How Far Will a VC Go?

How far will a VC go to spend time with a great entrepreneur? In a time where entrepreneurs and ideas are abound, where Sequoia is again funding Stanford's next great student team and  where the number of online photo sharing/storing/editing sites grows by what seems like a company a day, it may seem counter intuitive that a vc would endure sweat and pain to hear an entrepreneur’s pitch.

Yet, last Thursday, I had a classic “sacrifice the body” moment for an entrepreneur’s vision. I found myself chasing Fabrice Grinda around central park on a beautiful Thursday. And let me tell you, Fabrice is worth chasing.

I love seeing entrepreneurial spirit manifested in creative meeting venues. And as an occasionally misplaced California vc, a spring day in New York is a beautiful, ephemeral thing.

Still I was in a bit of pain trying to keep up. Little did Fabrice know, I had just learned how to dead lift the day before, had already put a good 2 miles on my high heeled feet and had an increasingly heavy/light Dell on my shoulder. So yes, I was feeling the hurt trying to keep up with Fabrice. But I was happy to do it with glee to hear about his various exciting ventures- OLX (Craig’s List/Ebay killer providing local service on a global level), Allmydata (virtual online back-up solution), DineroMail (Latin American person-to-person payment solution) and Phanfare (photo /video sharing site).

Fabrice aside-- the man has started 5 companies to success; most recently, Fabrice forsaw the mobile content boom and founded Zingy, which he sold for $80M in 2005 to For-Side-- why do vcs run to keep up with today’s entrepreneur?

There are two main reasons this occurs in greater and greater frequency today: (1) competition is fierce for the “best-and-brightest-and-most-experienced-but-not-too-wealthy-lest-the-hunger-dissapate” entrepreneurs and (2) entrepreneurs are studs/studettes and we are lucky to stand close. It is precisely because now is such an easy time (relatively speaking) to start a company, that vcs must keep up with those who know how to do it best. And I hope I will always act such a way, bubble or no, never developing vc importitus.

It is currently a great time to start-up and a tough time to fund start-ups during the great web 2.0 boom. To pundits, current online trends represent the natural course of action as the web matures as a medium— the promise of empowering the average user, sharing richer and richer media, delivering bits and bites of broadcast quality video faster than ever before, launching ajax-based, web 2.0 mashups x 10 in every possible category, and discovering recreational talent deserving of a professional audience.

To critics (and as vcs we are trained to be pessimists), we see the danger signs. These signs are namely too many companies going after still emerging markets and many operators with little experience during the down-turn.

What will come of this? Fortunately, markets are efficient. Assuming we all maintain some funding disapline, consumer internet plays that do not play should fade out quickly. We may tolerate certain Fred Wilson-popularized “freemium” companies taking time to find their model.  But I can only hope we only celebrate the few companies first to market with large audiences like YouTube or with well excuted features like Flickr and shy away from the many freemium me toos that follow.

In today’s world, it is a great to be an entrepreneur. As a vc, I will try to keep a pace in central park with the best and hope to be useful if I can catch my breath!

Comments

[Charlie]

Running? ha!

Try dodgeball.

Any VC can run next to an entreprenuer... How about standing there while one runs at you about to fire a dodgeball at you?

http://www.thisisgoingtobebig.com/2006/04/dodge_dip_duck_.html
http://avc.blogs.com/a_vc/2006/04/dodgeball.html

:)