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July 20, 2003

What are VCs doing these days?



Here's a Q&A extract from Guy Kawasaki's latest column in Forbes.com

What are VCs doing these days? Are they investing at all or just goofing off?

The top four lies of VCs are currently: "We knew this was coming." "We have lots of dry powder to invest." "We're doing more deals this year than we ever have." "We think this is a time to build great companies." Meanwhile, golf handicaps are plummeting. (If you want to check out the handicap of your favorite VC, go to http://www.ghin.com/lookup/index.html.)

Did you say goofing off or golfing off?

Mostly VCs are looking for companies with three "provens": Proven teams, proven technology and proven sales. Ideally, they'd like a team that's sold a company to Cisco for $7 billion, won a Nobel Prize with its technology, and is profitably selling $12 million worth of stuff a year. That's an early-stage deal.

Unfortunately, using these parameters, no VC would invest in anything. Oops, there goes the next Yahoo!, Google, eBay, Netscape, Apple , or Cisco. However, there are notable VC exceptions. Sequoia Capital for one. In any case, it's tough to get an investment these days.

Click Here to read the full column.