Power Pal

I just finished reading a book I checked out from the Ford Library at Fuqua titled Greylock: An Adventure Capital Story .  Written by William Elfers , the founder of Greylock Partners , the book chronicles the founding of Greylock and ensuing growth from 1964 to 1995 when the book was published.  The book's out of print and when released was privately published by Greylock, so I feel lucky to have gotten my hands on a copy. Elfers goes into detail around how he raised the first fund, how he recruited the original general partners, and then he and other general partners provide accounts of individual investments.  One of things that really stood out to me about the book was the emphasis that Elfers put on his description of people - past colleagues from ARD, Greylock's limited partners, general partners, associates, entrepreneurs they invested in, CEO's they brought in to run their portfolio companies, investment bankers they worked with, other venture capital firms they rep...

Just read a good article in BusinessWeek titled " Super Angels Shake Up Venture Capital " about how new, smaller venture capital funds are filling the gap in early-stage venture funding.  The article focuses on Josh Kopelman's First Round Capital .  The "super-angels" are basically just early-stage venture funds that are near or under $100 million.  Kopelman argues that the economics of large venture funds ($1 billion+) aren't sustainable, particularly in this economy.  Most of these funds need to return 3x in three years (for a 20% annual return).  With a $1 billion fund, that means you need your investments to have exits in excess of $15 billion (assuming you're invested at 20%).  Given there are no IPO's these days, it's tough to have those kinds of exits.  Makes sense I suppose for investments that don't need much capital to get going (IT, web, etc.).  But it seems the mega-funds still have their place.  To get an alternative energy start...

Read an article in the WSJ titled " High-Tech Start-Ups Put Down Roots in New Soil " about how many high-tech start-ups are considering moving their operations to lower cost locations in America.  States such as Ohio and Michigan are offering significant incentives for these companies to move, including grants and tax breaks.  The downside for these companies is that the funding infrastructure may not be fully in place in those new locations.  For example, venture banking, venture capital, and other sources of finance don't have a significant presence or interest in places like central Ohio.  Says one start-up CEO: "When it comes to raising larger amounts as the company grows," he says, "it remains to be seen if the financing infrastructure [in Ohio] is up to par with the operational side. I think it would be a mistake if we ceased connection to the West Coast."

I know very little about it.  But if I ever do need to, I thought this was a good post on VentureBeat - " The top 12 trends of the video game industry ".

Came across this article in the New York Times about how venture capitalists and other early stage investors pay little heed to comprehensive business plans.  The research behind the article was conducted by the University of Maryland business school.  Why is the business plan not looked at by investors?  The reason, apparently, is that most of what's in a business plan is not relevant to an early stage investor.  Five or ten year financial projections, work experience, etc. aren't what investors are looking for.  Instead, they're looking for what one VC mentions as:  ... “ market validation ,” hard evidence that the entrepreneur has actually sold his product or at least lined up enthusiastic potential customers. Mr. Fagnan [general partner of Atlas Ventures] says that, rather than reading a report, he wants to hear the evidence in PowerPoint slides, white board presentations or “ somebody just talking .” And the number one way of getting an audience with ...

There are a few articles and blog posts I read recently that highlight some exciting emerging technologies for the future of electronic displays, networking, and interfaces.  One I saw a few months back was Microsoft's 2019 vision video  (scroll down for the long version).  It's a 5 min video that runs through not only advances in physical devices and materials, but also associated networking and interfaces.  Another one was Nokia's Morph concept.  It's their take on the impact that nanotechnology can have on devices. It looks pretty science fiction-like when you watch the videos, but it's closer to reality than you would think.  The obvious one that's already a reality in the Microsoft video is the Surface technology.  I just came across the flexible OLED display technology that Sony is working on.  Awesome to see a working prototype.  Another one is a company called Plastic Logic  who have built display technologies where transistors are placed on plastic ...

Read a post in VentureBeat about how VC's are upset about the fees that major i-banks like Goldman Sachs charge small companies for IPO'ing.  They feel that the larger banks have traditionally demanded large fees (e.g. $7M in a $100M IPO), while smaller banks in the syndicate that do most of the work get a much smaller piece of the fees.  Reminds me of the research I saw last fall about how IPO's from the large investment banks (based on the league tables) actually perform worse than those from smaller investment banks.