what's a VC?

Filed in archive Venture Capital on July 28, 2004

Source: www.dittmar.fi

Rajesh has this fine link:

"Venture capitalists are chickens. Compared to entrepreneurs they're spectators in the great game of small business hardball. They would no sooner personally guarantee a corporate bank loan than they would jump off the cliffs of Acapulco. Contrary to popular opinion, however, they are not totally worthless - they work long hours, sift through more garbage than a trash collector, and have to get used to disappointing 99 entrepreneurs for every one they please. They are veteran roller coaster riders, but never get used to those big drops. They are, above all else, risk reducers - they prospect in the land of the commercially unfinanceable, and try to differentiate the superstars from the merely enthusiastic. Most of them are pretty good at it, a result of lessons learned, mistakes made, and successes observed."

"They have a true understanding of the importance of cash flow. Ask any gathering of entrepreneurs whether they understand that cash is life and there will be nods all around. Then ask them whether they also understand that lack of cash is DEATH and the blood drains out of their faces. A fellow venture capitalist I know describes a start-up venture as "a race against insolvency," and he is right. The best entrepreneurs equate cash with blood, and part with it only when it stands to directly further their objectives."