Venture Capital Magazine

Fredereck T


What does Digg use all the Venture Capital they get for? And who in there right mind would fund Digg anyone, no one wants to buy them?
RoadHunt great point

fisikia


BS Physics, MS Electrical Engineering

How can I get a job in a NY venture capital / financial firm?

Ultimately I’d like to find tech companies to invest in and be involved in start-ups.

vasconcj

In an interview with iinnovate, Heidi Roizen, renowned Silicon Valley venture capitalist and Managing Director of Mobius Venture Capital, talks about failure, hiring and firing, and the importance of hiring the ‘right person’

For more of this interview check out www.iinnovatecast.com

Marco Terry


Many business owners try to finance their growing businesses by going to venture capital or angel funding groups. Although both financing options provide a great way to finance a business, they are usually hard to qualify for. And furthermore, they all require that you give up some business equity in exchange for funds. That, needless to say, can be a very steep price to pay.

There are some business financing alternatives that can allow you to finance your business, almost as effectively, without having to give up any equity. As opposed to venture funding or angel funding, these options are easy to qualify for and do not require the endless documentation and due diligence that venture money requires..

However, these can only help you if you meet the following criteria:
1. Your business is established and has commercial (not consumer) clients
2. Your business invoices between $40K and $900K per month

These alternatives will help you if:
1. You need money to meet payroll, pay rent or pay supplier
2. Your customers pay you in 15 to 60 days
3. You need (or wish) your customers to pay you sooner

Your first option is called factoring (also known as invoice factoring). Factoring is ideal for businesses that cannot afford to wait 15 to 60 days to get paid by their clients. Factoring provides you with financing that is tied to your invoicing. Basically, the more your company invoices, the more financing you qualify for. This enables you to grow your company – many times exponentially – without having to give up equity.

Your second option is called purchase order financing. It works well for re-sellers, distributors, traders and wholesalers. Purchase order financing is ideal for business owners that have a large purchase order in hand, and who cannot afford to pay their suppliers to deliver the product. PO financing enables you to get a letter of credit, backed by the financing company, to pay your suppliers. This allows you to deliver on the purchase order and effectively make the sale. Usually, very little – if any – of your money is required for the transaction.

Both alternatives are easy to qualify for, take days (or a couple of weeks at most) to set up, and when used correctly allow you to grow your company exponentially.

john


Source: blogs.smh.com.au

Some ideas are doomed to fail, but most are killed by their creators.

At least, this is the dominant school of thought. But is this really the case?

Just about every venture capitalist I’ve interviewed has said within minutes that startups with opinionated founders have got Buckley’s chance of securing venture capital. Not malleable, agreeable, or willing to move aside for someone more experienced? Then venture capital is not for you.

I bought into this conventional wisdom until a few months ago when a contact of mine told me about the problems venture capitalists brought to his board room: the clashes of egos, the hodgepodge of agendas, and worst of all, the obsession with the big picture when the product itself wasn’t working.

So I was interested to read last week that Sean Parker, the co-founder of Napster and first president of Facebook, stirred Silicon Valley with the launch of a new venture capital fund alongside one of the founders of PayPal, Peter Thiel.

The name of the fund says it all. Called the Founders Fund, it exists in part to support, rather rather than eject, founders.

“Firing the CEO is almost always the wrong decision. In the late 1990s the standing question was, Are you willing to step aside as CEO? We’re more likely to ask, Are you willing to be CEO the whole time?” Parker says in this interview.

This interesting about-turn is a theme that dominates Inc. magazine’s profile of John Abrams, the founder of the world’s first online social network, Friendster. As Inc. tells it, Abrams’ startup was backed by an all-star cast – powerful and experienced investors, and the best managers money could buy. But far from being the silver bullet, its move into the big league was its kiss of death.

Once tagged the next big thing, a “no-brainer” with Kleiner Perkins Caufield & Byers doing the driving, Friendster turned out to be a spectacular failure. Now a Harvard Business School case study on how not to manage a startup, Friendster ran out of money last year and recapitalised at US$3 million.

It’s turne that Friendster was a victim of mismanagement but Abrams argues that it wasn’t a singular failure; it was a systematic failure. With venture capitalists investing on the basis that they’ll strike it rich with one or two investments in every ten, the system was stacked against him. In short, venture capital is designed to spawn far more failures than successes.

Inc.’s story is a fascinating look at the inner-workings of a star-studded board. There were so many cooks in the kitchen at Friendster its corporate strategy was nothing short of schizophrenic.

Abrams says he suppressed his entrepreneurial instincts because of the assumption that others knew better. He’s starting a new business, and while he intends to take his time, he plans to take lots of risks and avoid venture capitalists.

What do you think about venture capital? Does it kill more than it nurtures? Or should startups like it or lump it because this is how the game is played?

Article Publish by: http://www.investmentbankingcentral.com

Larry Sinclair


I have copyrights on two tee shirts.

“Larry Does Not Lie” and

“ObamaBinBiden 08?

bassbukow

Founder of MsMoney.com, Tiffany Bass Bukow, talks about raising venture capital money for her startup in a panel discussion with other entrepreneurs and venture capitalists. Broadcast on PBS.

qtpie34


What analytical questions will be at the top of VC’s due diligence list prior to offering capital to early-stage firms? How will VC’s realize their return on investment over the life of an investment in a firm?

westphalia1


Are there any Venture Capital Funds that offer accounts to small investors? As an alterantive to wall street trading?

Erilson Araujo


I am charged with getting venture capital for our media technology company that focuses on next-generation home entertainment. This financial crisis has got me thinking about where to look. I was thinking maybe China. Any ideas? —E.S., Irvine, Calif.

First, the good news: “China does have a VC community, and…[it's a] source of liquidity and appetite for new investment, notwithstanding the current global financial collapse,” says Janet Carmosky, CEO of the China Business Network, a business information and networking Web site.

Bradley Haneberg, a securities lawyer for Kaufman & Canoles who has worked on direct Chinese initial public offerings, agrees. “In the last several years, China has seen the birth and exponential growth of its entrepreneurial class. The Chinese government adopted several policies (including tax incentives) to encourage the development of privately owned businesses. These entrepreneurial ventures, coupled with the privatization of state-owned businesses, have driven the Chinese economy to new heights,” he says.

Despite a blistering economy and an enormous spike in the number of businesses that require access to capital, bank debt is difficult to obtain in China because loans have traditionally been given only to companies that are politically connected. The lack of bank financing has contributed to the creation of Chinese venture capital groups, Haneberg says. Chinese investors have funded telecoms, Internet ventures, health-care firms, software development, green tech, water projects, airport securities, and social networking sites, says Robert Chen, executive vice-president and general manager of the ChinaTel Group, which provides WiMAX networks in China and other countries. “Next-generation home entertainment could be big here,” he says.

Focus on Chinese Companies

Despite the good news, however, there is a deal-breaker for U.S.-based startups seeking to tap into Chinese VC money: Chinese investors focus on funding Chinese companies.

“There are many reasons for [investing inside China]: Among the top: lower labor cost, big China market, and most importantly, the VC can keep an eye on the project,” Chen wrote in an e-mail message. In addition, Chinese VCs rely heavily on what’s known as guanxi (BusinessWeek.com, 11/8/07), Chen says. “When a person has good guanxi with the Chinese government or with a VC, that means they have a good relationship and might refer the company or individual to get a license approved or refer the person to someone in the VC community that will review the company’s business plan and may or may not invest in the company.”

Carmosky confirms the importance of the personal relationship in Chinese business, in contrast to U.S. venture capital culture, which tends to focus less on relationship and proximity and more on forecast ROI and exit strategies. “Our system of capitalism is so impersonal that it’s often called ‘OPM’ or ‘Other People’s Money,’” Carmosky notes. “It calls for high degrees of transparency and accountability, and exists within a framework of mature, scalable markets.” In contrast, risk is evaluated by Chinese VCs based on proximity, local relationships, and calibrating how well-attuned a company is to government policy.

There are also stringent foreign exchange rules in China that make it difficult for firms there to engage in foreign exchange, Haneberg says, and Chinese venture capital firms have a hard time competing for quality investment opportunities in developed countries where there are already so many established investment firms.