A Blog from Gerbsman Partners Board of Intellectual Capital on “Maximizing Enterprise Value” for technology, life science, medical device and cleantech companies and their Intellectual Property
Having a big name VC on a firm such as Marc Andreessen matters more to startup founders than being funded by a big name firm, according to a new study.
Senior Technology Reporter- Silicon Valley Business Journal
Startup founders want big-name VCs like a Marc Andreessen or a Reid Hoffman on their side, not no-name firms.
And having women on the team at the firm matters more than funders think.
Those are two of the findings of a big brand study done for the National Venture Capital Association by Desantis Breindel and Rooney & Associates.
An overwhelming majority of founders in the study said VC brand means a lot to who they seek funding from.
But they disagree strongly in key areas about what is most important in that branding.
More than half of the venture-backed CEOs in the study (57 percent) said they care most about the reputation of a firm’s individual partners. Only 38 percent said they focus on the firm’s overall reputation and a mere 5 percent care about the reputation of the firm’s portfolio companies.
The gender gap may be a result of more women founders starting up companies than there are women making partner at VC firms.
One in four founders said the gender makeup of a VC firm mattered to them while only one in 10 VCs said they thought it mattered. But two-thirds of women founders said it matters to them.
Other findings of the brand study include:
— Proximity matters: About half of both founders and funders said that being located near their funders mattered to them, with about the same number saying that firms located in Silicon Valley, Boston and New York City are most attractive.
— Friendly but not too much: CEOs said they want a VC firm that is entrepreneur-friendly and collaborative but they are turned off if the firms have too much of a hands-on reputation.
— Peer networking: CEOs said the most important activity that VC firms can provide is a summit or meeting where they can learn from other founders.
Steve DiMeglio, USA TODAY Sports 5:17 p.m. EDT July 21, 2013
GULLANE, Scotland — As he wrapped up his practice session Sunday and started his march to the first tee, Phil Mickelson had a chat with his coach, Butch Harmon, who told his star pupil that even-par or 1 over could win the 142nd edition of the oldest championship in golf.
“I’m going to be better than that,” Mickelson told Harmon despite the fresh breeze blowing in from the nearby hay fields and the Firth of Forth.
No he wasn’t. Starting the day at 2 over and five shots behind — and one month after another heartbreaking loss in the U.S. Open — Mickelson made birdie on four of his final six holes on the brutally tough ancient links at Muirfield Golf Club to pull away from a tight pack stacked with the game’s best players to win the fifth major of his career.
Under overcast skies on a course stiffened by 20 days of sunshine that created a culture shock for both locals as well as players, Mickelson fired a final-round 5-under-par 66 — matching the low round for the week — to finish at 3 under and top Henrik Stenson (70) by three.
Four back were late-charging Ian Poulter (67), overnight leader Lee Westwood (75) and Masters champion Adam Scott (72), who made four consecutive bogeys on the back nine for the second year in a row in the British Open to cost him dearly.
“This is the greatest feeling I’ve had in the game,” said Mickelson, 43 years young who, you recall, went through 42 majors before winning his first in the 2004 Masters. “It’s probably the greatest round of my career.
” … I never knew if I would win this tournament. I hoped, but I never knew it … until about an hour ago.”
He won’t get any arguments that it is his greatest round from Zach Johnson, who said after tying for sixth that he didn’t see a 66 out there. Nor will he get opposition from his wife, Amy, who along with the couple’s three kids, was in step with Mickelson on the back nine. Nor will you get a rebuttal from his caddie, Jim “Bones” Mackay, who had tears in his eyes walking off the 18th and choked up talking about his friend after the round.
“When you work 21 years for a guy it’s pretty cool to see him play the greatest round of golf he’s ever played in the last round of the British Open,” Mackay said. “He hit it great, he putted great. … The guy has done a lot of really cool things on a big stage. He wants to be on the big stage, wants to hit big shots when it matters. Today he did that.”
While Mickelson, who moved to No. 2 in the world with the win, made his breakthrough in the British Open to add the Claret Jug to his three Masters titles and a win in the PGA Championship, world No. 1 Woods remained stuck on 14 majors. He now has made 17 starts in a major since winning his last in the 2008 U.S. Open at Torrey Pines. Another maddening weekend when he shot 72-74 hindered his chances.
“I’ve won 14 and in that spell where I haven’t won since Torrey, I’ve been in there. It’s not like I’ve lost my card and not playing out here,” said the four-time winner in 2013. “So I’ve won some tournaments in that stretch and I’ve been in probably about half the majors on the back nine on Sunday with a chance to win during that stretch. I just haven’t done it yet. And hopefully it will be in a few weeks (at the PGA Championship).”
And it wasn’t a merry old time in England. Favorite son Lee Westwood, the overnight leader who was looking for his first major title in 62 starts, failed to hold on to the lead he took to the inward nine. Desperately hoping to join the brilliant British Summer of Sport that has seen Andy Murray crowned the king of Wimbledon, the British and Irish Lions rugby squad win the tour series in Australia, and Chris Froome becoming the second consecutive Brit to win the Tour de France, Westwood stumbled with his usually superb iron play.
“I keep putting myself in contention,” said Westwood, who notched his eighth top-three finish in a major since the start of 2008. “I didn’t do a lot wrong today. I just didn’t do enough right. I know what I’ve got to work on.”
Mickelson hasn’t done much wrong for a while now, in large part because he works so hard on his game despite the steady march of age. He has three wins this season, winning the Waste Management Phoenix Open and last week’s Scottish Open, another triumph on a links course in Scotland which began putting to rest the criticism he heard about his poor play in the cradle of golf.
Despite his record sixth runner-up finish in the U.S. Open at Merion Golf Club near Philadelphia, which left him stung and hurting, Mickelson felt at ease all week. Despite a course baked to look like a tarp of charred hash browns, running Brickyard fast with pin placements that had players banging their heads in frustration, including Mickelson after the first round.
“You have to be resilient in this game because losing is such a big part of it. And after losing the U.S. Open, it could have easily gone south,” Mickelson said. “But I looked at it and thought I was playing really good golf. I had been playing some of the best in my career. And I didn’t want it to stop me from potential victories this year, and some potential great play. And I’m glad I didn’t, because I worked a little bit harder.”
Mickelson said he had to compose himself and slow his roll down the 17th fairway after hitting what he called the two best shots of the week — 3-woods to get home in two on the par-5. It was then he realized the title was his to lose, and he made sure not to stumble, calmly two-putting for birdie from 45 feet and then adding another birdie from 12 feet on the last.
Clutching the Claret Jug, Mickelson relished in joining an eye-popping list of winners at Muirfield, where members of the World Golf Hall of Fame have won 14 of the 16 Opens hosted by the club, including Gary Player (1959), Jack Nicklaus (1966), Lee Trevino (1972), Tom Watson (1980), Nick Faldo (1987, 1992) and Ernie Els (2002).
He was equally proud of mastering links-style golf a second week in a row, winning his first Open in 20 campaigns.
“The conditions and the penalty for missed shots in the Open Championship are much more severe … and it took me a while to figure it out, I would say,” Mickelson said. “It’s been the last eight or nine years I’ve started playing it more effectively. I always wondered if I would develop the skills needed to win this championship.”
It is the measure of a man, one could say of Mickelson, that despite his enormous success he still searches for what he doesn’t have. Presently, that’s a U.S. Open title to complete a career Grand Slam, won only by Woods, Nicklaus, Player, Ben Hogan and Gene Sarazen.
“I think that if I’m able to win the U.S. Open and complete the career Grand Slam, I think that that’s the sign of the complete great player. I’m a leg away. And it’s been a tough leg for me,” Mickelson said with a laugh, alluding to his misfortune in the national championship. “Those five players are the greats of the game. You look at them with a different light. And if I were able to ever win a U.S. Open, and I’m very hopeful that I will, but it has been elusive for me. And yet this championship has been much harder for me to get.”
But he’ll keep trying, Mackay said.
“He looks forward. He works hard. How many people are going to build a practice facility in his yard post-40? He wants it,” Mackay said. ” … He’s stronger than he’s ever been, he’s fitter than he’s ever been, and he’s hungrier than he’s ever been. And you can’t understate how much he wants to compete and do well. When he’s 60-something years old he’s going to be on the putting green at Augusta thinking he has a chance. That’s just how he is built.”
Ben Horowitz warns startups: You’re worth less today, and you need to be OK with that
Andreessen Horowitz Partner Ben Horowitz says the fundraising environment for startups is particularly tough today. He says investors are increasingly pushing for more equity for less capital, and founders need to be OK with that.
Contributing writer- Silicon Valley Business Journal
Legendary venture capitalist Ben Horowitz (who makes up the second half of Andreessen Horowitz) has a particularly bleak message for entrepreneurs raising money in the Valley right now: You’re probably worth less to investors today than you were the last time you raised money.
“If you are burning cash and running out of money, you are going to have to swallow your pride, face reality and raise money even if it hurts,” Horowitz wrote in a blog entry Tuesday. “Hoping that the fundraising climate will change before you die is a bad strategy because a dwindling cash balance will make it even more difficult to raise money than it already is, so even in a steady climate, your prospects will dim. You need to figure out how to stop the bleeding, as it is too late to prevent it from starting. Eating s— is horrible, but is far better than suicide.”
He’s partly talking to founders raising an A or B round—entrepreneurs who’ve been to the table at least once before, and raised earlier rounds at a particularly high valuation. The fundraising climate is tougher now, he says. Investors have more leverage and they’re increasingly pushing founders to accept “down rounds,” defined as funding that values their company for less than they were worth in a previous round.
“After, God willing, you successfully raise your round and it’s a down round or a disappointing round, you will need to explain things to your company,” Horowitz writes. “The best thing to do is to tell the truth. Yes, we did a down round. Yes, that kind of sucks. But no, it’s not the end of the world.”
Horowitz knows the feeling.
Twelve years ago, he and Marc Andreessen were entrepreneurs themselves, running a red-hot startup called Loudcloud. In June 2000, they raised $120 million from investors, at an $820 million valuation. By the end of the year, the dot-com bubble was popping fast, and they couldn’t raise another round. To stay afloat, they were forced to take the company public in 2001, at a $560 million valuation.
Describing that experience, Horowitz writes, “In some sense, you are like the captain of the Titanic. Had he not had the experience of being a ship captain for 25 years and never hit an iceberg, he would have seen the iceberg. Had you not had the experience of raising your last round so easily, you might have seen this round coming. But now is not the time to worry about that. Now is the time to make sure that your lifeboats are in order.”
Mike Michalowicz is the CEO of Provendus Group, a nationally recognized speaker and the author of The Toilet Paper Entrepreneur. EO
Sometimes the greatest lessons in life come from the least likely of places. For Mike Michalowicz, the Walmart founder’s last words changed the direction of his life and business.
So you’re one of those hardcore, work-until-sunset entrepreneurs, right? You’re a winner! I get it. And I applaud you … or at least I would have five years ago. In fact, I would have done the “I’m not worthy, I’m not worthy” hand wave dance for you back then. I might have even tried to kiss your feet. But today? None of that. Today, I feel sorry for you.
You see, a few years ago I was that guy. I was dead set on winning the entrepreneurial game. I wore the “workaholic” title like a badge of courage. I put everything I had into my business. And then one day, I had an epiphany. I realized something life-changing: On my deathbed, I won’t be saying I should have worked harder. I will be asking myself if I lived life to the fullest. I will wonder if I fulfilled my life’s purpose, and if I loved my family and friends unabashedly.
This “a-ha” moment occurred after learning of Sam Walton’s final words. By any measure, Sam is considered to be the ultimate entrepreneur. He took a small general store, revolutionized the retail industry and built his business into the mega-corporation that Walmart is today. During his lifetime, he was in regular contention for being the richest man in the world. And yet, it’s what Sam said on his deathbed that gave me pause. His final words were: “I blew it.”
Sam Walton blew it? How could that be? He was a full-time, always-there business man! He would do anything to grow his business, and it gave him immense fame and fortune! But that’s where the problem lies, because when it came to the rest of his life, Sam wasn’t nearly as dedicated. He was never really “there” as a father, husband and friend. He had the wealthiest pockets, but the poorest soul. And in those last minutes of his life, he realized where he had failed.
I wonder if the same would be true for a person who dies after having lived the richest life with family and friends they so loved, yet didn’t have a business success story to define them. I suspect that they won’t say, “I blew it.” The truth is, dying is a fact of life, and it will happen sooner than we want, especially if we don’t start working on the life part way more than the entrepreneurial part. Like Sam, I had made my business my top priority. But after learning how it all ended for him, I knew I had to make a change. I decided to put life first.
Looking back at his legacy, Sam Walton left us with the greatest entrepreneurial lesson of all time: It is better to have an incomplete business life than an incomplete human life. I try to keep that in mind as I work on my business. While it’s still important for me to achieve professional success, I no longer let it define me. Instead, I focus on building loving and meaningful relationships, because I know that on my deathbed, it will be the people I loved who will be there, providing me comfort … not a business or a bank account. Sam Walton is proof of that.
Senior Technology Reporter- Silicon Valley Business Journal
The Securities and Exchange Commission lifted a decades-long ban on open solicitation of funds by startups and fund managers on Wednesday.
The move was mandated by the JOBS Act more than a year ago, but was held up while the SEC studied how to implement the new rules.
The ban on general solicitation had forced founders and funders to solicit funds in private meetings and through word of mouth, although some new platforms such as AngelList have provided ways to be more transparent about fundraising.
The SEC said investment in funds and startups will still be limited to accredited investors whose liquid net worth is more than $1 million.
It also said that reasonable steps must be taken to assure that the investors meet that net worth standard.
Further, it will now require anybody doing a general solicitation to file a Form D with the SEC at least 15 days before starting their campaign. They must file a followup within 30 days of ending the solicitation.
It isn’t clear that established funds in Silicon Valley will start advertising since they prefer to raise money from large institutional investors.
Jacobs said that many VCs got started by raising money from their friends and from successful entrepreneurs but shifted to institutional backers later on.
“Those aren’t particularly reliable investors over the long haul,” Jacobs said. “Ultimately most venture funds want the stability of institutional backing.”
Alex Mittal, CEO of the FundersClub online venture capital platform, expects a wave of new offerings from funders and founders.
“In this new normal, issuers will be put under increased pressure to demonstrate the merits of the opportunities as well their own qualifications to investors, and investors will be wise to heavily scrutinize the reputation of issuers and the quality of offerings before proceeding with an investment,” he said in an email to me.
One immediate result of the SEC ruling was a satirical Twitter stream of possible hedge fund advertising slogans, such as, “Fee all that you can fee.”
Cromwell Schubarth is the Senior Technology Reporter at the Business Journal. His phone number is 408.299.1823.
