17th level Hacker

Art of the Start 8

Funding Your Dream

Moderator - Mohanjit Jolly

Steve Baloff, Advanced Technology Ventures; Bill Green, VantagePoint Venture Partners; Martin Kuhn, Sony; Steve Jurvetson, Draper Fisher Jurvetson; Ian Sobieski, Band of Angels

Q - What is the process to connect with your firm?

Steve - If you don’t know people within the community you should be able find a referral.

Bill - There is a huge amount of info that goes thru the VCs, you need to be able to win the “30 second beauty test”. Try to do something to differentiate yourself.

Martin - Many times they contact businesses. If you have something interesting within electronics, just mail him.

Steve J - They look at as much as they can, they would like to see even more. The drag the net thru the pool to see what they can find. Gives them a good metaview, how many companies there are in certain areas. You need a concise and direct pitch to appeal to him, otherwise there just isn’t time to review it all.

Ian - They screen through unsolicited stuff, but normally it’s through a referral. That person often serves as an internal advocate.

Summary - You have to compete for attention, tap your network.

Q - You need money to make your company interesting. How would a first timer start up and make themselves interesting.

Steve J - Software is something you can start without capital, but most everything else needs to be built out or bootstrapped in some way. You can build a great team to appeal to investors, if you can. Bootstrap is great if you can do it, but doesn’t fit all industries.

Steve - Looks for the team, is this person able to put together a team willing to follow the vision.

Ian - There’s a lot to be said for building a career as an entrapreneur. You don’t have to knock it out of the park the first time. If you’re in the game, people are more likely to bet on you down the line.

Q - Is an idea good enogh, or do you need a prototype?

Martin - depends on the business unit on Sony. Has helped very bare and unexperienced teams find people within Sony to get up and going.

Q - Being a large fund, how do you fund seed stage?

Bill - The partners have some freedom to deal with situations like that. Mostly that’s gated by wanting to invest a lot relatively soon.

Steve - its more about the time than the money. If someone tells you they’re funding a lot of seed, they can’t be spending lots of time with each. If you need lots of attention, the person with lots of deals might not be the person for you.

Q - How you you pick companies if the market they’re in isn’t formed yet?

Ian - That’s why it’s called venture. You just do the best you can, and maybe hope you’re lucky.

Steve J - The big danger for them today seems to be being too early. Lots of areas everyone knows will be big, but there’s no agreement over when it’ll be big.

Q - Whats a pet peev?

Martin - Be short and concise, what is the technology.

Steve - entrapeneurs don’t follow thru, qualify who you’re leads, what are they looking for. You should be in a selling mode, you need to close the VC.

Bill - Figure out what is the preferred method and volume of communication. VCs have limited bandwidth.

Steve J - There needs to be a willingness to follow a nonlinear conversation. Unwillingness to diverge from the script send a signal of inflexability and lack of confidence.

Ian - Issues writing the deal terms are annoying. Its hard to make money in an area where 9 out of 10 fail. You really have to make it up in the one that works, and investors need to make their money.

Q from audience - should you go to funds that funded competitors if you think you have a better tech.

Steve J - Go to someone else, most VCs don’t like to invest in companies that are too closely related (otherwise they might not know where to hand off contacts or resumes).