VC's scout out private companies as hawks do carrion? Well phrased, but not my experience. I find that VC firms feel overwhelmed by the sheer number of private firms vying to get their attention. If you are not connected, the golden key is an introduction or reference from someone already known to (and respected by) the VC firm. This does not require having gone to Old Ivy, or being "well connected" in the traditional sense. It does require getting yourself known to VC "feeders"--lawyers, accountants, legitimate intermediaries, successful businessmen, etc. And you can do this by attending or participating in the functions and events you outline. This introduction, no matter what form it takes, will distinguish you automatically from the faceless crowd, and often get you in the door for at least a brief introductory meeting with the right people. Without this, it can still be done, but it magnifies the amount of luck, persistence, and perserverance required of the start up entrepreneur.
My comment was far too general. The VCs who are visible are looking at companies for second and third round possibilities --- as well as networking with their competitors in general. The "carrion" is the hot new company started by a big name where everyone in the Valley wants a piece. Yet, in some form, most VCS are looking for first-stage/seed-round companies. I've spoken with engineers and technical types who've been hired to scout out new ideas. I'm not sure if they're looking for novice entrepreneurs as much as for other VC contacts. Networking seems to be the name of the game. All part of the connections you outline necessary to get your foot in the door.
There's almost a Mafia atmosphere on Sandhill Road when it comes to the best start-ups --- most if not all begun by managers who've already succeeded in their first adventures. You have to start somewhere. And conferences are a great place to meet those who can introduce you to the right people --- the feeder system you described so well.
Pat |
