COHORT GROUP 9: KIM CHRISTAL, TERRY CIPHER, YUN LIN, MATT ROLLINS, AND QINGDONG "JOE" ZHOU
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There is a lot of discussion in the business world today about venture capital. It is the primary financial supporter of new business ideas, funding new startup companies with millions and hundreds of millions of dollars. We're all familiar with the large amounts of venture money that some Internet startup companies have earned in recent history, but it is not a simple process in procuring that money. Several months of due diligence and study go into a VC investment, and quite often before they give you money, they send you off to an incubator/accelerator business to help refine your business ideas and team first. There are several resources on the internet to learn about venture capital. The best resource is probably the web pages from the VC firms themselves. Another good source on the whole startup experience is the various websites from incubator/accelerator business development companies. And lastly, the general business news sites also provide good information. |
Venture Capital FirmsThere are hundreds of VC firms in the United States alone. Each commands a portfolio of money investments from banks and individual investors looking to expand their wealth. Their goal is to make money by investing their portfolio into attractive startup companies for equity in the company. Once the startup is purchased by a public company, or has an IPO, the VC firm can sell its equity in that company (or the inherited shares from the purchasing public company), or keep the equity and earn dividends. Here are just a few of the many (MANY) VC firms out there, and a little bit about them: Located in Austin TX, Austin Ventures is one of the largest and most active VC firms in Texas. They are located in Austin to take advantage of the current technology boom in that area, much of which has been spurred by the success of computer giant Dell. AV's website contains lots of links and information on their activities in the venture capital world. Sevin Rosen, which has locations in Dallas and Palo Alto, California, commands over $1 Billion in investment capital, and has made recent investments in such companies as iChoose.com and Alien Technology, and was in the investments that started Compaq, Lotus, and SGI. Their site contains tons of info on their vast portfolio of companies, as well as news on today's VC community. Also in Dallas and Silicon Valley, InterWest is another leading VC firm. InterWest tends to make first round investments of $5 million on average, and has funded many companies including Cyrix and HealthCentral.com. "Cap SW" as it's known in the industry, is another Dallas VC firm with strong investments. Star Ventures is an international VC firm with headquarters in Munich, Germany and an office in Herzelia, Israel. Star makes investments all over the world, and has several investments in North American companies. SSM is located in Austin and Memphis, TN - two of the 'hot beds' of technological growth in the US right now. SSM's site has very good info on VC process and news. Another Texas VC firm. Investments include Applied Science Fiction and Chiaro. A Minneapolis, MN-based VC firm (with a neat Flash intro to their website). Lots of useful info. |
Business Development Firms: Accelerators/IncubatorsMore often than not, you won't be ready for VC investment out of the gate. You're going to need help, and that's what these for-profit companies are all about. In exchange for a small amount of equity, they offer business development services which can include office space, business connections to industry leaders, seed funding, and professional advice. There are fewer incubators out there than VC firms, but more are popping up every day. Many VC firms have their own incubators for companies that "they don't want to get away." Here are just a few of the business development firms out there, and a little bit about them: STARTech is Texas' premiere business accelerator, focusing on new startup companies in the North Texas area and Austin. Though only 2 years old, STARTech's reputation is already large on a national level and continues to churn out strong high tech startup companies. STARTech's website is excellent for learning about the startup process and how venture capital is related to it. Don't be confused by STARTech's .org domain name - they're in the business to make money by helping entrepreneurs with great ideas start successful companies. STARTech runs the multi-annual entrepreneur events called STARTCamp, which are meetings dedicated to fostering knowledge and networking for the North Texas Business community. The next STARTCamp is coming in June - check out the website for more details if you're interested! AV Labs is the child incubator of Austin Ventures (the VC firm). They focus on companies the VC firm is interested in investing in, and often help incubate companies that Austin Ventures has already funded. The west coast's most successful startup incubator is garage.com. They help develop companies all accross the US, though focusing on more nubile ventures only in the Silicon Valley area. Garage.com sponsors an entrepreneur "boot camp" to help further educate entrepreneurs about the startup and venture process. Located in Pasadena as well as Sunnyvale, California, idealab! is clearly focused on the Internet. They specialize in taking an idea and creating a viable by providing advice on strategy, branding and structure. idealab!'s companies include GoTo.com, eToys, and NetZero (free internet access!!). Their strength is the process of defining clear and focused missions for their young startups. Seedstage.com grooms and advises client startups during the venture funding process to accelerate time to money and speed of execution thereafter. They function as extended members of the executive team to assist in: defining the market, refining the business model and strategy, recruiting the team, preparing the investor, introducing to investors, advising through investor negotiations. This means they do not have a seed fund that they control. They prefer working with Texas-based startup companies. They specialize in creating synergy within their portfolio of companies as well as providing basic business services in order to free their member companies to focus on their core missions. They tend to focus on business-to-business Internet startups. |
Other Sources of Information on Venture CapitalAbove and beyond the VC firms and incubators/accelerators out there that deal with venture capital on a daily basis, there are plenty of internet sites that deal with the business news that the VC world generates on virtually an hourly basis. Here are just a few:
VCapital.com - LOTS of information about VCs and funds Red Herring - The standard for up-to-date business news
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If you have any questions, email Matt Rollins...