Concerning Renowned Venture Capitalist Arthur Rock

Spencer Ante has posted an article from IBD on legendary VC Arthur Rock (with an investment resume that includes Fairchild Semiconductor, Intel, and Apple, legendary is an appropriate adjective). Rock is a protegé of pioneering venture capitalist Georges “I’ll take an Grade A individual with a B idea over a Grade B individual with an A idea” Doriot. With the venture industry going through a few hiccups at the moment, it’s a great opportunity to take some time and soak up a bit of knowledge from those who’ve “been there, done that” on a grande scale.

Along those same lines, if you haven’t already done so, I highly recommend reading Ante’s “Creative Capital: Georges Doriot and the Birth of Venture Capital“. As it said in Ecclesiastes, “there’s nothing new under the sun”, and so it may behoove those of us on the investor side to remember a bit more of the history of the industry and occasionally look for advice and guidance to those who came before us (try finding active VCs whose careers in venture pre-date the Netscape IPO. They exist, but they’re rare).

Here’s the article:

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Additionally, here’s a video of Rock from a talk he gave at the Computer History Museum a couple of years ago:

Quick Plug for Cyril Demaria’s New Blog ‘Private Equity & Finance’

I hope everyone is having one hell of a Bastille Day (La fête nationale française)! I just want to call everyone’s attention to the new blog by a fellow HEC alumnus, Cyril Demaria. Cyril’s an accomplished author and one the best French-language writers out there on the subjects of private equity and venture capital. The blog is titled ‘Private Equity & Finance’.  Be sure to check out!

• Private Equity & Finance Blog

Now go back to enjoying the fireworks.

Planète PME in Paris

For those in Paris, tomorrow at the Palais de Congrès is the Planète PME conference. The event is organized by the CGPME (Confédération Générale des Petites et Moyennes Entreprises) and should attract quite a few entrepreneurs and startups.  Now, I know a lot of people who roll their eyes at the thought of European entrepreneurs, but trust me when I say that unlike Santa Claus or the Tooth Fairy, they do exist! There’s actually some good science and technology going on over here, it’s just that the overall ecosystem for venture and entrepreneurship is embarrasingly undernourished. 

Anyway, it should be worth checking out.  I’ll be there!

Also, quick French lesson for the non-Francophones out there: PME (Petites et Moyennes Entreprises) translates into SME (Small and Medium Enterprises) in English. 

13 Things You’ll Never Hear a VC Say

Apologies for the long absence, but the MBA is officially over (Free at last! Free at last! Thank God Almighty, we are free at last!) and I’m thinking how to best move forward with the blog. I’ve got several ideas and it’s just a matter of finding the right approach. I do know that it will be more personal (so far the target audience has been students, particularly my fellow classmates, with the content focused on timely stories across the entire spectrum of PE).

Anyway, here’s a fantastically jaded (and unfortunately all too accurate in many cases), take on 13 things you’ll never hear a VC say:

For French Cleantechies: CleanTuesday

For all those involved or interested in Cleantech in France, be sure to check out the networking group CleanTuesday. They held their first event back in December and seem to be doing well. I have much respect for anyone who tries to improve the ecosystem of innovation in Europe. Bravo!

Kevin Delbridge of HarbourVest on Venture Capital Fund-of-Funds

Here’s an audio interview from Red Herring with Kevin Delbridge, Senior Managing Partner at HarbourVest on Venture Capital and the problems facing VC Fund-of-Funds.

Upside to interview: Good insight on the changing face of Venture, how problems with endowments is helping FoF’s, the current buyers market, and how big he thinks the industry should be.

Downside to interview: Good luck trying to pay attention to the annoying computer voice! It doesn’t have the same charm as WOPR from WarGames.

What Types of Innovation and Invention Might Attract Funding Dollars in the Downturn?

So it’s a pretty weighted question, but it’s exactly what BusinessWeek asked the much hyped YouNoodle (quick note: the site’s startup predictor, which uses an algorithm to predict how much your startup could be worth in three years, is a bit of a gimmick to draw people in, but the site has some interesting content like it’s YouNoodle Scores, which is a metric set up with Sean Gourley to quantify a startup’s “buzz”, as well as nice community features) to try and find out.  We all know the NVCA numbers that showed VC investment for Q1 of this year at a 12 year low, down 47% in dollar amounts from the previous quarter.  

Survey says: YouNoodle tracked 149 venture capital deals worth $1.55 billion among the 53,000 startups it follows (most of which are serious, some only serious in the entrepreneur’s head). Of this dollar amount, 26% was invested in biotech and medical devices; 16.5% in energy and cleantech; 14.3% in consumer Internet; 11.4% in hardware (including semiconductors, gadgets, and PC-related goods); 11.2% in finance; 6.2% in software; and the remaining 14% spread across four other categories such as mobile phones and education, each with less than 6%. The data also showed that most of the funding was later stage and Series B with 34% and 33% respectively, suggesting that VCs are taking a cautious approach at the moment by investing in more proven concepts.

These sector breakdowns by investment show the continued resiliency of biotech as it continues to hold up a bit better than other areas. The article points out that it’s taken 10 years for increased U.S. government grants to the sciences to start to bear commrecially viable fruit. Expect a dose of the same with world government’s increase in cleantech funding.  

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What to Expect From a Placement Agent

With all the noise coming out of New York concerning it’s pension fund scandal and it’s subsequent repurcussions, it may be useful to review what fund managers should expect from placement agents. From the 2nd edition of the Definitive Guide to Private Equity Fundraising, here’s Kelly DePonte of Probitas Partners on the very subject:

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The Federal Reserve’s Bank Stress Test Results

Here are the much anticipated (and more than likely useless) results from the Fed’s stress test of U.S. banks. Whew, disaster averted!

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Kauffman Index of Entrepreneurial Activity: 1996-2008

The Kauffman Foundation has just released it’s Index of Entrepreneurial Activity for 1996-2008. The document was prepared by Robert W. Fairlie of the University of California, Santa Cruz. It’s a fantastic source of information on entrepreneurship in the U.S. (rather unsurprisngly, a byproduct of the recesion is that the number of entrepreneurs is rising).

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