Archive for the ‘IDG Ventures’ Category

Four Tips on Raising Venture Capital

29 November 2008

cartoon4Friends occasionally seek my advice on raising venture capital, knowing I’ve been involved with a range of VC financings – from seed, through A, B, and C rounds, to investments by a “strategic partner,” to venture debt financing, through to trade sales.

Today I pass along four sources of advice – with a bit of my own advice thrown in for good measure – ranging from advice for the person wanting to plan for all their VC rounds as they are just starting out (analogous to the plan-ahead friend seeking advice on the process of finding that perfect person to marry,) to advice for the person just days from making a big VC pitch (analogous to the last-minute friend seeking advice the night before he’s going to propose!)

So whether you’re the long-range planner or the last-minute proposer, maybe you’ll find one of these right for you.

“Raising Venture Capital for the Serious Entrepreneur” by Dermot Berkery

antiaprilfools1Dermot’s advice is for the long-range planner.  Dermot was the first person my wife Jules and I met when we landed in Ireland on the first of April 2001.  Gratefully, he didn’t immediately laugh when we told him our plan to move to Ireland without jobs – “On spec?” he asked  – with our 6, 9, and 12 year old boys.  Rather he copped on right away that this was not an April Fools Day joke.  Months later, a fellow Irish VC described Dermot thusly:  “Des, Dermot’s an oxymoron because he’s both a (more…)

Every CEO Facing a Series B Financing Should Follow Jeff Bussgang’s Advice

27 February 2008

series-b-big-bird.jpgEvery CEO with a Series B coming up in the next 6-12 months would be wise to use this post from Jeff Bussgang (General Partner at Flybridge Capital Partners, formerly known as IDG Ventures) as the ‘roadmap’ for his or her actions. Instead of learning what VCs will require from trial end error, using Jeff’s roadmap would allow a CEO to provide — on their first Series B presentation — exactly what the VC expects. And rather than waiting until the Series B time arrives, the CEO should today put a list on the wall of Jeff’s required items; then put together an action plan to obtain each item over the next six months.

Preparing a company for a Series B (which I’ve done a number of times, often in the role of interim CEO / COO) reminds me of preparing for a ‘phase review’ when I was a product manager years ago. Though some people dreaded preparing for such a phase review, I found that — if my product development program (including the go-to-market component) was under control — then providing all the data requested at a phase review was not difficult.

Similarly, for a start-up company, the data Jeff says is required for a Series B is really the data you should normally have to operate the business in the Series A phase: an accurate sales pipeline; customer references; a product road map; financial projections; market analysis / potential, etc. are really all things that should be part of your normal operations. If that’s the case, then pulling together the Series B package will be a reasonable process.

If you’re a CEO facing a Series B in the next year save yourself a lot of pain and heartache and follow Jeff’s advice.

Added 17 March 2008: IDG Ventures announced their third fund ($280 million) and a name change to Flybridge Capital Partners. Check out Jeff Bussgang’s post for the reasons why.