Thursday, October 28, 2010

VCs Have To Raise Money Too

Intellectually they know, but at an emotional level a ton of tech entrepreneurs end up feeling VCs were just born with the cash to dispense with, if they will just open up the wallet and dole out the money, don't they realize the world needs to be changed?
Fortune: Kleiner Perkins goes big: VC firm raising more than $1 billion: the $250 million sFund doesn't actually exist yet. KP already has pitched to limited partners in Silicon Valley, and soon will do the same in New York City. It isn't expecting any difficulties, despite the overall fundraising doldrums for VC firms.... not suggesting that KP ever left tech, but simply that earmarking over 80% of new fundraising efforts toward the sector makes greentech and life sciences look a bit less important
It is a pain getting the money. It is a pain getting the right terms. It is a major pain to do all that and not end up belly up like they said they feared in the first place.
Kleiner Perkins Caufield & ByersImage via Wikipedia
Big name VCs and VC firms you read about, and you hear of them. But there are countless funds you don't hear about. Most of them - word is - don't make money. They are just like the startups they seek to fund and make money off of. They try. Mostly they don't succeed.

Those who succeed owe a major debt to that vast majority that don't. Those who succeed end up with fame and fortune. But those who failed paid for the culture of risk taking that made that fame and fortune possible. The unsung heroes of the venture capital world have much in common with the unsung heroes of the tech entrepreneurship world. They succeed in keeping alive the culture of risk taking with every failing act. Every ship that goes down keeps the flag flying high.

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