I’ve been around startups since the late 1970s; long before dot com and software took over the spotlight.
And what I learned about VCs back then was different from VCs now.
Back them, most VCs were guys who had started or helped start companies, with strong operational, not just technical, and strategic background.
Sad to say, most VCs with under 25 years experience often don’t know what they’re doing, because they have never created/built a company, while the rest are just bankers masquerading as VCs following “sure bets.”
Granted, VCs have always had much in common with lemmings, preferring to fund “me, too,” companies, as opposed to earth-shattering, high risk products/services that actually moved society in new directions.
From my perch back then on the edge of the VC ecosystem I watched as the “names on the door” retired and were replaced by Wall Street wunderkinds, whose only skill was manipulating money.
What didn’t change was their lemming-like, follow-the-leader investment strategy.
Things haven’t improved much.
While more partners and “names on the door” have operational experience, the investment ecosystem is more closed-door incestuous than ever before.
So unless you are one of the mostly white, mostly male, right school, strongly connected, entitled few, start your company with a bootstrap mentality from the beginning — not as a fallback contingency.
Waiting for funding is like asking for permission.
“That correlates more with any other success factor that I’ve seen in the world’s greatest entrepreneurs. If you look at [Amazon founder Jeff] Bezos, or [Netscape founder Marc] Andreessen, [Yahoo co-founder] David Filo, the founders of Google, they all seem to be white, male, nerds who’ve dropped out of Harvard or Stanford and they absolutely have no social life.”
If you dissect it, is an ignorant, short-sighted statement, especially from such a prominent star in the tech firmament.
Let’s take the words separately in their reverse order to see why.
In the tech world, nerds are typically consumed by the bleeding edge of technology, socially challenged and will doggedly pursue their ideas come Hell or high water. Of course there are more male nerds. Starting in elementary school, girls are discouraged from STEM, whether it’s Barbie saying, “Math is tough!” to the unconscious bias that permeates our classrooms and companies.
As to white, nerds actually come in many shapes, sizes, genders, colors, faiths and from across the socio-economic spectrum. but anyone who follows the current state of tech culture shouldn’t be surprised.
The real reason that that white, male nerds are successful is that they get funded.
They get funded because they are connected — by family, friends, school friends, ex colleagues, etc. — which means they get into the right accelerators (just as Harvard and Stanford are the right schools) or are personally introduced to investors.
The end result is that if you take a superficial look at the stats Doerr’s comment seems to be true—but it is not.
When possible I prevail on someone I know to attend the major AlwaysOn conferences, usually it’s KG Charles-Harris, but more recently it’s been Chris Blackman.
Last week Chris attended this year’s AlwaysOn Venture Capital Summit at Sand Hill Road in the heart of VCland and got a glimpse into the future investment strategies of that storied world.
From Chris Blackman
What can put venture capitalists in a frenzied state? More money—raising it or losing it.
Was the mood somber, reflecting the fact that a huge chunk of available capital was erased when university endowments closed their piggybanks? No; the mood was frenzied at the thought of being able to raise capital once again.
Going forward, who do VCs anticipate will open the spigot for them? Sovereign wealth funds.
The other depressant in the room should have been found in talk of this year’s IPO market falling without a parachute.
Instead, a second source of glee is their belief that next year will be the year of recovery for the IPO market? Why? Because it can’t get any worse than this year.
This was tempered by the keynote speaker, Bill Gurley of Benchmark Capital, who reminded the audience that, “VCs are inherently an optimistic bunch.”
Anticipation and optimism are all well and good, but does anyone believe that Dubai is unique amongst the rentier states—bankrupt?
There is a real possibility that sovereign wealth funds will need to deploy them to buoy their own economies, which will kill the buzz in short order.
If not, what if the SWFs prefer to sink their teeth into physical assets as opposed to swallowing more IOUs?
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
When possible I prevail on someone I know to attend the major AlwaysOn conferences, usually it’s KG Charles-Harris, but more recently it’s been 
