If you get funded by them do you also have to wear a button down shirt, no tie and a dark blazer? What’s with that? Do they have a rule about being in the club - you gotta wear a uniform? Seems odd? Like an all boys private school.

Who really likes wearing a blazer - just seems odd. Are they rebels because they ditched the ties? If you have dough to invest why do you try and look corporate?

Ahh well - just thinking - Thanks for the post!

Cheers,

Eric

It’s not corporate Eric, it’s called not being a sloppy self-entitled creative with egos bigger than his own shadow.

it’s not corporate, but it’s clean and professional image for serious business.

Michael, you had me re-reading things a few times in that article. who’s the dead man proofreading your stuff?

On a serious note, are there any specific word of their capital floor or min per venture?

Interesting to see what the results of this group is after a few years of funding in the trenches of uncertainty.

Jon

Thanks @2 Faramarz - that makes sense to me. I was only joking around - I will be respectful of VC’s in the future - thanks for the advice.

Cheers - Eric
P.S. their investment profile is as stated on their website: “Our area of primary interest and our area of greatest expertise is early stage technology ventures; we are especially interested in consumer Internet companies. We primarily invest at the seed stage, with a typical investment of $500,000-$5,000,000.”

A better name for their company might be ‘Once Were PayPal’. I agree with Eric, they ‘look’ a bit strange all standing there in their uniforms … any idea where they shop - I could do with a new uniform

It’s just a fucking picture.

it’s an ad for the sears’ young mens collection

Wow Michael, did we hit a nerve?

If they raised just $80 million more they could buy digg

test to see if i can look like Michael Arrington.

Sweet…, I might have to setup a meeting

One question I have - excuse my ignorance:

If you were to submit a 20 page powerpoint file to these guys (as requested on their web site) pitching your idea what guarantee do you have of confidentiality?

We’ve been working on a flash-based cms tool for a few years now (yeah, yeah, what’s my problem (why isnt it finished) - self funded, of course) - I’d hate to see my concept wind up in the wrong hands after all our hard work.

@chrisw: You dont have any guarantee. It is rare that a VC will sign an NDA. It is the risk you take. If you have a couple years head-start, it is likely you can get to market first. What’s the barrier to entry once you launch? You’ll have more leverage if you have launched and can show usage in the market though.

@william

Our barrier to entry is our desire to launch with a solid, amazing product. We’re close - like a few months away. We’d be looking for VC funding to be used for infrastructure (hosting etc), marketing and ongoing product development. I already run a successful web development company in Sydney Australia (clients include IBM, PayPal, Intel) but I want to disconnect from web development projects to focus on our product entirely. I’d rather ‘partner’ with a good VC company than try to go it alone or raise capital from non VC partners who really don’t understand or have experience in the web sphere.

Sending a powerpoint file to a bunch of guys I don’t know or trust (regardless of their creds) would be pretty risky as far as I’m concerned.

Or am I being over cautious?

The whole ’seed stage’ statement is bullshit. They don’t return calls. They don’t respond to emails. They are one of the most guarded, NOT OPEN VC firms in the industry. Even Sequoia responds within a reasonable time frame.

@chrisw: Never send materials greater than a brief executive summary cold. Its a black hole. And frankly, with the Founder’s Fund, you will never get through.

Dealt with 50+ and these guys are on the bottom of being open to entrepreneurs not already in their enclave.

#1- haha i noticed that also.

@chrisw

If I can elbow in on the conversation…VCs really aren’t going to be your “partner.” At best, they are your investor, with a desire to monetize you and your idea as fast as possible, as much as possible.

You’re right to want to find the right kind of VCs who are knowledgeable about your market space.

From the VCs perspective, receiving a PP from a guy whom they don’t know or trust is equally risky, as far as they’re concerned. The chance of hitting paydirt doing that corresponds to being hit by lightning…

Here you have a fund mainly created by PayPal (eBay) folks. The FirstRound Capital team also comes mainly from eBay/Half.com. Where are the Googlers funds? Investing in Real Estate? Green tech? C’mon, put the money back to where you got it from, you (beeeeep)!

Guys I don’t know why you are analyzing what they are wearing so much. Most of the younger generations in business that are senior within a company will be of a similar style to them.

Congrats to Founders Fund on securing this second larger fund, hope they utilize it to give lifeblood to young, innovative and world changing companies. Will be interested to see who the two companies are they have funded already.

Best,
Scott

@ Dan - if you don’t sell your business concept to VC guys and only give them a very broad overview of what you’re about then why would you expect them to respond? My broad pitch would be “I have a flash-based cms that’s very cool” - not very informative or compelling and hardly enough bait to illicit a response.

There’s the problem: in order to get their attention I’d have to ’spill my guts’ so to speak and show them exactly what my product does - even give them a demo log in. But this then raises the issue of trust.

@ Don Jones - I get your point regarding ” VCs really aren’t going to be your “partner.” “. I’d like to think that they’d be smart enough to realise that building something beyond it’s initial launch phase into a highly valued online property would/could lead to bigger returns. How is it risky for them to receive a PP from someone like me? If they’re interested then the ball is in their court - not mine. Am I missing something?

Thanks for your previous responses - I’m glad to be talking to like minded people for a change.

Congrats to Founders Fund on securing this second larger fund

Man - those guys are all hot! I’m drooling. What was the article about, anyway.

Next time, ask them to pose topless.

sincerely,

angela hayden
art goddess

p.s. we ladies don’t get enough eye candy around here.

21. Tampa WebSite Design

off topic. i just went to you site and I love it. great design. It’s wonderful when the business world actually let’s artists and designers do their job.

sincerely,

angela hayden
art goddess

@chrisw: I dont think youre being too cautious, just prudent. FF prefers consumer-focused tech. There are many other VC firms with plenty of cash in their fund left, and you could probably get away with something like $750K for a minority stake. If you know someone with a connection to any VC firm it is best to start there. They will refer you to another firm if it looks good enough, but is not their niche.

@chrisw:

That is what the Executive Summary is for. Think of it as your elevator pitch on paper.

If you can’t gain the interest of the VC in a summary, chances are they aren’t a good match. I would present a Power Point and working demo in the initial interview. They might not even want to see the Power Point. Let the product speak for itself.

With a product like yours (Flash Based CMS), you would really have to “WOW” them; perhaps by having a few vertical markets.

My $0.02

-ronlg

Wow, Hanson is all growed up!

They are probably 4 very very bright individuals. Congratulations to them and all their successes.

In theory, it sounds like a great VC for entrepreneurs. In reality, it is probably more like a close-knit group that only invests in startups that their friends recommend. Somehow I get the feeling that if you don’t know them, you aren’t going to get much airtime if any. Has anyone else besides “Dan” tried to work with them?

young mens collection?

Just one more comment, their website design is flat, boring and gray as death. Why is it so hard for business people to let go - let the designers do their jobs.

control freaks!

sincerely,
angela hayden
art goddess

p.s. for a small fee they can contact me for a consultation.

why do successful entrepreneurs become VCs? is it to do something different? or because that’s what everyone else does? or because it’s easier than trying to start another company from “in the trenches?” i mean what gives, when i was little i never thought “man, i want to be a VC” - in fact i don’t know that they even existed back then…bill gates isn’t a VC, steve jobs isn’t a VC…what gives? is this just the sign of the times, part of a pump & dump scheme centered in the valley and all about increasing valuations so the rich can get richer without doing much real work? please discuss. possible starting points are “VCs - the illusion of prestige” and “VCs - i gots me some some money, now make me some more!”

Angela, don’t you have school tomorrow? goto sleep already! that wasn’t a consult, it’s an order.

I was completely thrilled to read this news. I knew they were working on a fund but thought it was supposed to be in the $150M size.

IMO this fund will change the way deals are done. Just as we always look for a disruptive technology in the market to invest in NOW the shoe is on the other foot. There is now a disruptive fund.
There are three things that the Founders Fund has going for it:
1) Series FF shares
2) Young guys who understand technology
3) Young guys who understand the operating dynamics of running a Web2.0 company

—There are many General Partners from other traditional funds that should take this as a queue to retire—

Ok - world wide exclusive: here is a short (quick and dirty) video demo of our Flash based CMS.

http://www.marchdigital.com.au/demo/demo_001.html

As you’ll see from the video our product is in the advanced stage and nearing completion. This is the sort of demo that I’d be prepared to show VC’s (only better prepared) - I’m showing you so I guess that goes without saying. We have never shown this product publicly and only ever shown it to people we know and trust (or figure wouldn’t have a clue how to build it anyway).

We’ve been developing this system for a few years now - slowly refining it as Adobe releases new versions of Flex. The system is multi-user - multiple people can collaborate on the development of a site at the same time. It supports media such as Flash, Images, text, MP3’s, Video (FLV for now but soon it will support .mov, .mp4 etc) and attachments such as PDF’s, .docs etc. It has built in multi-file FTP making the uploading of files simple. Users can opt to build their site without ever seeing a line of code and the system is 100% WYSIWYG. There is a code view that enables tweaking if needed - the codebase is simple XML. The sites navigation system is dynamically built in realtime based on the site architecture map. It’s pretty awesome - if I don’t say so myself.

What chance would we have of securing a good deal from a US based VC like Founder Fund based on what you’ve seen here? Bare in mind that we are an Australian company (if that makes any difference to your opinion). From my research (googling a lot - reading lots of blogs like TechCrunch) there is nothing else on the market that compares to what we have created.

Being an Aussie company it often feels like we might as well be on the moon when it comes to accessing VC’s who ‘get the web’. I’ve heard a number of times that US VC’s don’t like investing in foreign companies, but Aussie VC’s seem to be too cautious or in short supply. It’s bloody frustrating!

We are seriously about to start shopping it around for funding. Wish me luck

Chris Walker
March Digital
chris@marchdigital.com.au

There’s still no way to get venture funding if you don’t have connections. Hard work and dedication == bullshit. You’ve got to either get ready to spend a year of your life kissing peoples asses or get your business to profitability by yourself, which is the better approach. Don’t waste your time trying to beg these dudes to fund you.

@chrisW

your demo sucks goat balls. i sat there for two minutes waiting and nothing happened.

@Dan B - It’s a flash video created with Camtasia. Camtasia sucks goat balls, as you put it - or perhaps you internet connection is really slow. The demo works - I just received feedback from a guy in Canada.

I’ve heard this same piece of information parroted in every panel, every talk, every QA session, and in every book about VC funding: Your idea is not unique. Your idea is not amazing. Your idea will not be “stolen.” If you bring an NDA you will be considered a total newb and will not get funding.

Wow, a Flash-based CMS. If a VC thought they could do that easily enough to just ’steal’ the idea and run with it (as opposed to funding somebody who was already close to release), it would have happened already.

So yeah, it’s a good idea. It’s not a particularly unique idea, though.

And I couldn’t load the screencast either. I tried.

If I were you I’d release all the details, put videos online, put out a press release, and get as much press as you can. Right when you do that, pool all your money together and fly your best two or three people out to SFO in time to attend whatever relevant conferences and mixers you can. Go to events with “Hello, My Name Is,” nametags and write your company name in huge letters. Demo at events. Answer questions.

If you can’t get some solid connections after all of that, then you’re doing something horribly wrong. If your product is really that good then it sells itself. (Then what do you need funding for?)

In response to #35, you know what? All those options are possible at the same time. I’ve been working hard AND trying to meet people. I am not the best at networking but damnit I try! As a bonus, I’ll have a product out within a month.

Thanks Aaron. I’m going to re-compress it - without Camtasia and re-upload in a few minutes. Hopefully that will resolve the issue.

@chrisw
Demo works. Just takes a bit to load.

It’s interesting. To be perfectly honest I would need to see more….

BUT, based on looking at some of your work in the cartoon and commercial area, this is where I would consider spending some time. You guys have very good talent here and video is a key growth area.

I can’t speak for The Founders Fund. BUT, here are things to consider when taking ANY VC money.
a) Must have: product, revenue and customers. Otherwise you get bent over.
b) Even if you have product, revenue and customer you’ll get bent over on valuation.
c)Best case scenario they take “only” 20%. Realistically they’ll take 50%
d) They will control the board of directors
e) Chances are greater than 80% that you will be fired within 12-24 months
f) They will control the product direction

My advice is to grow through your internal sales and keep costs to a minimum. If you are bursting at the seams and need an infusion of capital look for some “friendly”angels.

I am not aware about any issue on this but I like this business model and especially the liberal voting rights.

Forget about the chaps in matching blazers. What are VCs doing with all of those books?!

Aside from that, my advice for a budding entrepreneur is to build your technology out as if it were a brick and mortar biz. Meaning, concentrate on the user experience and revenue from the get-go. Any hint of success will have the VC coming to you. Worrying about money to build that dream infrastructure will set you back. Then make your second venture the big infrastructure one where you can utilize the credibility of your first success.

Impressive partners.. and, faithfully facebook [of liking to give old terms
new meanings].. so now FF has a new meaning.. (insteadof Friends &
Family) (and inadditionto their company name).. Series FF.. certainly
interesting.. though wonder how many people would give a Flying F
[what]?.. (well, just after MA)..

ChrisW.

There are very few VC’s in Oz who get it. Maybe some of the guys at Jagen (Vic) but otherwise yes - there ain’t much opportunity for explosive growth with Australian based VC’s.

If you want US funding, you have to move to the US. Period. (Maybe there are exceptions but they are *very* few and far between but a flash based CMS system isn’t distruptive so it would be an uphill battle. There are valley VC’s that won’t invest in companies more than an hour drive from their office - their time is everything, so engaging them if you don’t have a base there is just going to eat time and money.

You have some good short term money options in Oz - COMET, EMDG, Austrade - use them to help you get over there. Engage firms like BSI/Anzatech to help you navigate the US landscape. Speak to Australian companies who are over there, etc.

Steve B is correct. You can’t keep the company you’ve created; Investors own it.

Thanks Jon. I’ve heard these comments re: US VC’s before and I agree that eventually we’d have to move there. It’s pretty tough finding people in Australia that have been through it and are willing to give up their time (in fact I haven’t found anybody here that has). It’s pretty frustrating working on the web, developing web based products but knowing that any chance of real growth means moving half way around the world. But, I guess if thats what it takes ….

I have replaced the previous demo I uploaded earlier with a newer version with narrative. Our product isn’t world changing but we feel that it does have a real market potential - we’ve proven it already with the previous incarnation of the system having built sites for Sony BMG, Ryobi and Optus using our first flash-based CMS.

http://www.marchdigital.com.au/demo/

Cheers

Chris

I remember Steve Jobs apply VC, hired John Scully, and later fire him.

I agree with #35. Its all connections, connections, connections. Just look at what Founders Funds put money into. People they “know”. This why crap gets funded and people wonder “wtf?”.

America is all about nepotism these days, from funding to the presidency.
You can still make it on your “own”, but its getting harder and harder.

@vrox — very true.

That said, other than nepotism, let me also quote Jack Ma (of alibaba.com)
saying of - VC’s follow great companies, not great companies follow VC’s.

So, there’s not much use to “beg the VC.” It just won’t work and waste
your time, if without connections.

It’s all about connections I agree but perhaps not so much nepotism as much as it is about trust. Think about it, recommendations from friends are more credible than a random stranger on the street, no?