The Startup Velocity Question: What Hinders Acceleration in VC Funded Companies?

I have been running 1Mby1M since 2010. I find myself saying to entrepreneurs ad nauseam that VCs want to invest in startups that can go from zero to $100 million in revenue in 5 to 7 years.

Startups that do not have what it takes to achieve velocity should not be venture funded.

Experienced VCs, over time, have developed heuristics to gauge what constitutes a high growth venture investment thesis. 

Women Entrepreneurs: How To Deal With Sexual Advances From VCs

Over the last few months, we’ve read a number of stories of male VCs hitting on women founders. These situations typically arise when the founder is an attractive woman.

My first observation about the issue is that a beautiful, charismatic, smart woman is extremely powerful. Often, young women who fit this description, are unaware of exactly how powerful they are. As a result, they do not fully appreciate the kind of impulses they trigger when they walk into a situation with one of the following categories of male VCs on the receiving end.

Let’s examine each of these scenarios in a bit more detail.

1. The Casanova: Many powerful, rich men have a track record of misbehaving. They have a Casanova complex. They chronically want to seduce. It is instinctive. If you run into one of these fellows, and get the impression that they are more interested in you as a sexual phenomenon than in your business, you should just move on. The dynamics CANNOT be changed. Don’t waste your time trying to. Just stop following up.
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Women Entrepreneurs: VC Rejection Does NOT Equal Sexism

I am stating the obvious – or at least what should be obvious – that rejection by a venture capitalist does not automatically equate to sexism. However, of late, the media has started sensationalizing a lot of stories of VC rejection and transposing them as stories of sexism.

These are two different issues, and the cause-effect relationships of the two are ambiguous at best.

In some of these stories, the VCs have exhibited rather stupid behavior, no doubt. However, did they reject the deals because the entrepreneurs were women? I don’t think so. Let’s examine in a bit more detail.
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New Book Launch – Bootstrapping With A Paycheck

Here is an excerpt from my new book on sale today, Bootstrapping With A Paycheck:

Entrepreneurs looking to launch their startups are often faced with myriad difficult decisions, chief among them being the question of seed financing. If you’ve ever found yourself asking, “How can I fund this?” or “Can I fund this on my own, while I’m still holding my current job?” the answer is yes—you absolutely can.

Vasu Akula and his two cofounders launched Voziq in late 2011 with one simple goal in mind: to help companies who purchase advanced analytics and business intelligence solutions better utilize the information they gained access to.

What makes Washington, D.C.-based Voziq unique is that Vasu and his partners didn’t utilize outside investors in order to bring Voziq to life. Rather, they funded Voziq themselves while holding on to their day jobs. Vasu is a part of the 1M/1M premium program, and one of the many entrepreneurs who have bootstrapped a startup venture while holding on to a full-time day job.
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What Corporate VCs Need To Do Differently

Corporate venture capital takes many different forms. The most common one is to help the parent company keep its fingers on strategic innovation. Typically, this includes both adjacent revenue opportunities, as well as new business areas, including some that may be disruptive to the company’s core business.

My main observation about what corporate venture capital needs to do differently from generic VC is around how the subject of TAM (Total Available Market) is considered.

In ordinary venture capital, more often than not, the goal is to identify billion dollar, hyper fast-growth business opportunities.

These, though, are extremely difficult to find.

There are, however, many more $100 million, $200 million business opportunities out there.
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10 Strategies For Angel Investors To Build Quality Dealflow

There are a handful of angel investors in certain startup hubs who see all the good deals. The rest, even if they want to source fundable companies, can’t seem to find them.

Then, the best deals get terribly competitive, hopelessly oversubscribed.

So if you are an angel investor (or a small VC fund) looking to build a solid early stage portfolio, how do you find good companies?

My take:

1. Build an investment thesis. What do you want to invest in? Can you add value in that domain? Why would entrepreneurs choose you over so and so?
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The Problems With Incubators And How To Solve Them

Excerpt from my book, The Other 99% (Entrepreneurs).

There is a very real knowledge gap in the early stage start-up game, on both sides of the table. First-time entrepreneurs lack the seasoning to captain a steady ship through turbulent waters. Inexperienced friends and family (and, increasingly, crowdsourced investors) lack the ability to gauge the viability of a business, or to mentor naïve entrepreneurs.

This knowledge gap, I have come to believe, is best filled by savvy incubators. However, there are over 7,500 business incubators around the world. Most of them fail.
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Why Corporations Should Train More Intrapreneurs

Consider this scenario:

A large technology corporation has a few hundred products that are sold to thousands of enterprises and small-medium businesses.

Because of the fast pace of change in technology, every single product in the portfolio experiences market pressures of various kinds. Competition from startups. Integration requirements with external products. Architecture changes in the technology stack. New capabilities due to new discoveries.

How does such a corporation stay on top of the constant need to innovate, and not get disrupted by an upstart?

My answer: Train the Intrapreneurs.
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Domain Knowledge Drives SaaS Unicorns

We’ve looked at a number of Unicorn companies so far: Tableau, FireEye, RightNow, Palo Alto Networks,Kayak, SuccessFactors, and Marketo. Today’s featured company is ServiceNow.

Fred Luddy, the founder, was a classic nerd. After meandering his way through various companies as a programmer, he ended up as the CTO of Peregrine Corporation that built software for the help desk and service desk markets. Peregrine acquired numerous companies and eventually grew to $500 million in revenues, but filed for bankruptcy due to accounting irregularities in 2003.

Fred, however, developed domain experience with the IT service desk market through that process. He decided to start a SaaS company in that space. >>>

5 Thought Leaders In Cloud Computing To Follow

A recent report released by Markets and Markets estimates the global cloud computing spend to grow to $121.1 billion by 2015, recording a compounded annual growth rate of 26% over the period 2010 through 2015. Another report by Market Research Media expects strong growth within cloud computing to continue. The report projects a 30% annual growth rate over the five year period from 2015 with the market expected to be worth $270 billion by 2020.

On my blog, I write an interview-based series called Thought Leaders in Cloud Computing where we invite industry folks with interesting vantage points to come and share their points of view about the industry and its trends, gaps, blue sky opportunities.
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Deconstructing The Cloud – From New Book, Carnival In The Cloud

Excerpt from my new book, Carnival In The Cloud, on sale today.

At the turn of the millennium, a new form of computing swept over the world.

Netscape went public in 1995, heralding the birth of technology’s most exciting gilded age. David Einstein of The San Francisco Chronicle had interviewed John Doerr, General Partner of Kleiner Perkins, as he covered the incredible interest in the initial public offering of the Netscape stock, and the madness that followed.

Doerr famously said: “It’s possible that the Internet in fact has been underhyped. I think we’re witnessing the creation of a brand new medium that will possibly be more important than network television.”

Indeed, the twenty first century has seen that under-hyped technology trend boldly and assertively come of age.
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