wow. . . arrogant words . . . those who do not chose you are by definition losers? what is this? highschool? what are you? a 14 yeard old cheerleader?

I’m am at a lost for words

Not only is the failure rate of start-ups irrelevant to this ethics issue; my understanding is that his assertion about “9 out of 10 of all VC investments fail” is also wrong. For example, Susan Kelley reports in Cornell’s Alumni Magazine (http://cornell-magazine.cornell.edu/Archive/2005sepoct/depts/Currents.html) that “One-third of all VC deals fail and another third break even, according to the National Venture Capital Association. But the rest make money–sometimes a lot.” So perhaps it is only 9 out of 10 *ComVentures* investments that fail. If the sort of support of entrepreneurs described in the note is true, perhaps their failure rate is not surprising.

Veteran VCs will tell you that the companies that succeed (including all 3 of the major players in the Internet today: Microsoft, Google, and Yahoo) are those in which entrepreneurs remain involved with the company. VC’s tendency to ignore this bodes badly for them, for their partners and investors, and for entrepreneurs who do not carefully check up VCs reputation before accepting investment.

“At the time, investors holding preferred shares, including Benchmark and August Capital, had claim on the $45 million they had invested collectively. The four founders, the suit says, were led to believe that the company was worth $23 million to $38 million, making common stock worthless.” Had they been given this information, they contend they wouldn’t have agreed to the merger, rather they would have waited for their shares to increase in value. ”

As you can see the epinions guys probably had a better reason to complain than the founders of FilmLoop. They were told that their shares were underwater when in fact the VC’s knew that it would soon be “above water” but witheld it from the 3 founders who had left.

In FilmLoop’s case, there was no way in hell the company would have been worth $13M and the fact that it was actually sold for $3M showed that the VCs had no intention of “screwing” the founders of gains that they otherwise would have gotten… they were just trying to preserve any remnant value in their investment.

This debate on TechCrunch is just jaw-jaw for the failures and unsuccessful. An informed editor or analyst or forum would have thrown it out. As they say, when what you read is for free you get what you pay. Forbes and Fortune matter. TechCrunch or ValleyWag don’t.

We won’t miss the entrepreneurs that choose to go somewhere else. Our future success is not dependent on those losers.

http://www.thealarmclock.com/m.....isled.html

As hot as the startup scene is, even with the large flow of venture capital money, VCs are in the business to make money. A VC has to balance risk and return and in the process make some difficult decisions.

Yes it is unfortunate that they had to pull the plug but knowing what I know about FilmLoop, the company was over capitalized in the first place and blew through too much cash too fast. Blame it on bad investors or management but for this kind of cash, I would expect a larger business.

Finally let’s not forget, venture money is not free or just something a company can take for granted. Assume you had debt investors in your company with your house as security, would you as an entrepreneur blow through $13m without clear revenue and positive cashflow in sight.

So let’s get realistic, everyone is in the business to make money. This means balance risk and rewards and at time making tough decisions. So wake up and stop drinking the kool-aid folks.

If the VC insists on terms that they will be able to pull their money out, you are free to tell them to go to hell. But if you agree, you can’t really blame them if they do what they do.

Its like if you buy a ticket and the fine print says: “If titanic hits an iceberg, captain and his partner will fly off in the plane. There are some lifeboats to fight over if you wish. Sail at your own risk. “. You are then free to decide if its worth going. The Filmloop founders are either naive (don’t blame them), or have just suddenly decided that its “not fair” (Assuming they’re the ones itching).

I wish the founders and employees the best with their next venture, and Im sure in a couple of years they’ll be happy having succesfully sold a company on their CV as opposed to a blow-out.

ComVentures probably did them a favour.

I was surprised to find, after several extended meetings, a rather arrogant, insular and close-minded team, that somehow felt that they had it all figured out (in spite of amazingly obvious evidence to the contrary). I lost touch with them when they suggested that “bringing in interns” to investigate some of my ideas (interns with no experience) would be a better use of precious time. So they saved maybe $10,000 to $30,000 but lost four months. I think we can all see the results.

Lessons– 2:
1) Management needs to be held accountable by VCs and employees of start-ups to face product / adoption failure, and in fact to embrace it, with renewed energy and an open mind about how to “change direction” when folks who care (VCs) bring in experienced experts to help them succeed.

2) VCs can’t have so much on their plates that they leave a company like this (with direct competitors) to p*ss away $7 million before something becomes “urgent” enough to warrant “drastic” measures. Shame on the managemnt team, and shame on the VCs. This then might be part of the “real evil” of the participating VCs… they should not have allowed FilmLoop to drift so long, and should have intervened early enough to avoid this crash landing.

Cheers,

Matty

There’s a semi public fight being played out, starting with a TechCrunch story, between FilmLoop and ComVentures. As someone who has seen both sides of the fence, albeit at smaller scales than what’s being discussed, I have to come out…