January 26, 2005
Trying to come up with the right tenor and tone for columns is something that is easier said than done. It’s especially difficult if you increasingly find the scope of your column -- based on the column’s name -- is rather narrow. While I love the name “VC101” for a column, I simply find that name to be too confining. How many times can you cover the basics of venture capital? How many ways can you say, “you’re too early stage for venture capital,” or “you haven’t got a clue”?
Complicating the matter is the fact I’ve been setting up a new venture with a partner, VC Fodder, and we’ve been hemming and hawing about what to do, and how to do it, what to write about, what to provide to the reader.
Further complicating the matter is the fact many people have been emailing me asking when I’m going to write something again.
The net of all this is: I’ve decided to rename my column to reflect a desire to comment on a wider range of entrepreneurial and venture capital issues.
So now we have the Velocity of Venture, which is a reference to the velocity of money, an economic term that is part of the quantity theory of money. To totally and blatantly rip off Irving Fisher, I give you this equation for venture capital:
M*V = P*Q
where
M is the total amount of money in venture funds at any one time (say, on average during a year).
V is the velocity of venture capital, i.e., how often each unit of money is invested during the year.
P is the average price level, or valuation, of each portfolio company.
Q is the total number of venture investments made during the year.
By doing a little algebra, we are able to come up with the following equation for the velocity of venture capital:
V = P*Q/M
If anyone knows what this means, please let me know!
The point to all of this is my column will reflect what I’ve been doing in VC101 for a while, talking about a wider range of subjects than just the folly of early stage entrepreneurs. So here’s what I want to accomplish with the new column:
- Community & News – I’d like to hear from investors, entrepreneurs, service providers. What deals are you working on, what technologies do you think are interesting, who has a new gig, etc., etc. Let’s stay away from gossip, there are other online services for that.
- Commentary – I’ll chime in with my thoughts on matters of various entrepreneurial subjects.
- Links to Interesting/Funny Sites – I’ll point ‘em out, you visit them.
- Technology You Should Know About (Or Technology That Someone Needs to Explain to Bill)
Hmmm…that’s about it. So without further ado, let it rip!
News and Deals
The New York Times on 1/24/05 had an interesting piece on the “social networking” thing. Naturally, the tenor the article was rather pessimistic (this is the NY Times, after all). The article mentioned the big time VC backed Friendster.com has been surpassed by funky upstart MySpace. Friendster boosts more registered users, but apparently MySpace has users that use the service for far longer periods of time. Also, MySpace has grabbed a hold of the coveted 18 to 29 year old demographic.
MySpace began as a service for people to share videos and music clips, and if you’ve spent any time surfing through their site, you’re apt to come across some pages where after a few seconds of load time, music begins to blare through your speakers. Nice. I hate that.
But the kids love it, and that seems to be the secret of success for the deals. Find the audience that has nothing but time on their hands. Kind of like the MTV for the computer generation, which, I believe is MySpace’s business model.
I’m not going to question whether these services can make money because the fact is this: some will make money, others will not.
Since I am the coolest person at VC Fodder, I naturally have profiles at Friendster, MySpace, LinkedIn, Ryze, and some other on-line things. Right after I finished reading the article about Friendster and MySpace, someone contacted me (via MySpace), and it turned out to be a manager at pretty cool restaurant where I may host some networking events.
Who says this stuff does work or doesn’t generate economic activity?!
Venture capital comings and goings
I just got word that Ken Aurichio is the new CEO and President at Siemen’s Venture Capital. I know this, because Ken sent me an email announcing this fact.
From: ken.aurichio@siemens.com [mailto:ken.aurichio@siemens.com]
Sent: Wednesday, January 19, 2005 12:00 PM
To: bill@billsnow.com
Subject: Ralf Schnell named new President and CEO of Siemens Venture Capital
Dear Bill:
I thought you and your ePrairie.com readers would be interested in the attached announcement from Siemens Venture Capital.
Regards,
Ken Aurichio
Siemens Corporation
(212) 258-4589
Cool Companies
Catriona Harris at PR-Vantage was kind enough to send me the press release for VKB. VKB is a company that produces an infrared keyboard projecting thing. Manufacturers can put this technology on a cell phone, and as long as the user has a flat surface, the user can use a virtual keyboard to make entries.
The technology can also be used on laptops, and for any computer, actually. It’s kind of Star Trekian, actually, and when I first looked at their website, I thought it was one of those jokey type deals, kind of like http://www.huhcorp.com/ is for Marketing companies.
Anyway, it looks like a cool technology, and a cool company, and I thought you all might like to know about it.
Hi Bill,
VKB announced its Series C today with $4.4 Million in new funding.
Please let me know if you are interested in speaking to somebody from VKB, I would be happy to set up a time.
Best,
Catriona
415-984-1970 x118
FOR IMMEDIATE RELEASE
VKB Secures $4.4 Million in New Funding Led By Toibb Enterprises
Menlo Park, Calif. - January 17, 2005 - VKB, Inc., an intelligent optical interface and projection technology company, today announced that it has raised $4.4 million in its Series C funding led by Toibb Enterprises. This new round brings the total amount raised to over $11 million. VKB will use the new funding to further product development and expand its engineering and sales teams.
VKB was founded in 2000 with the mission of creating a standard for high-performance, low-cost virtual interface solutions across a wide range of products in the communications, computing and entertainment markets. It has developed proprietary optical technology, received its first major patent and has several further patents-pending. The initial products provide superior data input solutions that significantly enhance the usefulness of many wireless communications and computing devices.
Toibb Enterprises also funded VKB in previous rounds; additionally, its founder and chairman, Harris Toibb is the chairman of the board for VKB. "VKB now has a strong and experienced executive team, a mature technology and is in a tremendous position to further its growth with more customers and partnerships," said Toibb. " I am convinced VKB is now prepared to implement its break-out strategy and achieve the financial goals it deserves."
"This round of financing is a strong validation of our vision and technology," stated Jonathan Curtiss, president of VKB. "We are very pleased that Toibb Enterprises continues to believe in our business and look forward to our next phase in 2005 as we move from burning to earning."
About VKB
Founded in 2000, VKB, Inc. is an intelligent optical interface and projection technology company. VKB's unique, patented and patent-pending optical technology uses simple, low-cost components. The first application of the technology, a virtual keyboard, was launched as a product in late 2004. The company is headquartered in Menlo Park, California, with research and development facilities in Israel. More information is available at www.vkb-tech.com.
Press Contact:
Catriona Harris
Account Manager
PR@vantage (www.pr-vantage.com)
(415) 984-1970 x118
charris@pr-vantage.com
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Never Mind The Naughty Words
The Wall Street Journal recently (1/21/04) ran an article on a website that has a name I cannot reprint in this family oriented website. Let’s just say the site is called, uh, er, f***edcompany.com.
F***edcompany.com is a bit of an Internet legend, as it allowed loud mouths to chime in and pontificate about what venture funded dotcom they thought was going to crash and burn next. Pud, as the founder of the site was known, recently started a new company called AdBrite, which sells Internet advertising.
Ironically, and despite the fact that F***edcompany.com made fun of numerous Sequoia investments (Webvan, eToys.com, to name a few), Sequoia made a $4 million investment in Pud’s new venture. Pud, by the way, seems to prefer the nom de normalcy of Philip Kaplan these days.
Also, at one point, Pud had 1200 people paying $75 a month for premium service at F***edCompany! Not bad for someone running the thing out of his apartment.
What I found interesting, and heartening, was the fact that the VCs were not bothered by Pud’s irreverent past. In fact, they seem to embrace it, or at least they’re claiming to embrace his past.
Funny Sites Someone Recently Pointed Out To Me
Also on the humor front, and as referenced above, take a moment out of your busy day and look at http://www.huhcorp.com/.
If you got the guts, pal, send the author of this stuff an email: bill@vcfodder.com
Or return to the main page for Bill's columns
Or simply flee!
