Re: Misguided VCs (Was: ...stinking...)

Subject: Re: Misguided VCs (Was: ...stinking...)
From: Bruce Byfield <bbyfield -at- axionet -dot- com>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Sun, 31 Dec 2000 14:54:28 -0800

CC wrote:
>
> And the consequence is that a small company I know
> about, full of extremely competent (to say the least!)
> developers, AND...
>
> - in the black for 6 years
> - selling a fully-functioning product, not vaporware
> - to numerous satisfied customers all over the world
>
> is having a hard time finding VC because "it's one of
> those Dot Coms, isn't it?"
>

That's where connections and a good CFO are important.

I've recently seen two startups and a VC Group closeup. In the first
startup, the company officers had few connections, and were trying
to pitch the company on spec. Even in the dot-com mania, that took
several months, and a lot of flying across the continent to achieve
very modest results.

In the second startup, the CFO has a reputation in his areas of
expertise, and two decades of experience and contacts. Since one of
his areas is bankruptcy proceedings, the fact that he is involved in
the company immediately makes everyone assume that the company he
represents is a good risk. Because of his contacts, even in the
present market, the company expects to be successful in its second
round of financing. In fact, some of the investors even seem to be
potential leads for business partners.

It also helps that the CFO is very level-headed and confident
without being overbearing. The president of the VC group had
contacts, but he had a tendency to be arrogant and abrasive. He is
now out of business, mainly because he annoyed too many people who
could help him. In much the same way, the first company's senior
officer has a tendency to blame other people for his own mistakes;
while he's still in business and may still succeed, he is certainly
going to have a harder time because of his attitude.


--
Bruce Byfield, Outlaw Communications
Contributing Editor, Maximum Linux
604.421.7189 bbyfield -at- axionet -dot- com

"The Queen was in her chamber, a-combing of her hair,
There came Queen Mary's spirit and It stood behind her chair,
Singing, 'Backward and forward and sideways may you pass,
But I will stand behind you till you face the looking-glass.'"
- Rudyard Kipling, "The Looking-Glass"

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