Month: November 2011

Nov 26 2011

What Are VC Firm’s Efforts To Connect Firms In Their Portfolio With Fresh MBA Grads?

Question: How would you describe VC firm’s efforts to connect firms in their portfolio with fresh MBA grads? Typical? Rare? Never? Im just curious because here in Philadelphia, First Round Capital is posting a lot of job offers for firms in its portfolio on their website, and I’m not seeing any other Philly VC firms doing this (at the moment). Im an MBA applicant at this point, and Im trying to size up my (realistic) career goals via an MBA in Entrepreneurial Management or some similar track.

This varies dramatically by firm and by school. Some venture firms do a good job of having dynamically updated job boards on their websites that list all open jobs by portfolio company. Some examples are us (Foundry Group), Union Square Ventures, First Round Capital (as you indicated), and Spark Capital. These job listings tend to be by company, role, and location – not by educational background.

Some firms actively engage with the nearby MBA programs through their entrepreneurship programs. This is especially true of places like MIT and Stanford, but equally likely at schools like University of Colorado and University of Michigan. While a lot of this is locally driven, some of this is alumni oriented (for example, see the trip that my partner Jason Mendelson and I made recently to University of Michigan, where’s he’s an alum.)

While I think MBA Entrepreneurship programs are fine, the bigger opportunity is to spend two years at business school actively engaging in the entrepreneurial community around the school you are going to. One of the big mistakes a lot of MBA students make is that they hang out at their business school waiting for all the entrepreneurial opportunities to come to them. The industrious (and entrepreneurial) students go out into the community and find the interesting stuff that’s actually going on.

I’d encourage you to ask the question directly to the school you are applying to. They should be in recruiting mode (for you as a student) and should be clear and effective about talking about entrepreneurial opportunities for you if you go through their program.

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Nov 4 2011

Levine: Trends in M&A Deal Terms

Today’s post of the day is from my partner Seth Levine (Foundry Group) and is titled Trends in M&A Deal Terms. Seth has been involved in several significant acquisitions recently, including Google’s acquisition of AdMeld and Federated Media’s acquisition of Lijit, so he’s been deep in the contemporary negotiating dynamics. He also includes a great link to an M&A deal terms report from Shareholder Representative Services.

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Nov 4 2011

Are VCs Interested in Funding a Services Agency?

Question: I have a startup concept for a services agency (not a software or online business). I have previously helped launch PR agencies, one of which was subsequently acquired by a national agency. Are there angels/VCs that would be interested in my services concept?

Typically not. While there are some VCs that like services businesses, especially consolidations or rollups of services companies, most VCs aren’t interested in funding services business, especially around PR or marketing.

While there was a rash of VC financings for web agencies in the late 1990’s, when the Internet bubble burst VCs were reminded that these are companies that – at best – end up being valued at 1x revenue based on the underlying economic characteristics of the businesses. This tends not to create risk / return investment dynamics that are interesting for most VCs.

Of course, what VCs fund cycles in and out of favor, so there might be a point in the future where there is a particular type of “next generation services agency” that appeals to so VCs. But for now, most of these companies will have to rely on bootstrapping or angel financings.

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Nov 1 2011

Suster: Why You Should Ban Laptops & iPads at Board Meetings

Mark Suster (GRP) reminds all of us to check our laptops, iPhones, Blackberries, and other electronic devices at the door at board meetings. CEOs should enforce this, as should the other VCs and board members in the room.

No “full partial attention” – just full attention.

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