Extracts from Joe Kraus, co-founder of search engine company Excite, recent 2-part blog post - here and here - (on the importance of persistence) provide a good idea why Vinod Khosla of Kleiner Perkins' is considered "an entrepreneur's dream VC":
Another instance (post funding):
While we were still in the garage (literally), we met with at least 15 different venture capital firms. The meetings we're all the same. We showed them our search technology, showed them "concept-based" search, and showed them targeted advertising. To a firm, the first question they asked was a very reasonable one: 'great stuff guys, but what's your business plan? how are you going to make money?' Of course, being 22 years old and fresh out of college we replied, 'we thought you could help us out with that.' Apparently, that's the wrong answer. Who knew?
Rinse, lather, repeat.
Then we met Vinod...
By then, our deal had developed a certain "smell" -- smart guys with interesting technology but an uncertain business plan. The demo to Vinod started off like they all did, but about 10 minutes into the meeting things got very different. He interrupted
"Can the technology scale? can you search a large database?"
Big Pause. It's not the money question. No one has ever asked us this before. Ummm.
"We don't know, we can't afford a hard drive big enough to test."
Then, an amazing thing happened. Ten minutes into this meeting, his first introduction to the company and us, he pulls out his his cell phone, dials his assistant and buys us a $10,000, 10Gb hard drive.
Another instance (post funding):
Back in those days, the Netscape browser had two buttons in the chrome that don't exist today. They were called NetSearch and NetDirectory (NetSearch, of course, became Search but NetDirectory disappeared into the ether). That summer, Netscape let it be known that they were going to put the destinations of those buttons up for bid. Previously they had given, for free, the NetDirectory button to Yahoo and the NetSearch button to Infoseek.
This was the premier beachfront real estate on the web up for bid. We were terrified. We needed to get it...
...We were screwed because we didn't have enough money to compete. How were we going to outbid MCI? A freaking phone company? Infoseek had more money and more users.
We gathered the troops and I distinctly remember sitting on the floor of my office with a big chunk of our small company and Vinod (Arun's emphasis and note: He was there when Excite needed him). And suddenly the right answer appeared.
We were going to bid $3,000,000.
It was Vinod who suggested it. Forced us into really. (Arun's emphasis). We had $1M in the bank and we were bidding $3M. How was that going to fly?
Vinod made a critical point. If we don't get this deal we're nowhere. If we do get the deal, we can probably raise the money on this victory alone.
Strangely enough it felt right. A bit irresponsible perhaps, but in reflection it was truly a bet-the-company moment and we bet big. It was appropriate.