Welcome to Day One of "Venture Capital Post", your resource for all things Venture Capital with a bit of commentary from the likes of me. A decade ago, the idea of raising venture capital funds outside of the Silicon Valley or Boston´s Route 128 was foreign to even the most business-minded folk. But the invention of the graphical user interface, combined with a plethora of pension fund money waiting to be invested through venture capital firms, combined with the decline of R&D funds at Fortune 1000 companies, left the market ripe for what turned out to be our era´s own gold rush. Just like past gold rushes, a few struck it rich, more ended up empty handed and the middle men did quite all right.
While paper fortunes were made and lost in a day, the rush gave the country–indeed the world–a brisk tutorial in how companies are launched, the potholes which lead to failure and the elements which make up success. What university doesn´t have a program in entrepreneurial studies now? What cocktail party full of professional ends without someone bringing up the phrase: "venture capital"? Who doesn´t have a friend, a cousin and classmate who has penned a business plan in search of financing?
As a journalist I first started covering venture capital with the 1996 launch of my magazine (then newsletter) "AlleyCat News." In it, my partner and I set up to create a publication which would be the intersection between New York City metro area technology companies seeking funding and area venture capitalist willing to invest.
This may seem passé now, but at the time there were only three venture firms focusing on investing in the New York market-the recently launch Scripps Ventures, which was part of the Scripps publishing empire; Prospect Street´s Discovery Fund, which was partially funded by the city of New York; and the newly launched Flatiron Partners, which came onto the scene-cameras flashing–like Paris Hilton walking into a trendy hot spot, but after the bust was quietly absorbed into one of its major investors, J.P. Morgan Chase.
The good news for the market is that we can put all that behind us now-all the parties, all the hype, hopefully all the misguided investing among fraternity brothers and the like and move steadily forward, one step at a time, to build next generation companies, the stuff innovators´ dreams are made of.
Even with our recent historical record, there many misconceptions about how venture capital works, who should seek it, when to seek it and how to go about it. With this blog, I promise to help decipher the tenuous and constantly changing world of raising capital, introduce you to new opportunities for funding and the people who sign the checks. Hopefully, in aggregate, it will become an invaluable tool in your own efforts to build a world-class, profitable business.
To be continued"?¦