Finds More Disciplined VCs and Scrappier Startups in 2004
MENLO PARK, CA–June 21, 2004–With a growing economy and new ideas flowing, the high-tech startup market is once again primed. But while Silicon Valley venture capitalists have their wallets open, they have returned to discipline of pre-1998 requiring startups to do more with less, keep capital requirements low, build credibility and obtain the right mix of the seasoned executive staff. This was the consensus at Garage Technology Ventures’ “Art of the Start” conference held recently.
Before a house packed with over 300 high-tech startup entrepreneurs at the Computer History Museum in Mountain View, California on June 15, Garage welcomed attendees from across the U.S. and four countries to “The Art of the Start,” a new conference offering time-tested, battle-hardened business strategies and tactics for anyone involved creating a new company. The day-long event explored creating an ecosystem, positioning and presenting a company, how to raise capital, how to bootstrap and common startup mistakes and pitfalls.
“This is a significant time in the high-tech startup environment, similar to the ‘pre-bubble’ era,” said Garage Managing Director Guy Kawasaki, who is also a seasoned entrepreneur and author of the forthcoming book bearing the same name as the conference, The Art of the Start, which will be released in September. “Our intent with the conference was to provide a snapshot of the next generation of funding ideas and concepts in the marketplace, as well as to create a connection for entrepreneurs with potential new funding opportunities.”
“The environment and opportunity for a company to become the next Apple, Cisco, Dell, Microsoft or Google is across-the-board better than it has been for a while,” said fellow Garage Managing Director Bill Reichert. “The resources and expertise available to a startup are better than they have ever been.”
As VCs continue to receive tens of thousands of startup business plans a year, indeed, “The test for the entrepreneur is finding a way to network through the process,” said Steve Baloff of Advanced Technology Partners, who advised, “Think of it as a sales process.” He and fellow panel representatives from VantagePoint Venture Partners, Sony, Draper Fisher Jurvetson and the Band of Angels counseled entrepreneurs to make sure they qualify a target venture capital firm before pitching, and treat their email pitch (the preferred method of communications with VCs) as a “30-second beauty pageant” opportunity to stand out from the rest – with supreme focus on the technology they’ve developed and why it’s different.
Not all entrepreneurs need or should seek VC funding, however, emphasized Band of Angels’ Ian Sobieski. “Emphasis should be on building a business plan that maximizes your chances of success while realistically assessing both your funding needs and the constraints on fundraising.” To that end, Garage’s Reichert presented a primer on the Art of Bootstrapping.
“An awful lot of successful companies got started bootstrapping,” Reichert added, emphasizing the many other financing models available, including starting in the traditional garage, in a university, with government research grants, or by productizing a service.
A panel of seasoned entrepreneurs, including the founders of BitPass, Mirra, Scalix and PayPal, advised their startup colleagues on lessons learned. There was nearly unanimous agreement that startups should under-promise and over-deliver. They agreed it was important to be realistic in setting goals and expectations, and to set milestones companies can achieve: It’s important for investors and the team.
Kawasaki moderated a panel of veteran Silicon Valley “door openers” – those with the connections, ability and track record for helping shape several successful companies – about creating an ecosystem to support a company. Panel participants noted the most common mistakes entrepreneurs make with respect to working with service providers -such as accountants, attorneys, corporate and investment banks and public relations firms – is waiting too long to bring them onboard.
Garage Technology Ventures’ “Art of the Start” conference was sponsored by Comerica, HellerEhrman Venture Law Group, Krause Taylor Associates and Mohler, Nixon and Williams, in conjunction with the Computer History Museum.
About Garage Technology Ventures
Garage Technology Ventures is an early-stage venture capital firm located in Silicon Valley focusing on emerging technology companies on the West Coast. The firm is currently investing in its third fund, a seed-stage and early-stage fund anchored with an investment from CalPERS. Unlike some venture funds, Garage is happy to support first-time entrepreneurs who are building the next great technology company.
Krause Taylor Associates
All securities and securities-related services are offered by Garage Technology Ventures’ wholly-owned subsidiary Garage Securities, Inc., member NASD/SIPC.
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