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Currently viewing the category: "Venture Capital"

I get bored and cynical every time I read a blog post from a first-time entrepreneur who has “discovered” the 7 amazing secrets to entrepreneurial success.  Usually their amazement is because they were so inexperienced in the first place, and some basic truths about business and entrepreneurship never occurred to them in the first place.  Much like how an 18 year-old living on their own for the first time is amazed to discover that ‘if you don’t pay your rent on time, the landlord will evict you.’ It’s an important lesson, but hardly an amazing secret that now qualifies them as an expert.

SFrustrated-PixleBayo many new entrepreneurs self-anoint themselves an expert because they’ve started out so clueless in the first place. Expertise is not measured in the difference between zero knowledge and what you have just learned – expertise is what you know more, or do better, than the majority – or better than other experts.

OK. End of that preemptive rant.

Now an exception.

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Icon of Money in the Hand on Digital Background.Let me start this post by stating how much respect I have for venture capitalist Fred Wilson.  He is easily in the top-5 influential thought leaders in the entrepreneur-investor ecosystem. His blog “AVC” is required reading for everyone on both sides of the table. But today he really pulled the trigger too quickly on a post.

He was postulating about a product idea – where entrepreneurs might pay for a report that lists what each venture capital firms’ investing criteria is, based on their track records  (something that arguably should be on their websites).  Let’s set aside for a moment that he is proposing a $100 fee for each entrepreneur seeking funding, here’s the crux of his argument:

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As an investor, advisor and mentor to entrepreneurs and new ventures, I get to hear a lot of pitches – whether as a judge in a competition, in a boardroom, classroom or a face-to-face pitch. After a while, they all start to sound alike. In fact, when investors get together, they lament (or even parody) how all the pitches sound alike. To be fair, as an entrepreneur, I used to lament with other entrepreneurs on how predictable venture capitalists can be in their responses.

Today, giving more evidence that I apparently have way too much time on my hands – I created this “Pitch Bingo” game for investors and advisors.   The next time you are listening to entrepreneur pitches at an event, click on the Entrepreneur-BS Bingo Game link, and you will get a BS-Bingo card (everyone’s card has a different random combination of entrepreneurship buzzwords).   Cross off the word when you hear it.

 

Entrepreneur-BS Bingo Game CJs Entrepreneur-BS-Bingo

CJ’s Entrepreneur Pitch Bingo

 

The first person who completes a BINGO with a row or column must shout out Zuckerberg!
And Tweet to #CJ-BS-BINGO.

And just to be fair, I’ve also created one called Investor-BS Bingo!   Now entrepreneurs can keep track of the predictable jargon investors mindlessly toss out during pitch meetings.   (notice the phrases “Term Sheet”  or “Yes” don’t appear – since they say it so rarely).

CJ’s Investor-BS Bingo

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An excellent overview of the kinds of funding available for entrepreneurs (startup funding). But this can be very misleading in a way: The “money available” and amounts invested absolutely do not reflect the likelihood of attracting funding from each source – nor do the amounts indicate how effective the funding source is towards the success of the startup.

Startup Funding Infographic

 

abc logo2_fullUsually, I am cynical about pithy posts proffering advice such as “5 steps to …” – particularly when it is about becoming a successful entrepreneur, or raising venture funding.  Most often, I find these posts written by articulate armchair quarterbacks (who have never really done it themselves) or by what I call accidental passengers :  people who have been lucky enough to have been aboard a rocketship just as it launched, but somehow think that they piloted the thing.   Every so often though, a very self aware first-timer, is able to explain the journey in such a way that not only makes sense, but contains universal lessons for all.  Such is the case with  Eran Galperin, co-founder at Binpress, in describing in detail their fundraising process.

His opening line is particularly interesting:

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Not since Adeo Ressi rocked the venture capital industry by creating the scathing VC feedback site, TheFunded, has an entrepreneur so bluntly articulated the frustrations about dealing with venture capitalists, and of the venture capital industry’s treatment of entrepreneurs.

Recent article by experienced and accomplished entrepreneur, Sindhya Valloppillil,  founder & CEO of Helix Men, states it forthrightly – but even then, the truth really stings:

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I wasn’t sure whether to laugh or cry. Sure, it’s a parody, but this is as close to the typical entrepreneur-pitch experience as it gets – particularly the comments of the VCs responding to a pitch by one of the greatest innovators that ever lived. And, sadly, I’ve been on the other side of the table too and it is just as frustrating to see one’s investor-peers behave this way. It’s as surreal as it is predictable.