Archive for the ‘VC’ Category

Post Author: Ben Yoskovitz his Blog
Here I refers to Author.

I was very glad to see that someone recorded the recent Blitzweekend presentations. Stephane Daury did a great job recording everything, and I’ve enjoyed watching the presentations I didn’t see.

I gave a presentation at Blitzweekend about starting a company. It was a mixture of a few things including:

The presentation is a bit longer than I intended it to be, but I’m pleased with the results. A bit more practice would have helped, and more point form notes instead of what I had written up to use. But I hope people enjoyed the presentation and got something out of it. Anyone?

Anyway, if you’re interested in learning more about Standout Jobs, where it came from and some of the lessons learned so far (and you want to see me “in action” – after all, who wouldn’t?!?!) please check out the presentation and let me know what you think.

Pic From


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Article Author: Greg Linden founder of Findory

We will see a dot-com crash in 2008. It will be more prolonged and deeper than the crash of 2000 .The crash will be driven by a recession and prolonged slow growth in the US. Global investment capital will flee to quality, ending the speculative dumping of cash on Web 2.0 startups.

Venture capital firms will seek to limit their losses by forcing many of their portfolio companies to liquidate or seek a buyout. Buyout prospects will be poor, however, as the cash rich companies find themselves in a buyers market and let those seeking a savior come face-to-face with the spectre of bankruptcy before finally buying up the assets on the cheap.

Startups that managed to get cash before the bubble collapses will have a cash horde, but will find little opportunity to rest on it. Most startups will find their revenue models were unrealistic and will rapidly have to seek change. Many will jump over to advertising, but the advertising market will have constricted. Bigger businesses will seek to drive out the new entrants, and online advertising will become a cutthroat business with little profits to be found. Others startups may shift toward licensing and development deals for bigger companies, but will find their investors impatient now that the promised $500M startup has become a $10M company.

The big players will not be immune from this contagion. Google, in particular, will find its one-trick pony lame, with the advertising market suddenly stagnant or contracting and substantial new competition. The desperate competition with dwindling opportunity will drive profits in online advertising to near zero.

Google and Yahoo will find their available cash dropping and will do substantial layoffs.


Unfortunately, this scenario has privacy implications as well. Much like we saw after the 2000 crash, it is likely that those with little to lose will attempt scary new forms of advertising. The Web will become polluted with spyware, intrusiveness, and horrible annoyances. None of this will work, of course, and there will be lawsuits and new privacy legislation, but we will have to endure it while it lasts.

It is a dire scenario, but one that looks much like what we saw after 2000. That was a much smaller crash without the fuel from broader problems in the US economy, but we still had investment capital shut off for a few years, most startups shut down, and the remaining startups shift business models. We also saw a dramatic rise in pop-up advertising and spyware.

The crash of 2008 will be similar to 2000 but deeper. We all will have to weather the storm. Source.

You can Download [as pdf] the Full Fledged Report on Net by J P Morgan.

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Roelof Botha played an integral part in the building of two of the most successful Internet companies of all time: YouTube and PayPal. The 33-year-old venture capitalist made a fast fortune for Sequoia Capital on Google’s $1.65 billion acquisition of YouTube; eBay bought PayPal, where Botha was chief financial officer, for $1.5 billion in 2002. Newer investments include AdBrite, Insider Pages, Meebo, Xoom and Zappos.

Botha has learned a few tricks to boost consumer adoption–all without spending gobs on advertising. A sampling:

Get Viral

Many people think the word “viral” is interchangeable with “word of mouth”–implying that the product or service is so good that people are compelled to talk it up with their friends. But there’s more to it than that. Google (nasdaq: GOOG news people ) and Amazon.com (nasdaq: AMZN news people ) are both great Internet companies, but they aren’t viral businesses.

“Word of mouth is when I tell you to shop on Zappos because I think the service is great,” explains Botha. “It becomes viral when you have to be ‘in the system’ to use it. For example I can post a video on YouTube but then you would need to go to the site in order to see it.”

A truly viral business is “like a disease,” says Botha. “It needs to be transmitted from one person to another”–and the other person has to catch it. Once the next person catches it, he or she becomes a carrier too. Here are some good examples:

PayPal. If Bob sends Mary $25, Mary has to join PayPal in order to claim her money.

Evite. John e-mails you an invitation to his bachelor party but in order to read the details such as when and where, and to RSVP, you have to log onto Evite. E-card vendors work the same way.

Plaxo. A friend or business associate sends you an e-mail asking you to update your contact information. Once you log onto Plaxo to correct your phone number, you’ve caught the virus. Other services such as Birthday Alarm use the same strategy.

Skype. In the beginning, the only way you could make a free phone call over Skype’s Internet voice service was if the person you were calling was also a Skype member.

Like Botha, the founders of YouTube are alumni of PayPal. When they started YouTube they knew they wanted to replicate the same viral e-mail strategy to attract new viewers. That’s why the founding engineers designed all YouTube links to be super short–never longer than one line. The logic: When you e-mail grandma to show off clips of your baby’s first steps, long links tend to wrap around and get cut off. Broken links are a sure-fire way to frustrate potential customers and keep them from coming to your Web site.

“E-mail was the primary way YouTube grew its user base,” says Botha. “People would find interesting videos on the site, then copy and paste links in e-mails to their friends.”

Forget about adding “viral” to your marketing to-do list after your product is already on the market. You need to bake it into your business model from the very beginning. “Viral isn’t something you can just make happen,” says Botha. “It has to be inherent in your product.”

Article Credit: Erika Brown is with the Silicon Valley Bureau, Forbes. You can read the rest of this article Here.

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Google (GOOG) has begun making VC-style investments to the tune of about $500,000 or less in promising startups, often buying those companies afterward, according to partners at Silicon Valley VC firms who spoke on condition of anonymity. In an effort to keep spotting promising deals, Google has been hiring a stable of finance pros. And it has invested more than $1 million in a Mumbai-based investment firm called Seedfund to gain access to technology such as automatic translation software that could help spur growth in India.


Beating VCs to the Punch

By staking startups, Google hopes to avoid paying the higher prices companies can fetch once they take funding from traditional VCs. It’s possible that some of its investments are conditioned on Google having first-acquisition rights should a target opt to sell, some VCs speculate. Google didn’t respond to calls requesting comment. Making investments in startups also can help Google use more of its $4.5 billion in cash to cultivate tools that complement existing products. Google recently started a program called Gadget Ventures to fund entrepreneurs who build online tools using Google’s technology.



VCs Seek Alternative Sources

The incursions don’t sit well with many VCs. Combined with the predilection on the part of many entrepreneurs to fund their own ventures, investments by Google and other corporations leave even fewer opportunities for VCs to take big, early stakes. That’s especially problematic when venture firms have raised record amounts of cash and need to find places to invest it (see BusinessWeek.com, 2/5/07, “Venture Capital’s Growing Aspirations”).


Thanks Allen for sharing the good link.


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Balaji Srinivas, Aureos Capital
Balaji SrinivasI would back a first time entrepreneur. But today my first time entrepreneurs are different: they have substantial experience.They are not figuring out their businesses; they are figuring our whether their company will succeed, because they know their business.

I’m not willing to live with the other option, which is: I don’t know what I’m doing but I will figure it out. That is not acceptable to me.

Today what is acceptable to me is: I know my business and I have done this for X number of years, and now I have this idea which is the extension of this business. I don’t know whether it will work or not, but I know the big picture, and I know that I have all the elements. This is what I back today.

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Alok Mittal, Canaan Partners
Alok Mittal40% of our business in the US comes from repeat entrepreneurs. People who have worked with us before like the experience. This implies that the larger part comes from people who are first time entrepreneurs.And we’re very open to backing first time entrepreneurs in the Indian context. Here you see more first time entrepreneurs than in the West simply because the whole model of building a fast-growing enterprise and then exiting is fairly new.
Avnish Bajaj, Matrix Partners:
Avnish BajajI was a first time entrepreneur when I got funded by ChrysCapital. I don’t think the issue is first time entrepreneurs. In fact, if you look at some of the world’s most successful entrepreneurs, they are all first time entrepreneurs: Bill Gates, Steve Jobs, Larry Ellison.Indeed, if you look at the track records of entrepreneurs who have succeeded in their first venture, they typically don’t succeed after that.

In four Interactive, we backed two people and a business plan. One of those guys has been an entrepreneur before, but the other guy hasn’t. The guy who has been an entrepreneur before, started his company in 99-2000 and didn’t have a great experience, because by that time the bubble burst.

But we felt that they really knew what they were going to be doing about the market opportunity, so we backed them.

So yes, absolutely we would look to back first time entrepreneurs. I think it comes back to whether they have a track record of achievement in their lives. It doesn’t have to be as an entrepreneur.


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VC Dont Sign

Question: I have heard many times that VCs won’t sign NDAs. When I ask why this is, I’m told that reputable VCs won’t share my ideas with others and/or that my ideas aren’t so special or revolutionary that they would be stolen.

In the real world, VCs talk, they look at many deals, they network, etc. I would think in the real world information gets transferred whether maliciously or not.

I am interested on the true facts about this. Additionally, if a VC already has one company in a space and another company approaches them that is doing something novel and interesting in that same space, what happens?

VC Answer: You are correct – VCs don’t sign NDAs. It’s not that we are trying to pull a “fast one” or do anything nefarious, rather in today’s over-litigious world, it is a necessary protection. The hypothetical VCs worry about is the case where 2 years ago Brad meets an entrepreneur, he signs a NDA on behalf of our firm and he takes a quick look at the business plan. He decides that the deal isn’t for us and we don’t invest. Today, I meet someone different, doing something in a similar space and our firm decides to invest. Despite the fact that Brad doesn’t even remember the plan from 2 years ago (remember, we get a ton of plans over time) and I never saw the first plan, the original entrepreneur sues us, assuming that we must have stolen his idea, when in fact this is not the case.


What does happen quite often is that we get a business plan from a company doing something similar to what one of our portfolio investments does. In this case, as soon as I realize this, I stop reading and let the entrepreneur know that we have a similar company and that I’m destroying his plan. The key here is being completely transparent and open.


One more thing: We get tons of unsolicited business plans that are marked “confidential.” Keep in mind that you can’t impose a duty of confidentiality sending something unsolicited.


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Sanjay Anandaram is a passionate advocate of entrepreneurship in India. He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship.


Sanjay Given Me Full-Fledged articles, when he replied back to my mail for the Excellent Article on Business Gyan, about Entrepreneurship to Distribute to Passionate Entrepreneurs.


He has written about Excellent 19 articles from his 18 years of industry experience including significant international experience involving new business creation and business development in India, US, Asia, Middle-East and Africa. He has been involved with cross-border international business development, technology development & deployment, sales, and investments since 1991. Prior to founding JumpStartUp, Sanjay founded Neta Inc., a venture capital backed Silicon Valley software startup that was acquired by Infoseek (Disney). He wrote the business plan, was involved in fund-raising, recruitment, developing the competitive market positioning, establishing key strategic partnerships, coordinating beta customer programs, and in its M & A. In 1999, Sanjay returned to India after the acquisition of Neta and founded VentureKatalyst, India’s first online publication aimed at entrepreneurs.


If you have Entrepreneurial Spirit then you should Download Lessons Here.


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