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What Venture Capitalists Are Really Thinking

I cofounded a company called Sawhorse Media that's making sense of Twitter (Twitter was founded by past Venture Voice guest Ev Williams).

We decided to launch a new site called Venture Maven to make it easy to follow what VCs and angels are tweeting about. For example, if you were pitching Spark Capital, you could have checked Venture Maven yesterday to see one partner was at the dentist and a principal just got off painkillers after a knee surgery. Better open the meeting with a good joke.

Please let me know your feedback. We're also thinking of launching a similar site for founders and CEOs.

You can find Venture Voice on Twitter at @VentureVoice and me personally at @Gregory.

Posted by Greg Galant on May 13, 2009 | Permalink | Comments (3) | TrackBack (0)

Angel Financing Without Hellish Legal Fees

It's great to hear stories like the one where Andy Bechtolsheim handed the Google founders a $100,000 check before they even set up their bank account. Convince an angel to invest and you're off to the races! However, what many aspiring entrepreneurs don't know is that after the one or two page term sheet there are dozens of pages of documents that go into even an angel financing.

Since law firms have templates for these deals you might think it's no harder than copying and pasting. The problem is there are lots of different templates floating around law firms, and a countless number of terms that could be changed. Many of these terms really don't make too big of difference, or if they do their effects are so hard to anticipate that arguing over them isn't worth the time. Lawyers get paid by the hour so they have an incentive to find terms they don't like (and there are always terms to not like). So lawyers will often spend weeks bickering over trivial issues, racking up $10,000s of legal fees, delaying the financing and putting the deal itself at risk.

Enter angel fund Y Combinator, which has just released the financing documents it has standardized and used with dozens of entrepreneurs. If these documents get a reputation for being fair (which is likely given the Y Combinator's good reputation), they could save million of dollars in legal fees for startups. The key is that both the entrepreneur and the investor trust that the Y docs are a fair deal for all, and trust enough to tell their lawyers not to mark it up! This could do to angel investing what Creative Commons did to copyright or what McDonald's did to hamburgers.

UPDATE (8/14): Scott Rafer (a past VV guest) posted his convertible debt note (direct link to doc) he's using for his current company, Lookery. Rafer did a convertible debt deal, which has many advantages as my friends at Venture Hacks have argued. On the other hand, Josh Kopelman has argued against it, pointing out several disadvantages. It seems to be the type of issue that could go either way depending on the dynamics of the particular company, oppertunity and investors -- but if we had a standardized set of docs for each verified by a trusted third party it'd be very powerful. The NVCA did this for later stage docs (of course they're funded by the VCs). Who could do this for convertible debt rounds?

Posted by Greg Galant on Aug 13, 2008 | Permalink | Comments (4) | TrackBack (0)

Uncensored Interview

The folks at Uncensored Interview were nice enough to turn the tables on me by interviewing me on their show. You can watch all the clips here. Here's me talking about what makes a good interview:

Please join our new Venture Voice Facebook Page.

Posted by Greg Galant on Jul 6, 2008 | Permalink | Comments (0) | TrackBack (0)

Next Question?

In our last round of questions on this blog, we asked each former guest about his or her first time (raising money). What should our next question be?

Give us your ideas in the comments or via our contact page.

We've got a number of new audio interviews scheduled. To support the show, please consider becoming a Venture Voice member by clicking here. (Just like NPR, but for entrepreneurs and without the tote bags.) More members = more interviews.

Posted by Greg Galant on Jun 1, 2008 | Permalink | Comments (1) | TrackBack (0)

David Sacks' First Time (Raising Money)

This is part of a series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

David Sacks: I asked Peter, Max and Elon to finance "Thank You For Smoking" with me. I didn't have to do too much selling since I had worked with them at PayPal and was putting in my own money.

Posted by Greg Galant on Apr 24, 2008 | Permalink | Comments (0) | TrackBack (0)

Kelly Perdew's First Time (Raising Money)

This is part of a series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Kelly Perdew: I raised my first round of financing ($500K in equity) from friends and family while I was still in business school. Be very careful about taking money from friends and family... while it is easier to access, if things don't go well, you tend to stay in the deal much longer than is good for you to try and save their money!

Posted by Greg Galant on Apr 22, 2008 | Permalink | Comments (0) | TrackBack (0)

Evan Williams's First Time (Raising Money)

This is part of a series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Ev Williams: I asked my mom for $10,000. She gave it to me.

Posted by Greg Galant on Apr 21, 2008 | Permalink | Comments (0) | TrackBack (0)

Jay Adelson's First Time (Raising Money)

This is part of a new series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Jay Adelson: The first round of financing I ever raised was from angels. I was working with Al Avery, who co-founded Equinix with me in 1998. A good friend of mine, who had founded a company in Silicon Valley in the mid-nineties and sold it to Cisco, was mentoring me to avoid going initially to the VCs.

From his perspective, nothing could be worse; Showing up at VC with a business plan, with no executive team, no execution, amounted to no valuation, and the VC taking way too much of the company for a series A.

Instead, he felt, do everything you can to bootstrap or angel fund it, then go back (even a month, or six months later) to the VCs with something they can't argue is as risky.

This friend of mine went to two friends of his, and we raised $100,000.00 to start. We followed his instructions to the letter; We hired some executives, we started the process of operating our business, got an office, etc. We made the business real. Most importantly, we found a great corporate law firm to start all the paperwork, who later would help us negotiate and deal with the VCs.

Three months later we gave away roughly 40% of the business for $12 million dollars. The $100k was set up to convert to essentially $200k worth of stock at the close of Series A. I think they did quite well, and we're all still good friends.

Posted by Greg Galant on Apr 18, 2008 | Permalink | Comments (0) | TrackBack (0)

Joel Spolsky's First Time (Raising Money)

This is part of a new series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Joel Spolsky: I put in a very small amount of money (I think it was about $50,000) from my own savings. That carried us to profitability.

Posted by Greg Galant on Apr 17, 2008 | Permalink | Comments (1) | TrackBack (0)

Fabrice Grinda's First Time (Raising Money)

This is part of a new series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Fabrice Grinda: The first time I had to raise money was for Aucland, a copy of eBay for Southern Europe which was my first Internet startup. I was lucky not to have to raise seed money. While in college at Princeton, I built a company exporting high end computer equipment to Europe (motherboards, memory, CPUs, hard drives, etc.). Given its profits, I left Princeton in June 1996 with $50,000 in cash.

When I joined the McKinsey New York office as a consultant in September 1996, I ran a sophisticated real estate rent versus buy model. The model and my rule of thumb analysis (see Rent … unless you want to buy) were screaming BUY! I bought a large 1 bedroom apartment on 54th and 2nd for $115,000, putting $25,000 down.

With the other $25,000, I bought 4 stocks: Yahoo, Microsoft, Amazon and Intel. When I decided to create Aucland in July 1998, I sold the 1 bedroom apartment for $185,000. I sold all the stock I owned. After taxes, I was left with around $300,000 in cash. I invested 100% of it in Aucland.

Click to read more.

Posted by Greg Galant on Apr 16, 2008 | Permalink | Comments (0) | TrackBack (0)

Scott Rafer's First Time (Raising Money)

This is the first of a new series on Venture Voice where we ask a bunch of past show guests a simple question and post their answers.

How'd you raise your very first round of financing?

Scott Rafer: The first money I raised was for Fotonation in 1996. We just had a cashflow issue, so borrowed $25k off a friend of mine in NY, paying him back the principal plus interest and warrants. It was the right thing for the situation. My mistakes were later.

Posted by Greg Galant on Apr 15, 2008 | Permalink | Comments (0) | TrackBack (0)

Google is Making the Web Free. Will DoubleClick be its Next Free Service?

Over at Silicon Alley Insider, Hank Williams is arguing that VCs are supporting free services that ought to be paid for on the hope advertisers will foot the bill down the road -- thereby eliminating the opportunity for noble paid services to make a couple honest bucks by charging users. It's a dubious argument, as pointed our by the site's own editor (ouch).

If we accept the argument that free is a bad thing, then wouldn't Google be to blame? It's acquired several companies such as Urchin and VC-backed Feedburner (our first guest) that offered paid services and made them free. Google also acquired VC-backed Jot (their CEO talked about plans to charge users on Venture Voice) and GrandCentral, then accelerated their development into free services.

Google understands there's at least two ways to make money from "free" services. Ads, which are time tested and Wall Street approved. And data. Data has tremendous value, especially to Google (as opposed to VCs), as Google can use it to decide on new services to launch and to choose acquisition targets. (Who even needs to do due diligence on an acquisition target if you already are running its analytics?)

What's next? Look to the past. When Google acquired Urchin, Google was working on its own analytics product that it dumped in favor of Urchin's battle-tested service. Urchin had a hosted stats product that was turned into the free Google Analytics service, and a downloadable product with a license fee. Now, Google has its own ad server in development but just closed an acquisition of DoubleClick (their founder interview here) that charges for its industry standard hosted ad serving service and downloadable ad server. Why not dump the Google's beta free ad serving product and just make DoubleClick's hosted ad server free?

To most companies, it'd be a fine strategy to have different product lines for different market segments (e.g. Microsoft Works vs. Office, Toyota vs. Lexus), but not to Google. The beauty of Google has been allowing the same service to scale to companies of any size, most famously in the case of AdSense/AdWords. Will it break this tradition to preserve DoubleClick's hosted ad serving revenue, which is already under attack from many competitors and from an open source solution (OpenX)?

Disclosure: This blog entry is free.

Posted by Greg Galant on Apr 4, 2008 | Permalink | Comments (0) | TrackBack (0)

Entrepreneurship in South Africa

We just received this e-mail from Sydney Mfuniselwa who gave us permission to post it:

My name is Sydney from South Africa, I am really moved by the interviews on show. I wish we had something like this here in South Africa because I think my country needs stuff like Venture Voice as it still developing.

My point is I am 25 young black man as software developer, trying to go on entrepreneurship but its hard in this part of the world because most of the people cannot even use a computers and I already made my mistake by planning and planning for a long time in developing a database for the company I work for which i did developed and presented to my senior manager but just heard the company has already sign up for a new system to be implemented because of this I felt so down for a while up until i manage to put my hands on one of venture voice interviews. Two things I have highlighted from the entrepreneurs you interviewed are:
1. Do not waste time trying to plan a perfect product execution is the key.
2. And do not let million rejections wear you off.

Now I am trying again because i believe I should be an entrepreneur and i just open internet cafe on one of historical known building in Carlton in the Johannesburg CBD.

I truly appreciate Venture Voice.

Posted by Greg Galant on Dec 11, 2007 | Permalink | Comments (3) | TrackBack (0)

Silicon Valley Postcard

Silicon Alley Insider asked me to write about my trip to the West Coast (DEMO in San Diego, Podcast Expo in LA, meetings in Silicon Valley). Enjoy!

Posted by Greg Galant on Oct 2, 2007 | Permalink | Comments (0) | TrackBack (0)

Venture Voice Rebooted

We took off for the summer from Venture Voice. E-mails like these from loyal fans made it a painful experence:

Great show, have you taken the summer of? I hope to hear you back on the pods soon.

Cheers!

pb
Penticton, BC

----

I talked with Joel Spolsky recently and he said that you are no longer doing Venture Voice! I have learned so much from your podcasts and was disheartened to hear this news. I do hope that you continue VV. I wish you the best in what you are now doing. Diwant

I can explain!

I was busy launching a new business called News Groper, a network of parody first-person blogs. For example, if you want your fix of business news, you can read blogs "by" Tom Perkins, Ben Bernanke, Stephen Schwarzman and Jeff Skilling.

But fall's upon us. Venture capitalists are back from vacation, customers are ready to do deals again and entrepreneurs are more than ready to pounce. As such, we're ready to give you the content you need.

I'm very excited to announce that Eddie LeBreton has joined the Venture Voice team to help take things to the next level.

Now we need your help: What can we do better? Who should we interview? Any other great ideas for us? Want to sponsor Venture Voice? Please post in the comments or contact us.

Click to read more.

Posted by Greg Galant on Sep 18, 2007 | Permalink | Comments (6) | TrackBack (0)

Facebook: Crossing the Chasm in Reverse

I had the pleasure of being in the very first Facebook generation. My college was one of the first 13 to be added to Facebook, and we were all jazzed just to see photos of each other and occasionally get a "poke" -- the implications of which are not clear to this day.

I only have a couple of friends from college who are not on Facebook. The rest are. And I went to a college without a computer science department.

Generally the way new technologies spread, according to Geoffrey Moore's Cross the Chasm, are by starting with early adopters and spreading to the early majority. The early adopters are visionaries and do things simply for the sake of trying a new technology (e.g. being at the leading edge of "social networking"). The early majority are pragmatists who try something when they're sure of it's value (e.g. seeing what your friends are up to). Crossing from one to the other is a huge and often fatal challenge.

LinkedIn took this challenge and started with the early adopter Silicon Valley scene. They started to invite their friends, VCs, lawyers, bankers, etc. until it eventually spread so that many professionals -- even here on the East Coast -- know what it is. Reid said on my show that he doesn't think it's hit its "tipping point", but I believe it's crossed the chasm.

Facebook's another story.

Their first few thousand users included most of the college kids at the original 13 schools allowed in. While college students are more computer literate than many, most of that audience could not be considered early adopters. I had friends on Facebook in those days who didn't know what a blog was.

Facebook didn't start with the traditional early adopters, or if they did they only started with a small subset of them and didn't stay there long.

Moreover, they didn't even allow in the typical Silicon Valley/TechCrunch 53,651 early adopters in until recently (unless they happened to be in college).

Now, after Facebook has launched its API and the tech world has taken notice in a big way of the business opportunity in Facebook, you're starting to see lots of typical early adopters -- tech entrepreneurs and VCs (e.g. Fred, Josh, Roger, Dave, Howard, Andy) -- experiment with Facebook.

What does it mean that the early adopters are giving their two cents only after the early majority (at least among 18-30 year olds) have already adopted?

Posted by Greg Galant on Jul 7, 2007 | Permalink | Comments (0) | TrackBack (0)

Teaser for Next Episode: iContact

I usually don't like to give hints about who's coming up on Venture Voice, but I can't resist breaking news: Ryan Allis -- who left college early to start his business iContact -- just raised a $5.35 million for his already profitable company. Stay tuned to hear the story.

Posted by Greg Galant on Jun 29, 2007 | Permalink | Comments (0) | TrackBack (0)

Immigration

I was reminded of how immigration policy affects all parts of the economy while reading Fare is Fair, one of my favorite columns in The L Magazine that's a collection of quotes from those most in the know in NYC: the cabbies.

A number of our past guests on Venture Voice are immigrants. How does the immigration policy affect entrepreneurship in the US?

Posted by Greg Galant on Jun 25, 2007 | Permalink | Comments (0) | TrackBack (0)

Bad Influence

Bill Gates gave a very provocative Harvard Commencement speech. I was struck by this passage:

But I also want to be recognized as the guy who got Steve Ballmer to drop out of business school. I’m a bad influence.

While he said it jokingly, it's a great reminder that one of the entrepreneur's biggest jobs is team building and convincing others to take risks.

Posted by Greg Galant on Jun 12, 2007 | Permalink | Comments (0) | TrackBack (0)

(Un)fair Advantage

Anyone who's worked with venture capitalists knows that they have a language of their own -- and for the most part it's quite fun. Terms like "burn rate", "first-mover advantage", "monetization" and "defensibility" never get old. But I've noticed that many VCs I respect are using the term "unfair advantage" to simply describe an advantage. Jeremy Liew describes having the best news coverage as an "unfair advantage". Susan Wu calls having a community and leveraging network effects an (outdated) "unfair advantage".

Click to read more.

Posted by Greg Galant on May 8, 2007 | Permalink | Comments (3) | TrackBack (0)

Good Angry Customers and The Death of Sucks Sites

The social news site Digg (whose CEO is a past Venture Voice guest) recently had a user revolt after it gave in to the demand of a cease and desist letter and blocked a posting. The users voted stories up to the main page of Digg that criticized Digg. It was viewed as a big negative at the time, and journalists are still reveling in the site's supposed hardship with headlines like Digg Flap Exposes Cracks.

Click to read more.

Posted by Greg Galant on May 4, 2007 | Permalink | Comments (0) | TrackBack (0)

Worthwhile Reading

After mistaking me for an expert, people often ask me what I read. Sure, as you can tell from numerous past posts, I read all the sites you must read to keep up with the industry, including paidContent, Techcrunch and Techmeme (the founder of which, who I recently met, is both a fan of Venture Voice and an adept impersonator of my voice). I also read blogs from past Venture Voice guests, such as Fabrice's, Dick's and Jason's, which always offer interesting thoughts.

But if entrepreneurship is dependent on seeing the world in a different way from others, then we can't let the media we consume be defined by our industry or job title. I go out of my way to find writing that's bold, provocative, and unafraid of breaking social mores. Here are the sources that I won't start my mornings without:

Click to read more.

Posted by Greg Galant on Apr 29, 2007 | Permalink | Comments (2) | TrackBack (0)

Join the Venture Voice Team

How would you like to be the first person to hear the next episode of Venture Voice and even make a couple of bucks for listening? We're hiring listeners to write show notes for new episodes (just check out past shows for an example). Great writers will even get to take a shot are writing the intro paragraph. If you're interested, please contact us.

Posted by Greg Galant on Apr 22, 2007 | Permalink | Comments (1) | TrackBack (0)

West Coasting

As I mentioned in my last post, we do our best to cover how business gets done on both coasts, and everywhere else. I'm headed out to San Francisco for the first time in a few months for the Web 2.0 Expo. If you're out there too or you know of anyone we should be talking to, drop us a line.

Posted by Greg Galant on Apr 11, 2007 | Permalink | Comments (0) | TrackBack (0)

NYC Entrepreneur Panel

I had the pleasure of moderating a panel of excellent entrepreneurs for MBAs at NYU's Stern School of Business. The panel included Thrillist co-founder Adam Rich, Daily Candy's Eve Epstein, Sean Pfitzenmaier of stealth startup Social Sauce, Music Nation founder Daniel Klaus and Jonah Beretti who's a founder of The Huffington Post and BuzzFeed.

Click to read more.

Posted by Greg Galant on Apr 9, 2007 | Permalink | Comments (0) | TrackBack (0)

Run Your Startup in the 2008 Election

On the cover it would seem entrepreneurs and politicians have little in common. One creates value in the economy, the other, um, I'll refrain from any bashing of politicians. But both entrepreneurs and politicians have a lot to potentially gain in the drawn-out election season leading up to November 2008.

Click to read more.

Posted by Greg Galant on Mar 2, 2007 | Permalink | Comments (0) | TrackBack (0)

The Sincerest Form of Flattery

If imitation is the sincerest form of flattery, then we must have been dead on in our list of the Top Five Venture Capital Firm Web Pages. In a very bizarre case documented by Dan Primack of peHUB, Sequoia Capital is suing ComVentures for copyright infringement of its website:

Click to read more.

Posted by Greg Galant on Feb 26, 2007 | Permalink | Comments (0) | TrackBack (0)

Online Social Network Entrepreneurs Social Network Offline

Last Saturday, Venture Voice show producer Koshlan Mayer-Blackwell dropped in on the Community Next: The Present and Future of Online Communities conference held at Stanford University. Here are some of his musings on day:

Click to read more.

Posted by Greg Galant on Feb 14, 2007 | Permalink | Comments (1) | TrackBack (0)

Talking Back to Your iPod

Ever listen to Venture Voice and wish you could say something back to our guests? You can. Pop onto our site and leave a message in the comments -- most of the guests read them. Our most recent guest, Fred Seibert, just highlighted a provocative comment from a Venture Voice listener in his blog. One blogger mischaracterized some data Guy Kawasaki shared with us, and Guy corrected him in a comment on his blog.

If you feel text can't do justice to the passion in your comment, remember you can leave a message on our listener line, just dial (212) 461-4850 or skype "venturevoice".

If there are any other ideas out there to further enhance the Venture Voice community, let us know!

Posted by Greg Galant on Feb 14, 2007 | Permalink | Comments (0) | TrackBack (0)

David Sacks Launches Geni

Past Venture Voice guest David O. Sacks launched Geni today, as TechCrunch reports, which aims to be the ultimate family tree.

Many have tried in this area before, none have achieved dominance. I've tried about 5 of these types of services in the past (including one from Joe Kraus's Jot) and none have caught on with my family no matter how many e-mails I've sent out.

Geni's got one of the fastest registrations I've ever seen, so I couldn't resist pestering my family members yet again. As I've said before, never bet against a PayPal alum. Let's hope that, as Valleywag eloquently put it in reference to his Hollywood venture, David Sacks has another "disgustingly successful foray".

Posted by Greg Galant on Jan 16, 2007 | Permalink | Comments (5) | TrackBack (0)

Jazz

Jazz has undergone the ultimate irony. Born in New Orleans, Jazz was once deplored by the music establishment and academia as modern day rap is now considered offensive by ears accustomed to Beethoven. It was the devil's music. Now it's hard to find an article about it in anything other than media outlets aimed at upscale audiences. The New York Times just printed an article titled Jazz Is Alive and Well. In the Classroom, Anyway.

Click to read more.

Posted by Greg Galant on Jan 7, 2007 | Permalink | Comments (0) | TrackBack (0)

Confusing Comfort with Happiness

I'm not sure that there's any correlation between entrepreneurship and fitness, but there seems to be a lot in common among people at the top of their game -- be them entrepreneurs or athletes. Outside magazine ran an interview with "ultrarunner" Dean Karnazes (thanks to Michael Hyatt for the link) in which he said:

Click to read more.

Posted by Greg Galant on Jan 5, 2007 | Permalink | Comments (2) | TrackBack (0)

Bah, Humbug!

Nothing like A Podcast Carol to change one's outlook on podcasting for 2007.

How are you keeping in touch with your clients before the new year? What does your vacation look like?

Happy Holidays!

Posted by Greg Galant on Dec 22, 2006 | Permalink | Comments (0) | TrackBack (0)

Taxing Entrepreneurship

The government pays a lot of lip service risk-taking, entrepreneurship and small business. In fact, many believe that it can be advantageous for tax purposes to be an entrepreneur (write-offs, SBA loans, hiring family members, etc.). In a fascinating blog post titled Should We Worry about the Rising Inequality in Income and Wealth?, Judge Richard Posner considers how a high marginal taxes effects entrepreneurs and other risk takers:

What are the causes, and what are the effects, of this trend in the income (and of course wealth) of the highest-earning segment of the distribution? Part of it is reduced marginal tax rates, because high marginal tax rates discourage risk-taking. Consider two individuals: one is a salaried worker with an annual income of $100,000 and good job security, and the other is an entrepreneur with a 10 percent chance of earning $1 million in a given year and a 90 percent chance of earning nothing that year. Their average annual incomes are the same, but a highly progressive tax will make the entrepreneur's expected after-tax income much lower than the salaried worker's.

Posted by Greg Galant on Dec 19, 2006 | Permalink | Comments (1) | TrackBack (0)

The Irony of You

Setting off a barrage of cutesy opening lines by bloggers, Time Magazine designated "You" as the person of the year. Bloggers responded with begrudging thanks, collective self-congratulations, lessons in semantics and more musings. Triumph! Citizen media has finally overtaken professional journalism in influence. However, what does it say that a silly magazine award (published by the "M.S.M." no less) can still set the blogosphere a flutter?

People have always placed too much authority in the "Man of the Year", I mean "Person of the Year", oh, "People of the Year" award. But the editors at Time did their job well: They cause controversy and got attention. After all, they're pros.

If this shift was really the most significant thing to happen in 2006, why not give the award to one of the entrepreneurs behind it? After all, all of the big players in this shift were startups, not new ventures by existing big companies. When a politician has a lot of influence, "you the voter" who put him or her in office doesn't get the award. Let's remember that entrepreneurs change the world, and that they made their mark on 2006.

Posted by Greg Galant on Dec 18, 2006 | Permalink | Comments (1) | TrackBack (0)

Frenemy

With so much change going on in media, it's hard to tell who's your friend or your enemy. Having a good strategy for dealing with others who could either be a great partner or a fierce competitor is crucial for many startups, as we saw with PayPal and Zingy. A few weeks ago at an event put on by The Week, I heard WPP chairman and CEO Sir Martin Sorrell use the perfect term to describe such a relation (in this case referring to Google): frenemy.

If Sun-tzu was right that you should keep your friends close and your enemies closer, then what should you do with frenemies? Smart entrepreneurs should at least start recognizing who their frenemies are. To give them a push, I just created an entry in Wikipedia for Frenemy.

It's my first Wikipedia entry, so please help clean it up and add your thoughts. Here it is as I originally wrote it:

Click to read more.

Posted by Greg Galant on Dec 6, 2006 | Permalink | Comments (1) | TrackBack (0)

Wharton: "Where Entrepreneurship Comes to Die"

We've covered the ongoing debate over "teaching" entrepreneurship. Now we have a report from the front lines.

Ravi Mishra, a University of Pennsylvania junior double majoring in engineering and business who still describes his location as "Silicon Valley, California", writes a blog post titled Where Entrepreneurship Comes to Die.

He tears apart his fellow b-schoolers' business ideas with an entertaining vengeance usually only seen in a venture capitalist (I wonder what he scored on the VCAT), which includes building the craigslist for college students (as if craigslist isn't the craigslist for college students) and a plan to bring the campus meal plan off campus.

Yet Ravi doesn't lay all the blame on his Ivy compatriots. He says of the class:

Click to read more.

Posted by Greg Galant on Dec 5, 2006 | Permalink | Comments (1) | TrackBack (0)

The VCAT (Venture Capital Aptitude Test)

Would be law students have their LSAT, medical schoolers have their MCAT, and MBAs have their GMAT. Why should aspiring venture capitalists be left out of the fun of proving their self worth in a quick test?

Past Venture Voice guest Guy Kawasaki announced in his blog today that he's developed the VCAT (Venture Capital Aptitude Test).

Anyone who's just dropped $100k and two years of their life on an MBA will be loathe to learn that their degree will cost them 5 points. And just when you thought you'd seen your last aptitude test!

On the other hand, Guy might be viewing freshly minted VC analysts with a glass-half-empty mentality. The wise anonymous blogger at Going Private points out that the VC gigs might save the world of more management consultants. She writes "For the small gift of just $175,000 per year and a reasonable carry, you can save an MBA from the horror of Booz Allen. That's less than $480.00 per day." Do your part today at Dan Primack's 4th Annual Internship Drive.

Posted by Greg Galant on Nov 29, 2006 | Permalink | Comments (0) | TrackBack (0)

Top Five Venture Capital Firm Web Pages

While VCs rightly demand that their portfolio companies have great marketing, they generally have awful marketing themselves. If you've ever been an entrepreneur in fund raising mode, you've read some line to this effect a million times on VC sites: "We partner with great entrepreneurs to build world-class companies." Just try Googling it.

Since I have yet to find the venture firm that openly aims to fund mediocre entrepreneurs to create miserable companies, I've always found this a case of stating the obvious. But, believe it or not, there are some cool VC sites worth checking out. Here's a list of the top five VC web pages. (Note: This does not rank the quality of the firms, just of their sites.)

Click to read more.

Posted by Greg Galant on Nov 12, 2006 | Permalink | Comments (0) | TrackBack (0)

Area Man Achieves Your Dream

As many guests have said on this show, there's little value in an idea that's not executed. The Onion illustrates this concept perfectly in a recent news brief:

Click to read more.

Posted by Greg Galant on Nov 8, 2006 | Permalink | Comments (0) | TrackBack (0)

How to be a Great Entrepreneur

How do you become a great entrepreneur? According to Fortune, the answer is practice, practice, practice.

The article specifically addresses how this relates to business:

Just one problem: How do you practice business? Many elements of business, in fact, are directly practicable. Presenting, negotiating, delivering evaluations, deciphering financial statements - you can practice them all.

The article does give some unattributed advice. There's a section called "Be the ball", which is advice famously given by Ty Webb in Caddyshack. It's hard to argue with advice on greatness from such a great movie.

Posted by Greg Galant on Oct 29, 2006 | Permalink | Comments (1) | TrackBack (0)

Success From Failure

You can't study entrepreneurship without studying failure. The New York Times recently offered an in depth account of Friendster's failure, but it's too early to see if anything good will come out of that failure aside from a classic case study.

The man with one of the best jobs in the world (making fun of cubicle life), Dilbert creator Scott Adams, writes in his blog that he's failed 9 out of 10 times in his own business ventures. However, he doesn't consider his early failures in vain: "I’m not complaining, since that’s the disgruntlement that led directly to Dilbert."

Posted by Greg Galant on Oct 22, 2006 | Permalink | Comments (1) | TrackBack (0)

The PayPal Alumni Club

Harvard, McKinsey and Goldman Sachs all have famous alumni clubs. There's an old joke that you hire the kid from Harvard because if he screws up, you can always say, "How was I suppose to know he was a dud? The kid went to Harvard."

If I were a venture capitalist, I'd fund the kid from PayPal in a heartbeat. The New York Times just published a great article titled It Pays to Have Pals in Silicon Valley, profiling PayPal alumni's adventures in entrepreneurship. These guys seem to be free of the baggage that hinders some second-time entrepreneurs.

We've interviewed PayPal's David O. Sacks and have recently recorded but not posted interviews with two other PayPal alums. Stay tuned.

Fun fact from the NYT article: "[Peter] Thiel tapped his network of friends from Stanford, many of whom had worked at the Stanford Review, a libertarian magazine that Mr. Thiel co-founded in 1987. They populated PayPal’s business ranks."

Posted by Greg Galant on Oct 18, 2006 | Permalink | Comments (0) | TrackBack (0)

Wall Street Journal Analyzes Facebook's Coolness Factor

The Wall Street Journal's reporting that Facebook's in acquisition talks with Yahoo! This isn't the first time there's been such speculation.

The WSJ repeats a familiar line when describing Facebook in its subhead: "Youthful Audience Is Fickle." The article goes on to say "As the Internet has sped up the life cycle of success and failure, it is possible some of these sites will flame out as their young devotees flock to the next thing."

Click to read more.

Posted by Greg Galant on Sep 21, 2006 | Permalink | Comments (2) | TrackBack (0)

Venture Voice on the Podium

Margaret Atwood has been quoted as saying "wanting to meet a writer because you like their books is like wanting to meet a duck because you like pâté." If her advice applies to podcasters, and if you want to do something unwise, then I thought I might share my upcoming speaking schedule for the next month with you:

• 9/19/06 Greater New York Alumni Career Panel & Networking Event: “Getting From There to Here”
  
• 9/30/06 Podcast & Portable Media Expo
  
• 10/11/06 Hofstra School of Communication: "Entrepreneur Journalism and Podcasting"

Posted by Greg Galant on Sep 18, 2006 | Permalink | Comments (0) | TrackBack (0)

Monday Morning Quarterbacking ODEO and The Chinese Woman

In July 2005, Ev Williams broke the news on our show that he closed a round of venture capital for his podcasting business ODEO. This was a very different style of business building than he had with his first startup, Blogger, that was bootstrapped and understaffed. Recently in a speech that was summarized by GigaOM's Liz Gannes, Ev issues a mea culpa and "went through a tidy list of the top five Odeo screw-ups."

Click to read more.

Posted by Greg Galant on Sep 16, 2006 | Permalink | Comments (0) | TrackBack (0)

The Other Side of the Mic

One of the most frequent compliments we get about Venture Voice is that we let the guests speak for most of the time by asking concise and focused questions. So in essence I’m being patted on the back for shutting up. Some would take that as a blessing, but because I do enjoy talking it’s nice to have a pulpit now and then. Eric Schwartzman provided me that opportunity by interviewing me for On the Record... Online.

Posted by Greg Galant on Sep 6, 2006 | Permalink | Comments (0) | TrackBack (0)

Startup Sold on eBay for $258,100 (or: eBay turns iBanker)

A web-based calendar startup called Kiko put all of its assets up on eBay a little over a week ago as its founder explained on his blog. As far as I know, this is the first time a technology company has essentially sold itself on eBay for a six-figure amount. Seems like a fitting way to exit for a totally web-based company. Putting Kiko on the auction block caused a lot of buzz: Techcrunch placed Kiko in the deadpool (they seem to have taken a page from Pud), GigaOM called the space "crowded" and our most recent podcast guest Jason Calacanis reminded us revenues (rev-a-whats?) still matters for a business.

One of the most interesting parts of this transaction is that eBay -- along with all the publicity generated about the auction -- essentially acted as the investment banker for this deal, not that any self-respecting i-banker would touch a deal this small with a 10 foot poll. According to eBay's fee schedule, eBay netted a cool $3,891.86 on this deal. After larger percentage fee on the first $1,000, eBay charges 1.5% of the closing price. You can only get that kind of low rate with pro i-bankers at the $100 million mark according to past guest Fabrice Grinda's blog post. Can selling companies on eBay scale and create a more efficient market for startups, or is this a one off success caused by a high profile failure?

Posted by Greg Galant on Aug 26, 2006 | Permalink | Comments (3) | TrackBack (0)

After Labor Day

If there are three words an entrepreneur dreads hearing in the summer, perhaps it's "after Labor Day". People such as venture capitalists and customers who take things called vacations (what's that?) often say this to entrepreneurs trying to schedule meetings. In the startup world, a few weeks is a long time. On the other hand, maybe this is a sort of forced semi-vacation for entrepreneurs.

Posted by Greg Galant on Aug 22, 2006 | Permalink | Comments (0) | TrackBack (0)

Lemonade Stand: School of Hard Knocks For Young Entrepreneurs

While there's no standard education to become an entrepreneur, almost every entrepreneur gets an early education in the lemonade business. The kids may be cute, but that doesn't mean they're not cut throat. In fact, Inc. Magazine just announced the Best Lemonade Stand in America Contest Winner.

Click to read more.

Posted by Greg Galant on Aug 15, 2006 | Permalink | Comments (1) | TrackBack (0)

Entreprendre: What Entrepreneurs Do

Jeff Cornwall, a professor of entrepreneurship, reminds us that "entrepreneur" is just a noun. A farmer can farm, but we can't simply say we're off to go entrepreneur.

Click to read more.

Posted by Greg Galant on Jul 18, 2006 | Permalink | Comments (0) | TrackBack (0)

Green Entrepreneur

Green can mean a lot of things to an entrepreneur. You can have a "green thumb" which means any business you're involved in will grow and make money. You can be "be green" as in inexperienced. To a new crop of entrepreneurs, however, being green means creating a business that benefits the environment.

Click to read more.

Posted by Greg Galant on Jul 8, 2006 | Permalink | Comments (1) | TrackBack (0)

Extreme Poverty Should Be Scared (Or The Hungriest Foundation Executive Ever)

"How can I top this?" was perhaps the only big question left on Bill Gates's mind after his tremendous success with Microsoft. Venture capitalist Bart Schachter wrote in a hilarious PE Week Wire column that his colleagues should thank God (or Gates for that matter) that Bill did not decide to become a VC as many successful entrepreneurs do.

Click to read more.

Posted by Greg Galant on Jul 3, 2006 | Permalink | Comments (1) | TrackBack (0)

Startup Workshop Success

The first ever Venture Voice Startup Workshop was a huge success. We've already received unprompted thank you notes from half of the attendees. Thanks to the speakers and attendees for making it so meaningful -- Entrepreneurship is a hard thing to communicate without getting a lot of fluff, but there is no fluff at our Workshop. Apologies to anyone we haven’t responded to yet, I’m already in Seattle for Gnomedex. We’ll post a podcast of the Workshop soon, but in the meantime you can view the photos on Flickr.

Posted by Greg Galant on Jun 29, 2006 | Permalink | Comments (0) | TrackBack (0)

Failure

Past guest, venture capitalist and former entrepreneur Brad Feld observes in his blog that "I’ve noticed a pattern in many of the VC and entrepreneur blogs I read – very few people ever talk about failure."

Click to read more.

Posted by Greg Galant on Jun 23, 2006 | Permalink | Comments (2) | TrackBack (0)

Added Startup Workshop Speaker: David S. Rose of the New York Angels

We've added David S. Rose, the founder and chairman of the New York Angels, to the Venture Voice Startup Workshop speakers roster. He joins Dick Costolo of FeedBurner, Scott Heiferman of Meetup.com, David Hornik of August Capital, Jeanne Sullivan of StarVest Partners and Tom Szaky of TerraCycle.

We've got all angles of the entrepreneurial process covered now, from entrepreneurs to angels to venture capitalists. The speakers have great diversity of backgrounds, geography, age and industry. They'll be a lot of great insights to share.

Posted by Greg Galant on Jun 20, 2006 | Permalink |