Someone was telling me the other day about a slightly scary meeting they had with a venture capital firm recently. It had the perverse effect of making me feel extremely sympathetic to the plight of the internet VC.
Having left a pretty high-profile job, this person was on the lookout for interesting openings. As everyone seems to be joining a dotcom, he felt he should investigate the possibility. So he asked the VC if they knew of any start-ups that needed people with management experience and internet knowledge.
"Ah yes," said the VC, "here's a list of dotcoms - is there anything you fancy?" and proceeded to produce a huge list of company names.
"After the meeting," this person said to me, "I went straight home and called the investment bank I have money with, because if they're going about their dotcom investment in the same way as that, I don't want to invest my money with them any more."
The majority of VCs are highly discerning about where they invest, but I've heard a couple of similarly alarming anecdotes, and they underline the impossible job internet VCs have trying to pick winners in such a crowded market. They're under pressure to find internet start-ups to invest their funds in very quickly so they don't miss out on the dotcom gravy train.
Many aren't used to the low levels of investment that some of these companies need. That's why so many incubators have come into being. But it also leads to businesses being funded that wouldn't get a penny in any other sector.
And there are such a lot of business plans to choose from. First Tuesday and the other industry events do a good job of weeding out the bad ideas, particularly as some of the events come to resemble a school disco, complete with wallflowers shuffling coyly around the fringes,occasionally handing over business plans. But it must be hellish trying to pick the winners from the oceans of dross that fall across the average VC's desk.
NB No mention of my mum in this column - New Year's resolution.
Oh damn.
Pity the poor VC, wading through wannabe dotcoms.
Someone was telling me the other day about a slightly scary meeting they had with a venture capital firm recently. It had the perverse effect of making me feel extremely sympathetic to the plight of the internet VC.
Having left a pretty high-profile job, this person was on the lookout for interesting openings. As everyone seems to be joining a dotcom, he felt he should investigate the possibility. So he asked the VC if they knew of any start-ups that needed people with management experience and internet knowledge.
"Ah yes," said the VC, "here's a list of dotcoms - is there anything you fancy?" and proceeded to produce a huge list of company names.
"After the meeting," this person said to me, "I went straight home and called the investment bank I have money with, because if they're going about their dotcom investment in the same way as that, I don't want to invest my money with them any more."
The majority of VCs are highly discerning about where they invest, but I've heard a couple of similarly alarming anecdotes, and they underline the impossible job internet VCs have trying to pick winners in such a crowded market. They're under pressure to find internet start-ups to invest their funds in very quickly so they don't miss out on the dotcom gravy train.
Many aren't used to the low levels of investment that some of these companies need. That's why so many incubators have come into being. But it also leads to businesses being funded that wouldn't get a penny in any other sector.
And there are such a lot of business plans to choose from. First Tuesday and the other industry events do a good job of weeding out the bad ideas, particularly as some of the events come to resemble a school disco, complete with wallflowers shuffling coyly around the fringes,occasionally handing over business plans. But it must be hellish trying to pick the winners from the oceans of dross that fall across the average VC's desk.
NB No mention of my mum in this column - New Year's resolution.
Oh damn.
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