Tag Archives: venture capital

The Top Private Cloud Companies

I recently came across this cool chart put together by the team at VC firm Bessemer Venture Partners. They plot what they consider the top private cloud companies grouped by functional area (marketing, sales, finance, HR, etc.).

The team at BVP also has an interesting Cloud Computing Index they keep up to date which tracks over 40 publicly traded cloud companies.

Check out the chart and the index at http://www.bvp.com/cloud or, click on the image below.

BVP Cloudscape

BVP Cloudscape

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You Are Right. VCs Don’t Know Shit.

On his blog, Lee Hower (one of LinkedIn founders) has an interesting post titled Making good decisions still means you are sometimes wrongin which he talks about the tough choices VCs have when deciding which startup to back. There are so many deals coming their way, they can’t possibly bet on every single one of them and identifying good opportunities, especially early stage, is really difficult.

I especially liked his link to Bessemer’s “anti-portfolio” web page where they show companies they declined to invest in and have great comments on why. Just goes to show that you shouldn’t feel bad after that meeting where the VC tells you the startup you have been working on and investing your life savings is not interesting to them. Maybe they are missing on the next eBay, Google, or PayPal. Just maybe. 😉

Cool Startups at Pitch San Francisco

Pitch San Francisco ’11 is now over. An interesting gathering of over 90 startups presenting their products and services to VCs and the public, ended with the following winners:

Congratulations!

More Cool Startups

But other startups are worth mentioning. For example:

  • DealAngel: Could potentially do for hotels what HipMunk did for air travel, DealAngel has a proprietary algorithm that statistically compares hotel deals in an area to tell you which ones are actually good deals in a beautiful display that makes it easy to spot hotels and the best deals. According to Co-Founder and COO Bob Rogers, Expedia, Orbitz and the usual travel sites are not completely transparent when it comes to presenting you with the best price and they are aiming at disrupting this market. If they can crack the code and present users with a better way of saving on travel, that’s a huge market potential.
  • Let’s Listen: Yet another music site? Not quite. Let’s Listen is unique because it allows you to listen to music with your friends, online. It basically allows you and your friends to share your music library, then select a song to play and everyone will listen to the song at the same time while chatting. Simple, yet powerful. At first I was skeptic, but after watching my 15-year-old niece chat with her friends on Skype for hours while listening to music, I’m sold. Worth checking out.
  • CheckInOnMe: Want simple tech that works? I was impressed with this service. Imagine you are a girl leaving that late night study session at the college library, preparing for tomorrow’s exam. Now you have to walk all the way through the parking lot to your car or bus station. You activate CheckInOn.Me and every few minutes you get a text checking in on you. If you reply to the text, everything is fine. If you fail to reply or you reply without using the correct pass phrase, the service will alert your friends and family (you decide who) that something is not right. Is simple SMS tech used in a clever way. The possibilities are many (families checking on their kids, realtors going to other people’s homes, even babysitters).

If you missed this year’s event, make sure to sign up for the next one!

Market Size: Either You Believe or You Don’t

The question that seems to be a deal killer, no matter what type of product you are building, is the market sizing one. It comes in various formats:

  • “What is the size of the market?”
  • “How big can this get?”
  • “What are the growth prospects?”

Among others, is a key question that often turns off potential investors. Especially if you can’t answer it “correctly”.  A nice post by Bryce Roberts titled “You can never size a market in Excel“tackles this pesky problem entrepreneurs face and gives sound advice:

“An investor’s instinct around something as fundamental as whether your business can reach the scale needed for venture capital returns is one that won’t be found scouring the latest market forecasts from Forester or Goldman Sachs. It won’t be found in endless meetings and it won’t be found in detailed financial forecasts or market sizing exercises.

It will be found in the connection an investor makes to you, your product and your vision. Either they will believe it or they won’t.”

It is a refreshing view on the question of market sizing. And also tells you a bit about how to assess whether the investor in question will be really a good match with your startup.

Check out the full article here.

Choosing Your Angel Investors

Max Shapiro from People Connect Staffing turned me on to this great video of a recent gathering of Angels and VCs titled “How to Select Your Angels“, from a Total Access session sponsored by Orrick.

The panelists were Jeff Clavier, Jared Hansen, Rob Hayes, Mitchell Kapor, and Naval Ravikant and moderated by Larry Kane.

Here are some key points from the talk:

  • The bar for startups is set higher, you need more than an idea to get funding, need to show traction.
  • Investors want to see something that actually works, if you have revenue is better.
  • What’s your team structure? Investors want to know who’s going to actually do all the work. Make sure you have more “doers” thank “executives” in your team.
  • The product that gets funding is almost never the product that ends up winning, so investors are looking for a team that can move in a big enough market, take whatever they started out with, and make it work, become massive.
  • You’ve gotta know how customer acquisition, retention, and referral will work for your company. If you don’t, is likely investors may pass (higher risk).
  • Naval says “focus on the product, the team, when the time is right the money will show up” and what he means is that the funding process takes time and energy, don’t let that distract you.
  • On incubators, they suggest you pick one as if you were choosing the best college. Each incubator has its own culture, find one that fits you.
  • A key aspect of getting funded is showing you know where you are, how far you’ve come, and that you know the meaningful milestones you have to reach for your next round of financing.
Click below to watch the video.

How to Select Angel Investors