Why Question Venture Hacks?
VentureBeat posted a story earlier this evening about a new entrepreneurship blog called Venture Hacks. The blog is written by two entrepreneurs that have played key roles in venture backed startups including Vast, Songbird and Epinions as well as working on the other side of the table in non-partner positions at blue chip VCs like August and Bessemer.
Despite these qualifications, I was surprised to read a negative comment on the VentureBeat article questioning the validity of the authors experiences. The comment's author wrote:
"Should a couple of unproven dotcommers really be dispensing advice about how to deal with VCs? Vast.com? Music browser Songbird? These guys are the gold standard?"Why would anyone would want to discourage entrepreneurs from writing about their experiences? Dealing with VCs and building a successful startup are not necessarily the same thing. Also, one can learn a lot from failure. I know I did. Neither of the Venture Hacks authors have had a runaway success but that doesn't mean other entrepreneurs can't learn from their experiences. Furthermore, I believe that the bar for raising capital from professional investors is much higher than most people realize. Venture capitalists perform extensive due-diligence on there prospective investments and one of the most important things they look for is talent on the management team. Thus, there aren't many slouches who have successfully raised venture capital and I'd be willing to bet that the Venture Hacks guys are pretty sharp.
For me the bottom line is that I want to encourage entrepreneurs to share their experiences so that we can all help demystify the process of raising capital. Misinformation about the process of raising capital leads entrepreneurs and investor to both waste lots of each others time. Understanding what an executive summary looks like or what issues to address in an investor power point presentation isn't rocket science and there are no rational reasons to be secretive with this information. Everyone in Silicon Valley benefits from lowering the transaction costs of funding startups, which means more companies get funded, more jobs get created and tax revenues increase without raising taxes.
Shouldn't executing disciplined business plans around new technologies be the challenge of entrepreneurship? Contacting prospective investors and understanding what they want to hear should be the easy part.