Fred Wilson on Venture Capital Fund Performance
Nov 10 2007
For those of you interested in venture capital, you should definitely check out Fred Wilson’s blog called A VC – Musings of a VC in NYC. He’s been doing a series of articles on Venture Fund performance that is very interesting. Although I’m not currently looking to raise venture capital, it’s good for entrepreneurs to understand the history of venture financing because these venture funds might be investing in future partners or competitors.
I am currently evaluating the opportunity to raise angel and strategic financing to take Babble Soft to the next level. I am reaching near the end of my pocket book (or purse strings) and I have so many ideas that I want to implement that will mostly likely require outside capital. The interesting challenge I have with Babble Soft is that we are not only a Web 2.0 (ACK!$%#) play but also a web portal, thingamajig, mobile application, [invent new word here] play. Most of these plays are in my mind, scratched out on paper, or mocked up in PowerPoint and the only things lacking are the money and the people to bring them to fruition.
Anyway, check out:
VC Fund Performance – Some History
VC Fund Performance – Selection Bias
The Rise and Fall of the Venture Business
VC Fund Performance – Sample Size
VC Fund Performance – The Ugly Years
A VC – for future posts that I’m sure Fred will be putting up on the subject.
I’m excited about the prospect of raising angel funds because I had a good experience with the two angel rounds I raised for my first tech start-up. However, having raised funds before I know how long it can take and how many doors will be slammed in my face before getting to the right investment partners and I’m not looking forward to that. For my first company, we raised money in 1998, 1999, and 2000 (just a few months before the bubble burst) so I know that things went faster than they normally do in ‘fundraising land.’ Isochron survived because it has a solid product/service that companies like Coca-Cola were willing to pay for but let’s just say we as Founders were washed out when it was sold in 2002.
I’m a little bit wiser now on how to play this game, however, now I’m leading a company that has a Business-to-Business (B2B) and Business-to-Consumer (B2C) business model compared to my last which was purely B2B. Plus even though the Internet has been around for a while, things are evolving at a lightening pace making last years, last quarters, or last months strategies in some cases no longer repeatable.
Interesting times ahead! All I know is that of all the deals out there, Babble Soft will one day be in the top 10% of ‘why didn’t I think of that’ ideas! Ah yes, spoken like a true high-tech entrepreneur who might one day wish she had invented those little, cute Croc shoe accessories called Jibbitz instead of trying to do a high-tech startup! Yeesh…I don’t even own a pair of Crocs, but I know that mom who invented Jibbitz is sitting back laughing all the way to the bank!
Author: Aruni | Filed under: entrepreneur, entrepreneurship, new york city, technology | Tags: angel investing, entrepreneurship, fundraising, raising funds, venture capital, venture capital investing | 7 Comments »
A curious question from an entrepreneur who has always been blessed with self-funding (I think up cheap ideas).
I have a solid understanding of the give and take that comes with working with a venture capital group.
With your experience working with Angels, how did that compare. Did they require the same degree of controls?
Hi Shane – It must be nice to think up cheap ideas…wish I could! I checked out your blog and saw:
“Shane & Peter Inc. represents a collaboration of independent contractors whose service we mediate to fortune 500 companies, governments institution and well funded startups.”
So it sounds like you found a career that caters to the crazy folks like us who try to raise funds! 🙂
I will be doing a post on Angels vs. VC funding in the near future but in a nutshell working with Angels can be like working with a mentor who has been there and done that. Many VCs are really financial people so their approach to the business is different than someone who has built a business of their own from the ground up.
The Angel funders that I had experience with had a different ideas of controls but of course both angels and VCs are motivated by making money.
Stay tuned for a post on that sometime in the next few weeks. Thanks for stopping by. I like your blog.
I definitely look forward to reading it. Thanks for the nice words.
I checked out babble soft – thats a fun idea. I’ll keep it mind for when we conceive (trying to get preggy now). What are people supposed to do with these stats you give them?
Its that same issue I have with google analytics. What beautiful stats ou have google … the better to confuse you with my dear. When running a blog, which stats actually matter long term? Is it length of visit, page views per visit, bounce rate …
=)
Hi Shane – well it all depends on how you use stats! For some ideas on how our current users gain insight from using Baby Insights check out: http://www.babblesoft.com/testimonials.php.
I have google analytics too and I check it occassionally. I mostly just look at my WordPress stats because my goal with this blog is different than someone who is attempting to make a living off of their blog.
I think when you have a baby you’ll notice a difference in how much you obsess about blog stats versus how much you obsess about how many times your baby ate, slept, etc. 🙂
The goal of our Baby Insights software is to help caregivers make informed decisions about childcare when they haven’t slept in days! 😉
nice mission statement
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