On July 14th, we had our first BizSessions event (which i helped get off the ground) in a San Francisco venue.  

The general purpose of the event (www.bizsessions.com) is to help tech entreprenuers get more insight into business side of making a successful startups.
The theme for the first event was funding in current cash startved times in which we explored the state of the VC industry, the growing trend of smaller early-stage VCs and the entrepreneur perspective on running a start-up without funding vs. taking VC money.
The panel included 4 members (two entrepreneurs and two VC members):
Jonathan Abrams – founder of Socializr and Friendster was talking about the trend of startups requiring less capital to get off the ground due to opensource platforms, cloud computing ,etc. and predicted that we will see more lean startups and less big VCs. Jonathan shared he had a bad experience with big VCs in the past that had ousted him from Friendster in the past and was very fond of the new generation of small early-stage VCs like Y-combinator and First Round Capital.

Igor Shoifot – Founder of Fotki a photo sharing start-up that has not taken VC money, has 1.5 million users and is running for 10 years now.

Kent Goldman – Principal at first round capital was there to share his theory about how smaller rounds at smaller intervals privde a better aproximation of value to the company (as mentioned before, first round is one of a few VCs that deal with small early-stage rounds). and the value of dealing with early-stage VCs rather than angels and large VCs.

Ping Li – Partner at Accel Partners (one of the largest VCs in the valley) who shared his view of how top-tier VCs are changing in the current economy (Less VCs,  but same size of deals for the ones that remain) as well as to defend the top-tier VC model.

I was the moderator for the panel. 

 

 

 

 

The key takeout from the discussion:
1. open source and cloud mean that a start-up in 2009 is orders of magnitude chaper than one in 1999 for getting a product out the door.
2. Lean is definitely in (pets.com sock puppet is not going to make a comeback this year with its famous 700 million dollars evaporation act).
3. while it is true for the development phase of a start-up, no sucess stories as of yet of facebook/youtube/twitter like success without big VC money.
4. Big VCs are here to stay and still have the funds to invest in promising and succesfull start-ups.

My personal thoughts on the subject:
1. while creating a tech company is increasig in its efficiency, for both consumer and enterprise companies the major cost will and always be spreading the word and making money and as we all know, it takes money to make money.
2. if a start-up is promising it will get capital for cheap and will always take it – it wasn’t easy for us to find a successful star-up that didn’t take or was trying to get money from VCs
3. for a young team a good set of angels that have walked the walk  and are commited to help should always be prefer in a seed round to small early-stage VC.
4. It is more important to look at the specific partner you are working with than the VC name as eventually they will be the one on your board navigating the company with you.
5. If the partner is right, a top-tier VC is always prefers as the brand name and deep pockets will make your life much easier (customers, prospects, etc.)

 

We are having our next event towards the end of August, looking forward to seeing those of you local to the bay area there.