Handling Your VC Prospect

Email from me to Inc.com editor:

Here's a question for you though...should we "introduce" me in a first column? I mean, who the heck am I to be dispensing advice? Why am I qualified?

Editor to me:

That's a great idea. Let's make a point of doing that, and also include maybe a mini-column within it -- to give readers a taste of what's to come.

Me? I'm an ex-venture capitalist who sometimes (and I stress sometimes) makes personal investments. First with CMGI@Ventures, and then later with a firm, Flatiron Partners, that I founded with my partner Fred Wilson, I was one of the more active VCs in the Internet-age.

After helping to invest nearly $600 million, and returning a few billion dollars, after helping to launch some 70 companies (watching some thrive, become public and others die), I was tired. So, in 2001, we merged the operations of Flatiron into those of JP Morgan Partners, our sole limited partner. A few months as a partner at JPMP, and I realized I wanted out for good. I never thought I'd grow up to be a venture capitalist and, while I still enjoy much about the business, I was tired, burnt out and looking for a chance to do more with my life.

Before becoming a VC, I'd worked for a company called CMP Media, rising from a summer intern at Information Week magazine in 1985 to Editor of the magazine in 1990, and then director of editorial technology for the company.

I told then CEO Mike Leeds that I was worried about the future and I wanted to worry about it some more. We cooked up a new job, director of interactive media and I - along with a brilliant and recent employee named Kelly Post - started working on the company's centralized electronic publishing unit.

I remember the day when a fellow up-from-the-reporting-ranks senior manager named Mike Azzara came into my office (well, really, it was a cubicle but office sounds better---more important) and showed me this thing called Mozilla. March 1994 was the first time I browsed the Web.

I joined CMGI to help start its @Ventures unit that January. A year and a half later, I left to start Flatiron with Fred.

So now I split my time mostly between sitting on boards - playing consigliore - and writing. I sit on the boards of six companies: ProfitLogic, PlanetOut Partners, Gurunet, Snapbridge Software, Breathe Media, and Baldwin Technology Corp. I also sit on a few non-profit boards including NPowerNY, Pencil Inc., and Exploring The Arts. With my partner Sarah Holloway, I have a small firm called Hudson Heights Partners that provides strategic consulting, business planning, and executive coaching to non-profits.

(New activity this fall: I'll be teaching a course on Business Leadership at Queens College.)

I pretend I'm writing a novel and read an inordinate amount. I also write a blog.

Laura Rich, the interim Senior Editor for Inc.com, after reading a few pieces of mine on the blog, asked me to write a column. So I spent the better part of a few morning showers trying to come up with what makes me qualified to write a column. I could go on about having been a manager and entrepreneur myself. I could talk about my years of experience as an investor and board member. I could even call up stories from my days as a reporter. But the simple truth is: I like entrepreneurs. I think, as a whole, people who are willing to put their lives on the line to follow some crazy dream should be helped in their quixotic efforts.

And if a few folks can benefit from my powers of observation, than I've done a mitzvah.

(There are still more things you can know about me. Check it out.)

Now that you know where I'm coming from, let me tell you what you need to know about approaching a venture capitalist, based on my own experiences and the things I've seen over the years.

Jerry's Top Nine Ways NOT to Raise Money from a VC:

  • 1. Don't beg; it's embarrassing.
  • 2. Don't jump into a cab with them as they're running away from you.
  • 3. Don't stalk; it's scary.
  • 4. Don't hand a business plan to the VC's kids at Little League practice and expect them to pass it along to their Dad; it's REALLY scary.
  • 5. Don't slip it under the front door of their house late at night, when no one is looking; it's call-the-police-honey scary.
  • 6. Don't make fun of their existing investments ("If you like that piece of crap, you'll love my company.").
  • 7. Don't send a business plan written on a napkin. It's trite, silly, and ineffective.
  • 8. Don't threaten to beat them up and, finally,
  • 9. Don't show up unannounced to their office and pretend you have an appointment (this may seem an attractive method since nearly all VCs are over-booked and are lousy at managing their schedules and it's entirely possible that they forgot about your meeting. If you do it, you'll make an enemy of their assistant. You do NOT want to make an enemy of the VC's administrative assistant.)