2009 (May 15/16), I asked four of its members, all accomplished venture capitalists at some of the world’s most prestigious firms, to answer questions about start-ups and finance that 35,000+ of you suggested via Twitter, plus a few I wanted to add. The questions include, among others:

What is the best pitch meeting that you remember and why?
What are the most common mistakes or assumptions smart founders make in pitch meetings with VCs?
What unfavorable terms do founders often miss or underestimate in term sheets?
How can someone get you to look at a business plan if they don’t know anyone in your network (e.g. outside Silicon Valley elite, didn’t go to Stanford)?

At the roundtable:

- Prashant Shah, Managing Director at Hummer Winblad
- Ajit Nazre, Kleiner Perkins
- Anil Patel, Principal at Clearstone Venture Partners
- Ravi Mohan, co-founder of Shasta Ventures

Prashant Shah, Managing Director at Hummer Winblad

1) What is the best pitch meeting that you remember and why?

The best pitch meetings are those that have real technology breakthroughs applied to solving large and growing problems. For example, Voltage Security showed us how the information encryption market could be cracked wide open by their Identity Based Encryption (IBE). Or, Move Networks’ adaptive HD streaming technology enables economical long form online video. Both of these companies first explained how underlying technology trends were creating new markets – the increase of data theft and the shift to online video. And both had solutions based on hard-to-copy technology. Combined with teams who were passionate and had relevant experience, these were pitches to remember.

2) What are the most common mistakes or assumptions smart founders make in pitch meetings with VCs?

The biggest mistake is when entrepreneurs pitch to us as if we’re customers instead of investors.

It’s nice to see a demo, but we don’t want to dive into every feature. As investors, we want a clear picture of the business, not the product. What’s important is not how great your product is, but why customers will spend money on it.

And, just as important, why will they not spend money on something else. There’s a subtle but important distinction there. For example, it’s straightforward to explain why your killer feature will drive more sales of your disaster recovery solution than your competitors. But, can you also explain why customers will spend more money on disaster recovery in the first place rather than basic backup, or security, or doing nothing at all? Or, to look at it a different way, you wouldn’t recommend buying Apple stock because the iPhone doubles as a music player, has a touch screen, is wi-fi enabled, comes in a different colors, includes a speakerphone, and so on. Instead, you would recommend their stock because they have a dominant share, great management, and the market is still not saturated.

The second biggest mistake is having too many slides. This sounds like a tactical error, but is in fact a strategic one. Too many slides means you can’t explain the value proposition of the investment succinctly. You only need 10 to 12 slides. Having more than this means you’re trying to close the deal on the spot. It doesn’t work that way. The goal of any meeting should be to get to the next meeting. If you have an urge to thicken the deck, pick out a dozen slides to tell the story and hide the rest as backup.

Other common mistakes:

- Spending too much time on the team slide. We want your background, not your biography. Don’t need more than two or three minutes of the team’s highlights.

- Within the first 15 minutes, you should have described the problem you’re solving and how you’re solving it. And by first 15 minutes, I mean from the time we say hello, not from slide 1.

- Lack of understanding the numbers. Many founders ask part-time CFO’s to help with the financial model. That’s OK. But as founders, you still need to own the numbers. If you’re a SaaS company, do you know your assumptions on Annual Contract Value? MRR? Churn? Renewal rates? And all companies should know their hiring plan.

Less common mistakes, but they happen:

- Being rude to the receptionist
– Slides showing another VC’s name
– Laptop fails and you can’t explain your business without slides
– Running late but failing to give a quick call to let us know

3) What unfavorable terms do founders often miss or underestimate in term sheets?

It’s not so much that founders miss “unfavorable” terms, rather that they pay too much attention to valuation. Getting the best valuation should not be the goal. You need to look at the terms holistically. What are the liquidation preferences? Who has what control to do what? Create a spreadsheet that shows exit analysis. How would proceeds be distributed at exits of $5M? $20M? $50M? This will tell you what price you need to sell at to make money. If a company IPO’s, everyone’s happy. But most don’t make it that far. And as you take on additional rounds of financing, the exit scenarios get complicated. Different series of investors will have different valuations at which to sell.

4) How can someone get you to look at a business plan if they don’t know anyone in your network (e.g. outside Silicon Valley elite, didn’t go to Stanford)? If the answer is emailing a general email address, how can someone really stand out make it to round 2?

At Hummer Winblad we do actually look at all the plans submitted to us. We are fine with people contacting us directly. We are also active in our own outreach. You can frequently find us speaking at events by TiE, Astia, SDForum and other groups. We enjoy meeting entrepreneurs at these organizations.

5) Are you more interested in huge traction often lacking a well-defined rev model or start-ups who hit breakeven quickly and show the ability to scale but not nearly as quickly? Either type of growth often requires fundamentally different decisions early on — how should companies decide which is best for them?

We want huge traction and a revenue model! But we’ll settle for a revenue model and a game plan for huge traction. In our focus area of infrastructure and enterprise software, it’s very important to understand how much customers are willing to pay. Also important to understand why they’re willing to pay that – what’s their ROI as calculated by them?

Ajit Nazre, Kleiner Perkins

1. What is the best pitch meeting that you remember and why?

Virsa was the best pitch meeting I had in the six years I have been at KPCB. After the first introductory slide Jasvir Gill, the CEO and founder jumped straight to a demo and wanted to show us the product without the typical team, market, etc. etc. He had a real product with real customers and he was proud to show that. That impressed me more than the sophisticated pitches which are high on buzzwords and low on facts and substance.

2. What are the most common mistakes or assumptions smart founders make in pitch meetings with VCs?

Here are common mistakes that founders make while pitching to VCs:

-Most founders don’t want to list a single risk in the business (where as VCs want to know what the risks are and how they can be surmounted)

-Most founders completely undermine and/or downplay competition (competition is good – it legitimizes a market)

-There is no clear ask (VCs want to know what the founder wants in terms of financing)

-Founders dumb down the pitch to make it more businesslike and fail to mention what their key tech assets are

-Smart founders forget that they typically know more about the domain than VCs do and don’t take time to share their knowledge and insights that would impress the VCs

3. What unfavorable terms do founders often miss or underestimate in term sheets?

Smart and experienced founders don’t miss much. They have good advisors and lawyers who have mentored them well.

4. How can someone get you to look at a business plan if they don’t know anyone in your network (e.g. outside Silicon Valley elite, didn’t go to Stanford)? If the answer is emailing a general email address, how can someone really stand out make it to round 2?

Make unbelievable claims that will grab my attention. Keep the email as short and to the point as possible so that it is easy to understand what the pitch is.

5. Are you more interested in huge traction often lacking a well-defined rev model or start-ups who hit breakeven quickly and show the ability to scale but not nearly as quickly? Either type of growth often requires fundamentally different decisions early on — how should companies decide which is best for them?

Consumer internet or consumer mobile companies without traction are hard to evaluate because the main risk they have is consumer traction. That is not the case with semiconductor, cleantech and enterprise software companies.

6) Government policy is a force for every clean tech company – how are you weighing the risk/opp?

It is both a risk and an opportunity: Risk because the stimulus tide will lift all boats (good and bad) and an opportunity because in a credit strapped market, having loan guarantees or grants can be a huge strategic advantage for a company.

7) How are you factoring government sales and stimulus funds into your evaluations of start-ups (it used to be gov’t rev=0 value)?

Government revenue is still not valued but government grants and loan guarantees are.

Anil Patel, Principal at Clearstone Venture Partners

1. What is the best pitch meeting that you remember and why?

For early stage companies (where you are not pitching demonstrated revenue growth), good pitches rely on either a compelling entrepreneur or a compelling idea. Great pitches rely on both. Notice that I didn’t mention technology – great technology only works if it’s in service of the compelling idea.

A great pitch I heard recently was an ambitious combination of online and offline entertainment. The founding team was composed of one star in each of these categories. They showed their background in entertainment by pitching a storyline, much as a movie would be pitched, as part of their company presentation. Even beyond the storyline, the idea had unique qualities – I had never heard it before, and I know that the likelihood of someone else coming in to pitch this idea at Clearstone next week is pretty close to zero. The team described the risks realistically and didn’t try to hide them, which demonstrates maturity and thoughtfulness. I loved the ambition and the leadership qualities of the founders.

2. What are the most common mistakes or assumptions smart founders make in pitch meetings with VCs?

One of the most common assumptions by founders that I see in pitch meetings is that they have to have all the answers. We know there is uncertainty and risk in your plan – if there weren’t, venture capitalists wouldn’t be in business. The important thing is to define where you think the risks lie and why the potential reward is large enough to justify taking the risks. When you’re answering a question in a pitch meeting, be aware that the investor usually asks a question for two reasons: first, to get an answer and second (and often more importantly) to see how you think.

One more word to the wise: Avoid telling a potential investor that your revenue projections are “conservative”. Of all the early-stage companies that have presented so-called “conservative” financial projections, I’ve seen less than 5% hit their numbers. Supporting your projections with key assumptions and stating why they are “achievable” is far more credible.

3. What unfavorable terms do founders often miss or underestimate in term sheets?

Entrepreneurs will almost always have their attorneys looking at term sheets (often the same attorneys that VCs use on other similar transactions). I don’t see too many missed “tricks” on venture term sheets. As a former attorney who has represented both entrepreneurs and investors, I like to construct term sheets that don’t have any traps for the unwary. It’s certainly better for building trust with your investor if that’s the case.

That being said, the most common mistake I see from entrepreneurs on terms is going through unnatural acts to avoid dilution.

When you make valuation (and therefore dilution) your sole priority, other unfriendly terms can slide in. For example, I had an entrepreneur propose that I invest at a higher valuation, with a downward price adjustment if certain milestones weren’t hit. You do not want to have this kind of misalignment of incentives, where your investor might be hoping that he or she gets more ownership if the company doesn’t do quite so well. Similarly, entrepreneurs will sometimes try to grossly undersize an option pool or grant, thinking that it preserves their personal ownership percentage. Often, this disparity ends up sending a negative signal to the best talent that the company is trying to recruit. Finally, the more that an entrepreneur tries to push valuation up beyond a reasonable range, the greater the chance that an investor will want to insist on less friendly terms elsewhere (for example, on liquidation preference) to compensate.

4. How can someone get you to look at a business plan if they don’t know anyone in your network (e.g. outside Silicon Valley elite, didn’t go to Stanford)? If the answer is emailing a general email address, how can someone really stand out make it to round 2?

With the advent of tools like LinkedIn and other networking sites, you don’t have to be a member of the Silicon Valley elite or a Stanford alumnus to connect with a venture capitalist. Throwing a business plan over the transom and into the general email box puts you in a very noisy place. On the other hand, spending some time to navigate any relationships you might have to get some sort of warm introduction is worthwhile and shows the kind of scrappiness that venture capitalists admire. If that approach is not fruitful, find out what organizations the VC is involved with (for example, TiE or VCNetwork, or an industry group around Cleantech), and attend an event at which he or she is speaking.

5. Are you more interested in huge traction often lacking a well-defined rev model or start-ups who hit breakeven quickly and show the ability to scale but not nearly as quickly? Either type of growth often requires fundamentally different decisions early on — how should companies decide which is best for them?

An entrepreneur should have a reasonably crisp idea of what he or she is trying to build and what success would look like. (This will often change over time, but targets are important). If it is a media property, I have no problem with building an audience in advance of monetization. Many companies that are fundamentally about a new form of consumer communication (e.g. Skype, YouTube, MySpace) have achieved impressive outcomes far in advance of having impressive revenues because they were acquired by companies with established business models that were seeking audience and had the potential to capitalize on new consumer behaviors. This is the likely path for Twitter as well. But, even if it happens later, the entrepreneur should have a plan to scale revenue profitably and exist as a standalone company, because you can’t count on an acquisition happening at just the right time. Your investors should be on board with how much capital may be required to get to this point, because the financial risk could be high.

6) Government policy is a force for every clean tech company – how are you weighing the risk/opp?

I would distinguish between government sales and stimulus dollars. Stimulus money may benefit a company in the form of tax incentives or cheap capital. It may or may not create or subsidize government sales. Taking advantage of stimulus money will require some planning and a lot of tactical work, as the dollars may be unlocked from a variety of places, from federal agencies to state budgets. We know that the recent federal stimulus package has been a boon for lobbyists, and the savvy company targeting significant stimulus funds will hire a dedicated resource to manage government relations and any external lobbyists or consultants that the company engages.

7) How are you factoring government sales and stimulus funds into your evaluations of start-ups (it used to be gov’t rev=0 value)?

Government sales can be difficult to achieve, especially for a smaller vendor, but many companies have very successful operations that rely on continued federal or state government customers, often working with established channel partners with significant experience in this area. We have companies in our portfolio that have been successful in selling to government customers, and I certainly don’t think that those sales are worth zero. The real question is how repeatable the sale is and how much time and money could be spent in trying to close a sale. Specific expertise and deep contacts are even more valuable for government sales than for the typical large customer sale, so hire accordingly.

Ravi Mohan, co-founder of Shasta Ventures

1) What is the best pitch meeting that you remember and why?

I invested in a company going after mobile identity protection and the pitch meeting was the best because the service concept made intuitive sense, the service was validated by a major customer win, the market was large with proof points of successful outcomes [e.g. IPOs, acquisitions], the service was hard to pull off because of the relationships needed to be built with carriers, and the team had the experience of working with carriers to be successful. Despite the huge risks of working with carriers, it was a bet worth making because the team had the skills to potentially succeed and if they succeeded the outcome was large.

2) What are the most common mistakes or assumptions smart founders make in pitch meetings with VCs?

Not answering the question directly and simply. Once a VC asks a question, it is incumbent on the entrepreneur to answer it. They need to give a precise and short answer and keep moving through the presentation so that they tell the full story.

Do not give the stock answer to the CEO question as “I will do what’s right for the company” the second after the questions is asked. Engage in a dialogue and use it to see if you want to work with the VC.

3) What unfavorable terms do founders often miss or underestimate in term sheets?

I think that founders with good legal representation do not miss terms anymore, at times they are fixated on the face value of the pre-money and do not look at the terms of the financial instrument – Participating Preferred – but with good legal help they quickly understand the significance.

4) How can someone get you to look at a business plan if they don’t know anyone in your network (e.g. outside Silicon Valley elite, didn’t go to Stanford)? If the answer is emailing a general email address, how can someone really stand out make it to round 2?

Have some company building success, to get attention for your company. Get some PR to make it on VentureWire, Tech Crunch, etc. and then email and call the venture firm.

5) Are you more interested in huge traction often lacking a well-defined rev model or start-ups who hit breakeven quickly and show the ability to scale but not nearly as quickly? Either type of growth often requires fundamentally different decisions early on — how should companies decide which is best for them?

We are looking for an understanding of a customer and their problem with a service that solves their pain and the potential of a business model to monetize the customer base. The monetization model needs to at least result in a $100M revenue business growing at 20%-30% with strong EBITDA margins.

###

TiE’s annual conference on entrepreneurship (TiECON 2009) is May 15 and 16 and is completely focused on how to create tech start-ups that succeed in the current economic climate. I don’t endorse events often, but — if you are near the San Francisco area — you should take a look at the list of all-star speakers (Reid Hoffman and others) and attendees and consider the agenda. For founders and CEOs, I believe it to be a worthwhile investment.

Posted on: April 20, 2008.

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40 comments on “Is Venture Capitalism Dead? Not Yet. Advice from Kleiner Perkins, Hummer Winblad, Shasta Ventures, and Clearstone Venture Partners

  1. The timing of this article is great. I'm meeting with a VC at lunch today. Learning from previous mistakes & taking points from this article my pitch will be made with minimum visual aides and a couple of brief points.

    Like

  2. Hey Tim,

    Great post on V.C.'s my friend Donnie Deutsch had a TV show on CNBC (which just got canceled) called the Big Idea (oh yeah- you were on it:) where they would actually put people in an elevator and film the pitch to the V.C. The person would have about 60 seconds to take their best shot at getting the V.C.s attention. Once the elevator doors opened it was over. They could have definitely used this post for guidance :)

    Be Well,
    Rob

    Like

  3. Very nice post. One of the best I have seen here in a while. I see people making many of the mistakes you outlined daily in my business.

    Are you planning on heading out to BRC this year? I just got my ticket. I know you tend to go a bit incognito there, but I would like to buy you a PBR if you make it.

    Like

  4. I believe one of the main ingredients in you're pitching is enthusiasm/passion. Many VC's and founders hear a no before they get their yes.

    If you are passionate about something, you'll be persistent, and as Dan Pink writes in the book Johnny Bunko (in the rules of your career), persistence trumps talent.

    Great post, excellent questions/comments/panelists. Lots of great knowledge shared.

    Like

  5. Great, varied answers – just goes to show that everyone is different and there is no 1-2-3 way of doing things.

    There are a few base rules that reoccur through the answers which are great, thanks for this tim!

    Ryan

    Like

  6. If you're an entrepreneur in america, you don't care about Venture Capitalists. They became obsolete in the mid 1990s. You don't need their funding and they WILL ruin your company.

    The best advice one could give to any entreprenuer who needs it– eg: one who is not experienced enough to skip this posting just by seeing the title is this: Don't fall for the hype. You'll never see an honest take on venture capitalists online, all you'll see are puff pieces and self aggrandizement like this article.

    Venture Capitalists don't know what they are doing. Seriously, they are used car salesman, only they are selling you cash at the cost of equity.

    They will come in and ruin your company– I've seen them force bad technological decisions on companies, I've seen them force a company to spend most of their investment on the products of another company they had also invested in.

    And, quite frankly, they don't know what they are doing. (Otherwise they would be doing it.)

    There''s this culture of wealth that assumes that these people are some how “the best and the brightest”…. largely this is a result of the free PR they get from firms that want them to hook them up with their portfolio companies.

    Have you ever seen a term sheet? These people are not smart, they are not the “Best” they are ruthless and they are scamming people. IF you don't believe me, you will if you ever read a term sheet in detail.

    You'd be better off going to a bank. Because, really, you don't need that level of capital anyway, these days.

    Everything a business needs it can rent and pay for out of current revenues. All you need to put up is the first server and produce the product.

    But unfortunately people have got it in their head that its cool to be “funded” and that you need funding to succeed…. when the reality is they will force you to bet your business on achieving a $1B valuation in 5 years.

    The smart money is on getting a $100M valuation in 5 years and a very profitable business.

    The reason is the chances of you hitting $1B are astronomical (and when you don't they pull the plug)…. but the chances of hitting $100M are not that bad. Certainly by comparison.

    Its just amazing that for the thousands of article written, nobody ever tells the truth about VC firms, talks about how they were screwed over, etc.

    This is because people are addicted to the funding and they are afraid they might not get it if they tell the truth.

    Like

  7. Interesting article Tim, but it puzzles me why Venture Capital news interests you – surely it involves giving away too much control of the business and defeats the point of autonomous managment?

    Like

  8. Are there VC companies looking for smaller investments and/or “not tech” investments?

    These were looking at $100M plus revenue, and either major entertainment or tech.

    Great info. Smaller scale VC companies will fit more of your readers, however.

    Like

  9. Awesome post. It is great to see you have the foresight and initiative to cover such a diversity of topics. I keep looking for chinks in your armor Tim, but you keep on impressing.

    I think it is also important to point out that most start ups, shouldn't or can't get venture capital. So much can be accomplished with a good idea, a talented team and a lot of hard work. Don't waste your valuable time chasing financing if you don't really need it.

    That time spent looking for money can be better invested in getting customers for your new business.

    Still, thanks for the post! It was very interesting and informative.

    Like

  10. I would argue that now is a better time to be a high tech entrepreneur than ever before. With social networking exploding as it is, it's much easier to find advice, money, and customers than even in the height of the dot-com bubble. Perhaps yogafordogs.com isn't going to get funding, but those with real innovation have much better odds.

    Great stuff as always Tim!

    Like

  11. VCs have a limited role to play in businesses where resources are not crucial to scaling but for many kinds of businesses someone needs to be able to allocate resources.

    This is often forgotten when discussing tech companies because there are cases when it is possible to opt out funding almost completely.

    Like

  12. Hey Tim,

    This is an awesome reference, I love trying to see things the way an investor would. I can see myself making a few of the common mistakes they mention (downplay risks, say projections are “conservative”, etc.)

    That being said, it seems your posts have been leaning away from bootstrapped muse-building to capital-intensive startups (more mentions of angels/VCs). Have your interests/techniques changed? Or is oriented towards those with a muse already built?

    Thanks, and great stuff as always.

    Like

  13. I think you have some excellent points, William, and some wild hyperbole.

    It is absurd to argue these guys aren't smart, or impressive. Thats exactly why they can do what they do. VC's I have met are almost uniformly: male, handsome, fit, polished, affable, extremely bright, and graduates of the top two or three top MBA programs — these highly coveted jobs are exceedingly difficult to get and select exclusively for alpha males. They are the guy Ray Davies described in the song “David Watts” — the quarterback and class president rolled into one. At some primal level, we really want them to like us.

    But it is also true that VC's are practiced liars — they make their money on selling you on their passion and enthusiasm, but then they take a very dispassionate and ruthless view of the business realities.

    That is where the resentment comes from — We want them to like us, they select for entrepreneurs that will trust them, and then they push us into situations that will maximize their return, but not necessarily ours.

    It is a very different relationship from, say, a dispassionate bank loan.

    Your advice, however, is good. If you have a very big idea and don't mind losing control, consider a VC.
    But if you want control, seek smaller ideas and other avenues for finance. Your odds are about the same, and you can get rich either way, but the latter path is far more personally satisfying.

    Like

  14. @Tim-

    It sounds unanimous that with a good lawyer you shouldn't miss terms. I'd like to hear/learn more about selecting a good lawyer and at what stage of the process this is most appropriate.

    Also, how to get good legal representation on the cheap? Never easy.

    Cheers,
    Ryan

    Like

  15. This post brings up the age old argument every entrepreneur has in his/her head before starting a business (or “Venture”, as it seems were calling it now):

    Venture Backed Business vs. Lifestyle Business

    On the Venture side, you've got a possible $20 million+ payday after 3 or 4 years or mind numbing, 100 hour per week work. On the “Lifestyle Business” side, you've got the potential for a steady 40k+ per month, but with the downside of having to bootstrap everything.

    Decisions, Decisions…

    Like

  16. This article had a lot of great insight into funding and the inner workings of those mysterious VC minds.

    I myself am looking for funding and would like to pose a question to one and all. My small real estate business (I know, I know), with a technology advantage, is looking for $70,000 in start up capital. Currently, I am self-funded with about $30,000 already in the pot. I have exceptional credit, a few investments, and would be willing to personally guarantee the debt.

    What financing ideas would you suggest to reach my desire $70,000 outcome?

    Thanks in advance for any suggestions and happy Patriots' Day from Boston, MA.

    Like

  17. Good solid information. This is the kind of perspective so many lifestyle business investors need to free up time and still generate a great passive income. Plus it can be very stimulating.

    Like

  18. Great article Tim. One thing I'd point out from my entrepreneurial experience is to make sure you have strong, well-connected advisors/angels prior to going the VC route. VC's are looking for validation. They need to separate you from the myriad of folks hitting them with various messages.

    I've found it even more important than anything you do or say during the pitch meeting.

    As they mentioned, TiEcon (http://www.tiecon.org) is a great way to get yourself into that network. People there are looking to find the next amazing startup and can help you hone your story and find you connections. I've also found some of the Bschool alumni networks to be helpful.

    One way or another, get yourself some well-connected folks who believe in your story.

    Like

  19. We want more language learning!!! Deutsch, Español, English, whatever.

    But I like your business posts. They help fund dreamlines. =)

    Thanks Tim

    P.D. I am reading Seneca.

    Like

  20. Very important post. Too many people think that the economic troubles facing the world mean they missed their shot at starting a business.

    Like

  21. Tim,
    When trying to create a muse, i used all your steps and had a really time creating something for the groups and markets I am familiar with, however I noticed when I thought about other markets I had more ideas. After doing some analyzing, I decided that this was caused by the anxiety you feel when thinking of groups you belong to, because you want to be accepted by them. When thinking of groups you are not on a personal level with you have less fear and thus don't shoot down your own ideas so quickly. If this makes any sense to anyone feel free to message me.

    Like

  22. @William
    Agree 100%, VC stands for “Vulture Capital”.
    Not to say one shouldn't look for outside investment, but the VC route is one of the worst.

    Like

  23. Just leaving a comment as you suggested on twitter. By the way love the twitter background, I'm Greek…good job learning Greek as well.

    PS…read the book, love it and am testing, using adwords, a new Greek guide thats very specific to one group of people. Getting about 50+ clicks a day, now just tweaking it then will roll out real site and produce some audio CD's. Thanks for the advice.

    Email me if you want to hear more about it.

    Like

  24. Hey Tim,

    That krumping was hot, it’s cool that you dig that and I wouldn’t be surprised if you could pull that off. Plus, that video on outsourcing was a hoot, thanks! I definitely applaud the guy who went overseas for a year (Twitter- Naked in Dangerous Places)… I actually thought he was naked in dangerous places and lived to tell his story before I saw the video.

    Like

  25. Awesome questions Tim. One way I learn from other people’s mistakes/accomplishments for VC pitches is by watching the UK TV show- “Dragon’s Den” (entrepreneurs pitch for an investment to capitalists willing to invest their own money). Here is the website, it’s very amusing.

    http://www.bbc.co.uk/dragonsden/

    Like

  26. Hey Tim,

    Kindly explain all the enhancements to the blog? Are there more changes to come? I ask because the changes are pretty radical and interesting.

    Like

  27. There must be some good VC firms, but the basic question is “Why”? Why borrow money from people so obviously interested in playing long odds on a diversified basis in order to score a couple of home runs? It's dumb math, like playing lotto, both for the VCs and the entrepreneurs.

    If VC really worked, why are so many firms among the “walking dead”?
    Check this out: http://venturebeat.com/2009/04/13/venture-capit

    It's such a weird idea that creation can be juiced with money. Companies are requesting cash well before they really need the capital.

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  28. the VC business has been dead for years and this recession put a final nail in their coffin. VC’s have no creativity, and good luck on getting favorable terms if you get one to actually invest a bit. Bootstrap is the only way to go.

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  29. @Robert Murgatroyd

    I did a pitch in an elevator well a lift actually – I’m a brit :-)
    It was kinda fun – judge for yourself.

    For me the biggest mistake was not to do my research on what a particular fund could offer. If a fund specializes in a particular size of deal and a specific area you need to be pretty sure you fit the profile, or have a reason to think they will bend the rules for you.

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