So far, I’ve been hearing that funding is really prolific right now in the Valley. But not for everyone…
Here is a guy who has been experiencing trouble getting funding. He attributes it to:
1. He’s not part of the old boy’s network in silicon valley. not known to VCs.
2. Hasn’t had a previous company attempt, whether successful or not.
3. No personal brand to fall back on. Yahoo’s brand carried a lot of weight but going independent is rough.
Some thoughts, learnings, and advice:
1. Don’t work with any entrepreneurs who have an overinflated sense of self worth or demands. They’ll just be trouble later.
2. Gotta be hungry. Experiencing hunger motivates and drives success more than anything.
3. Contributing money derives commitment. Without appearance of money from all parties, you’re not really committed.
(We had a long discussion about how money changes people, and how people can change dramatically)
4. “Psycho partners” – what psycho means is relative to the eye of the beholder, but one can experience a lot of different sides of someone else’s personality when doing business with them and when money is involved.
5. New entrepreneurs don’t know how hard it is to start a business. it takes way more work than people realize.
6. Doing business with friends and family is tough. Always threat of losing friends and family, and there is an added sense of responsibility and seriousness when involving friends/families.
7. Take money when you can get it. It’s harder than you think to raise money. worry about spending it later. better to have more money than none.
8. Don’t worry about dilution now. Establish credibility, relationship, and get money over arguing about ownership.
VCs want:
1. “Big idea” and huge returns for their money, not just small returns.
2. “Lying” – or maybe exaggerating the truth about returns and goals versus being straight and telling it like it is has worked better for him in getting VCs excited.
3. They like big balls and vision. Don’t want people with small outloooks.
4. Like founders and engineers in the same office. Don’t like remote offices as much.