How to Be a Smarter Entrepreneur With VCs (New York Times) March 24, 2011 at 9:43 PM
The “Men are from Mars, Women are from Venus” analogy might not be that far
off when comparing venture capitalists and entrepreneurs. I spent four years
as a VC, and I’ve been the CEO of an e-commerce startup for the last two
years, so in yesterday’s opening piece, I gave some pointers to VCs, and
particularly associates, on how to better work with entrepreneurs. Today, I’m
going to give some advice to entrepreneurs based on my personal experience on
how to work smarter with VCs.
**It’s a numbers game. Expect casualties.** I’m not kidding. Preparing to
reach out to VCs, particularly if it’s your first time, is not unlike the
preparation one does when preparing for battle (and this comes from a former
air force pilot). You should prepare for a process that can take six or nine
months or even a year, depending on the market conditions. You need to prepare
for people with little knowledge of your technology or market who are
comfortable telling you that there is no market for your technology.
With VCs investing in very few companies, a successful entrepreneur has about
a 2% chance of securing funding. This means …
