Fred Wilson, one of the leading blogger VCs and a man way too generous and gracious with his time and advice, is asking what features make up the DNA of the anti-VC, presuming one exists.
It’s a funny timing, because yesterday I emailed Craig Newmark and told him he should become an anti-VC.
I read that Craig and his partner Jim Buckmaster, CEO of Craigslist, didn’t know what to do with all of the money they are making at his classifieds community, according to something I saw on PaidContent.
“We don’t know what to do with the money,” stated Newmark. I emailed him and said:
Why don’t you put a portion to charities and causes, another portion to some kind of retirement trust etc., but why not also invest it in companies that would otherwise not get funding from traditional sources (mainly VCs). Think of how many people had ideas for a Craigslist but could not launch it due to lack of funding because VCs did not want to invest in those ideas, become the real anti-VC.
I’d add microfinance, but there are so many people doing that that the last thing you want to do is have too much supply of easy money, that will attract fraud.
What did I mean? What is the anti-VC?
Well, for one, the correct term would be un-VC, but anti-VC has a better ring to it. But the anti-VC is willing to invest:
- in things that are not in vogue and targeted by venture capitalists, aka. does not suffer from herd mentality
- in a project that is out of his geographical range
- in a person that he has never worked with before
- in someone that lacks the experience expected to be required to succeed at the venture in question
- at terms that a VC would demand (ie. no liquidity preferences, flexible debt repayment terms, etc)
- that adds something more than administrative (legal, accounting, etc.) assistance
- in a project that has merit but will probably not get funding from a VC for a myriad of reasons
- in something that might create a heap of social value but not necessarily direct, tangible and measurable monetary value immediately
And is not:
- going to push the founder/manager out when the you-know-what hits the fan
- in a rush to get an exit
- about to block a potential exit if the terms and return do not suit the VC’s portfolio return targets
- going to push his related portfolio companies onto the new investment
- going to waste an entrepreneur’s time when he has no interest to invest, but is looking for market intelligence.
That’s just for starters, I have been working on a post called “Funding Myths” that will touch base on a lot of these themes and features, here it is.
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May 9th, 2007 at 1:41 pm
nice post. looking forward to the ‘funding myths’ post.
i came here via your a vc comment.
grabbing the feed…