VC Cliche of the Week

Q. What is the venture capitalists' favorite sight coming into his office?

A. A serial entrepreneur.

What is a serial entrepreneur?  It's a person who can't stop starting companies.  A person who has done it at least two or three times.  A person who has been very successful at starting companies and enjoys doing it so much that they can't stop themselves.

I've said this before and I'll say it again.  The raw material for venture capital is entrepreneurs. Without them, we have no business.

So the ones who are the most experienced, the most passionate, and the most successful are the diamonds of the raw material of the venture capital business.

I love serial entrepreneurs.  I haven't met a VC who doesn't.

I was insprired to make serial entrepreneurs my cliche of the week by this blog post on Artists vs. Entrepreneurs.  Here is the part of the post that inspired me:

there emerges a huge problem- entrepreneurs are indeed very much like recording artists- except they get far worse of a deal. Whilst painters, musicians and sculptors may have the opportunity to produce hundreds if not thousands of works prior to seeing maybe three or four become really valuable and accepted, entrepreneurs are limited by nature of their art to making maybe four to six works over their career.

Whilst of course the above is not news for anybody, this severe concentration of risk that entrepreneurs face is a huge, huge problem- probably not for the economy- but for entrepreneurs them selves. Can you imagine if the Beatles produced one record in the beggining of their careers and refused to make anymore because that make would mean they were unfocused? I think, over time, an approach that effectively deals with uncertainties faced by founders will creep in to become a more widely accepted way of doing business.

I agree with the person (in australia?) who wrote this post.  The best serial entrpreneurs will probably figure out how to do more than four to six startups in their careers, but the four to six number is probably a good one to work with.

The upside for entrepreneurs on each deal is a lot higher than the VC's upside, but the portfolio diversification that VCs get is a lot more attractive than the "concentration risk" that the entreprenerus face.

This makes me think that serial entrepreneurs do it for the fun and passion not so much for the money.  Every day, I wake up and thank god there are people who love starting companies so much that they accept the risk and go for it, time and time again.

Comments

[David]

Fred - you nailed it this time for sure! ;-) I started writing communications software back when I was 14 and released my first product for sale before my 16th birthday. At the same time I founded an online service (not a BBS, this was a planned competitor to Compurserve based on chat, forums, etc.) Nobody would fund me back then, so I ended up dropping the project, but it set the seeds for my future. This continued on and off through college where I dropped out and started my internet company in 1991. In '94 I started the first ISP in NE Wisconsin and spun off one of the first pure interactive web development firms in late 94. (they're still in business today working with the NFL and other Fortune 1000 customers). My current email security company I founded in 1999, and soon afterwards I sold my ISP as it wasn't a good portfolio fit anymore and I could get a better ROI by moving the cash assets into my email security company.

My wife both loves and hates my nack for starting new companies. I'm more selective today than I used to be, but my little back book has tons of ideas for new businesses - all from where I see "friction" that a new company can reduce and make market share for itself.

My employees also share this philosophy and the development team is always looking at other ways to leverage our technologies into other markets, etc.

I'm not like most other folks I see trying to raise VC monies.... even if I don't raise money, I do the businesses that I plan. Typically I'll rish my own money in the early stage development evolution of a software company and when we've created the product and it's a viable product for the market, then I go seek VC funding to take it to the world.

Fred - I'm sure you might disagree with this bootstrap methodology, but I think it has forced us to be lean and mean in terms of burn rates, expenditures, etc. so that when we do get funding we properly utilize the cash to it's greatest ROI.

David

[fred]

i don't disagree with bootstrapping. i think its the best way to build a business. vc money is too dilutive to be used unless you have really need it.

[David]

Fred - I agree. Now we're to the point that we need additional funding so we're doing a (small) round. Being that the funds needed are small ($2M) we're going with individual investors and not organized VC. Even though we're not talking to organized VC, they're calling with the mindset of "as long as your raising money, and you can get $2M, you can easily get $4M, which means we want to talk to you about this round."

I see where they are coming from, and if we can raise more money in the same timeframe, the question I need to answer turns to, "You know what you can do with $2M, so what could you do with $4M or $5M? Can you acheive results faster and/or get more market share as a result? And what's that worth to you?"

Am I missing something?

David

[David Gilford]

Fred -

Have you read Paul Kedrosky's post on The Myth of the Serial Entrepreneur? He tries to explain why the much-loved serial entrepreneur is in short supply, at least among people seeking VC funding. A snippet:

[...] my hunch is that for every ten entrepreneurs who has a seven-figure exit from their first venture only five or six bother to try again. And for every ten that has an eight- or nine-digit success the number of repeats falls even faster, rapidly heading towards one -- or, asymptotically, toward zero.

(Granted these ratios change from country-to-country and era-to-era, but it is a good first approximation.)

Why the die-off in repeat entrepreneurs? Because frankly, even entrepreneurs are prone to saying no mas. Faced with the idea of 18-hour days and seven-day work weeks people are happy to sit on boards, advise other companies, travel, become venture capitalists, ski, fix their house, do angel investing, and so on. They don't feel as obliged as entrepreneurship dogma says they do to do it all again. After all, if they were more eager to do it again then it wouldn't be so darn hard as a venture capitalist to find more successful serial entrepreneurs -- they'd be everywhere, and they sure aren't.

I'd be interested to hear whether this breed is as rare as some people think...

[Jeff Matisoff]

I posted yesterday on my blog (broadwayfrontofhouse.blogspot.com - dedicated to the Broadway Theatre Industry) about producers who face the occasional failure and the occasional success who are somehow able to get right back on the horse - and how strong they must be to be able to do just that. Thinking of them as serial entrepreneurs - which thanks to you I realize they absolutely are - suggests that they do it because they have the passion, the love, the need. They still might be crazy, but where would I be without them?

[Fred Holahan]

Fred,

I'm a couple of years into my third venture. The first two exited successfully via acquisition. What keeps me coming back? It's pretty basic, actually - I'm a builder ... of software, of teams, of companies. There is something in a venture about balancing creativity and science that has just the right symmetry for me. And the fact that I have had the same incredibly talented co-founder in all three companies has been a huge motivator to jump back in at the conclusion of our prior projects.

I've learned things about myself over the course of my ventures (or "adventures", as my father, a lifer at Polaroid, refers to them). Among those lessons, I've come to believe that fretting over risks and rewards is mostly a waste of time. These are "leap of faith" topics. A person either has, or doesn't have, the cast iron gut to tolerate massive risk. I believe that risk preferences are pretty much baked into peoples' DNA, and entrepreneurs with high tolerences don't burn a lot of cycles thinking about risk.

As a first-time entrepreneur, I often thought about reward senerios. After a while, though, I got tired of doing the math and figured out that building things and helping them to grow was much more satisfying. My obsession about potential rewards was replaced by an obsession to work with really smart, creative people to solve really thorny problems. I've never looked back.

My point in all of this is I do believe that some people are wired from the get-go to try their hands at a venture. Of those, the ones who are most likely to jump back in are those capable of internalizing the lessons that are born from failure and success, because that knowledge makes the next building experience even more interesting. Entrepreneurs whose primary motivation is money are less likely to return for another bite once they've achieved their financial goals.

Fred

[Beef Jezos]

Speaking of serial entrepreneurs, there's a site for them at www.startupjunkies.org.

[ZF]

There is an overlap between people with a taste for doing business and people who have are drawn irresistibly to do things which nobody has ever done before.

As you observe, it's not very large.

Happily into my fifth decade, three years into my fifth start-up, just days away from finding out if it is going to work.

A way to lay off some of the risk sounds nice, but this time around I was offered that and turned it down.

Actually I think it's more accurate to say that giving up more control, even to our very friendly VC who has invested in me before, seemed like an increase in risk.

I enjoy your blog.

[Jason]

"... they can't stop themselves."

That resonates.

Each of the startups I've done, Restaurant City, Silicon Alley Reporter, VentureReporter.net, and WeblogsInc.com, I had no choice but to do. Once my mind got working on them I couldn't stop myself.

My belief has always been that being delusional is one of the biggest assets a entrepreneur can have... you really have to believe that what you're doing is going to happen. You have to look at it as if completing the mission is your destiny.

Of course, there is something to be said about VCs who can't stop placing bets on people. :-)

I mean, you've never thought about starting a company right? So, in some way your a compulsive gambler.... you really believe in people--you want to believe in people right?

Except VCs in some ways they are coaches betting on their own team. They want to find Michael Jordon, back them, and coach them.

The best VCs are addicted to setting up the situation in which people can win... like Phil Jackson or Pat Rielly.

We're all very, very sick people... but what else would we do with ourselves?

[ad aware]

ad aware - antivirus - antivirus gratuit - bitdefender - blague blonde - blague humour - clone cd - edonkey - emule - emule telecharger - firewall - horoscope chinois - jeux a telecharger - kazaa - kazaa lite - kazaa lite telecharger - kazaa telecharger - logiciel antivirus - logiciel a telecharger - messenger 7.5 - messenger msn - mp3 gratuit - mp3 telecharger - msn 7.5 telecharger - msn-messenger 7.5 - msn messenger 7.5 telecharger - msn telecharger - musique mp3 - nero - nero 6 - nero burning - nero burning rom - norton 2005 - norton antivirus 2005 - recette de cuisine - skype - tablature guitare - tarot - telecharger acrobat - telecharger antivirus - telecharger antivirus gratuit - telecharger chanson - telecharger clone cd - telecharger codec divx - telecharger divx - telecharger divx gratuit - telecharger divx gratuitement - telecharger divx player - telecharger emoticone - telecharger emoticone gratuit - telecharger emule - telecharger emule gratuit - telecharger e mule gratuit - telecharger emule gratuitement - telecharger e mule gratuitement - telecharger fr - telecharger kazaa en francais - telecharger kazaa gratuit - telecharger kazaa gratuitement - telecharger kazaa lite - telecharger logiciel divx - telecharger logiciel gratuit - telecharger messenger - telecharger messenger 7.5 - telecharger mp3 - telecharger msn 7.5 - telecharger msn 7.5 francais - telecharger msn gratuitement - telecharger msn mesenger - telecharger msn messager - telecharger msn messenger 7.5 - telecharger msn messenger 8.0 - telecharger msn messenger gratuit - telecharger msn messenger gratuitement - telecharger msn plus - telecharger music mp3 - telecharger musique gratuite - telecharger nero - telecharger nero 6 - telecharger nero gratuit - telecharger nero gratuitement - telecharger norton antivirus - telecharger norton antivirus 2005 - telecharger shareaza - telecharger shareaza gratuit - telecharger shareaza gratuitement - telecharger skype - telecharger winamp - telecharger winzip - telecharger winzip gratuit - telecharger yahoo messenger - winmx - zodiaque - zone alarm

[amateur couple]

amateur couple amateur gay amateur gratuit amateur libertin amateur nu amateur porno amateur sex amateur sexe amateur video amateur webcam amateur x amateur anal fisting anal anime asiatique nu asiatique bite black anal blacks on blonde webcam gratuit webcam sexe femme black webcam chat cul cul gratuit couple amateur erotique ejac feminine ejac facial defloration coquin blonde salope bondage voyeur gratuit erotique gratuit bukkake cul de femme black teens ejac faciale chatte chatte humide double anal film x amateur free porn movies femme mature femme nu femme erotique femme facile xxx fetichisme femme mure film amateur femme en chaleur femme cochon film sexe femme sex x amateur femme coquin femme mure nu femme sexe fille facile femme nu gratuite film sexe gratuit femme photo hardcore gros penis grosse salope hentai x histoire erotique young porn gros teton gratuit sexe jeune gay video grosse femme grosse bite jeune femme gros sein gros cul gros sexe jeune amatrice hentai jeune chatte jeune femme nue hard sexe jeune lesbienne mangas erotique jeune nu voyeur france mangas sexe jeune vierge mature lesbian mature gratuit lesbienne nu mamie jeune gay masturbation femme lesbienne photo lesbienne gratuit lesbienne gratuite jeune sexe jeune salope lesbienne jeune fille voyeur mature mature sex sex mangas sexy lingerie video coquin video de cul transsexuelle sexe video sexy mature triple penetration video amateur video amateur x sexe vieille sexe mature sexe porno sex xxx teen amateur sexe webcam sex femme video cul gratuit sexe video gratuit teen porn sexe video gratuite sex mature sexe photo mature women photo gratuite sexe photo de cul photo gay gratuite photo de cul gratuite photo amateur mure petite chatte photo salope photo lesbienne mature sexe video hentai video lesbienne photo gay gratuit photo femme video erotique partouze photo cul gratuite photo sexe amateur photo de chatte penetration photo gratuite femme nu photo fille photo xxx portail du sexe photo sein photo sexe gratuit video salope porn porno asiatique photo sexe porno mature porno black sein de france video mature photo sexe gratuite sein salope gratuit photo transsexuelle porno amateur photo voyeur porno sexe poitrine salope salope gratuite video sexe sexe femme video xxx gratuit sexe hard gratuit sexe fr sexe amateur gratuit sex amateur gratuit sexe en direct sexe gratuit photo sexe hard sexe gratuis sexe gratuit sexe feminin sexe amateur sexe gratuit video video sexe gratuit video xxx sein enorme sein gratuit sexe sexe gaulois sex amateur sexe extreme sexe hardcore blague codec divx ad aware antivirus divx a telecharger antivirus en ligne chanson a telecharger codec telecharger carte postale ancienne antivirus gratuit blague humour divx codec carte postale virtuelle blague blonde divx dvd clone cd bitdefender carte postale antivirus a telecharger antivirus gratuit a telecharger emule telecharger gratuit film gratuit a telecharger film porno a telecharger film porno gratuit a telecharger film x a telecharger fond d ecran a telecharger horoscope horoscope cancer divx gratuit edonkey edonkey 2000 emoticone a telecharger emoticone a telecharger gratuit emule france emule gratuit emule telecharger film a telecharger emule film x gratuit a telecharger firewall horoscope taureau horoscope verseau jeu a telecharger jeu pc a telecharger jeux a telecharger jeux a telecharger gratuit jeux a telecharger sur pc jeux de voiture jeux flash a telecharger horoscope capricorne horoscope chinois horoscope du jour horoscope gemeau horoscope gratuit horoscope lion horoscope poisson horoscope sagittaire horoscope scorpion horoscope vierge imesh kazaa msn messenger 7.5 telecharger messenger 7.5 mp3 gratuit telecharger mc afee logiciel gratuit mp3 gratuit msn messenger telecharger kazaa telecharger messenger mp3 telecharger logiciel antivirus msn messenger plus kazaa lite telecharger kazaa lite logiciel architecture mp3 telecharger gratuit msn 7.5 telecharger msn messenger 7.5 messenger msn recette partition guitare nero burning rom partition de musique musique mp3 musique mp3 a telecharger nero 6 norton antivirus 2005 nero express nero norton 2005 musique a telecharger gratuite musique musique a telecharger gratuitement norton musique a telecharger gratuit nero burning musique a telecharger msn telecharger partition gratuite recette minceur recette de salade shareaza telecharger recette gateau chocolat recette punch recette courgette recette gateau recette cocktail sims 2 telecharger recette sangria recette pain recette facile sims 2 telechargement recette paella recette crepe recette de cuisine recette dessert recette de julie recette de confiture recette barbecue telecharger kazaa lite gratuit telecharger emule telecharger les sims gratuitement telecharger kazaa little telecharger kazaa gratuitement telecharger gratuitement msn telecharger kazaa lite telecharger emoticone telecharger emule gratuit telecharger kazaa en francais telecharger gratuitement kazaa telecharger e mule gratuit telecharger gratuitement msn messenger telecharger divx gratuit telecharger les sims 2 telecharger les sims gratuit telecharger jeu flash telecharger kazaa gratuit telecharger gratuitement logiciel telecharger emule gratuitement solution jeu telecharger divx solution jeu video telechargement gratuit de film telecharger clone cd telechargement film x gratuit telechargement logiciel telechargement film divx telecharger antivirus gratuit solution telecharger codec divx telechargement film telecharger chanson skype telechargement film porno gratuit telechargement film porno telecharger acrobat reader telecharger antivirus tablature guitare tablature telecharger mp3 telecharger mp3 gratuitement telecharger msn telecharger msn 7.5 telecharger msn 7.5 francais telecharger msn 8.0 telecharger msn gratuit telecharger msn gratuitement telecharger msn mesenger telecharger msn messenger 7.5 telecharger msn messenger 8.0 telecharger msn messenger plus telecharger msn plus telecharger music mp3 telecharger musique gratuite telecharger logiciel divx telecharger logiciel gratuit telecharger logiciel mp3 gratuit telecharger messenger telecharger messenger 7.5 telecharger winamp telecharger windows messenger telecharger winzip telecharger winzip gratuit telecharger yahoo messenger zone alarm telecharger nero telecharger nero 6 telecharger nero gratuit telecharger nero gratuitement telecharger norton antivirus 2005 telecharger shareaza telecharger shareaza gratuit telecharger shareaza gratuitement telecharger video telecharger video porno gratuit telecharger video sex telecharger video x