Reid Hoffman: My Rule of Three for Investing
April 22, 2009
Reid Hoffman, the founder of LinkedIn, describes his first three criteria to evaluate the business idea of a startup:
As a serial investor, I’ve enjoyed backing some good Web 2.0 companies, and it’s helped me develop a shortlist of criteria to cut the wheat from the chaff. After five minutes of a pitch, I know if I’m not going to invest, and after 30 minutes to an hour, I generally know if I will. Many entrepreneurs are product-focused, which leads them to pitch the brilliance of the product. Others are money-minded, so they can over think the business plan. But neither of these approaches answer the first few questions I want to know as an investor:
1. How will you reach a massive audience?
2. What is your unique value proposition?
3. Will your business be capital efficient?
Read the whole story at TechCrunch…
Is This the Time to Chase a Career Dream?
April 20, 2009
So why do so many of us perceive ourselves as being so terribly misaligned with our right work? Upbringing can have something to do with it. A client once confessed: “My father told me I had three career options. I could be a doctor, an engineer or a failure.”
I imagine that when the Grammy-winning singer John Legend broke the news that he wanted to quit his job as a management consultant at the Boston Consulting Group to pursue music full time, some of his relatives were concerned about his career stability.
Obviously, he made the right choice. Many stories don’t turn out that way.
I have received pained e-mail messages from grown offspring of aspiring entrepreneurs who chucked it all to follow one failed venture after another. A musician with a stable day job told me that after pursuing music seriously on the side, he wasn’t so sure that he could take the lifestyle full time.
What separates crazy dreams from viable business ideas? I don’t think that it has anything to do with the idea, or the profession, or the market itself. It has to do with the person.
via Preoccupations – Is This the Time to Chase a Career Dream? – NYTimes.com.
Nothing to Lose (or Risk Tolerance is a Competitive Weapon)
March 30, 2009
I’ve been thinking a lot about the market/economy lately, and what the economic downturn means for startups. And I’ve come to the conclusion that while the economic crisis does present serious challenges to startups, it it might also offer a real opportunity to attack large entrenched players.
via Redeye VC: Nothing to Lose (or Risk Tolerance is a Competitive Weapon).
Advices for getting in contact with venture capitalists
March 26, 2009
If you need to get in contact with a venture capitalist, the ENTREPRENEURS REPORT: Private Company Financing Trends – Winter 2008 lists some important advices:
Perfecting Your Pitch
As a venture capitalist, I’m constantly on the receiving end of pitches from entrepreneurs looking for capital. Over time, I’ve found that these pitches fall into three categories: (1) The Introduction, (2) The First Shot, and (3) The Full Pitch. The same mistakes regularly appear in each category—following are some of the common ones and what you can do about them.
How Do I Get Meetings with Investors?
Getting an introduction is a test of your entrepreneurial skills. If you can’t convince a middleman to make an introduction, how will you convince employees to join your company? How will you convince customers to buy from you? How will you convince investors to put their money in your pocket?
