Thursday, June 03, 2004

there are only two kinds of VCs

Guy Kawasaki explains the different kinds of VCs.

Fundamentally, there are only two kinds of VCs: those that will invest in you and those that won't. That's the most important distinction. Your job is to increase the likelihood of an investment. To do this, you should look at several high-level characteristics:

* Are you in the right geographic region for the VC? Most VCs don't want to fly around the world for a board meeting.

* Is your company in the right stage? Some VCs want "proven" companies that already have revenue. Others will take a flier with dropouts sketching out business plans on the back of envelopes.

* Are you in a sector that matches the VC's interest? For example, if you're a semiconductor company, don't go to a VC that specializes in life sciences companies.

* Do you like the VC partner that you're dealing with? Your relationship with the firm will be primarily with this one person.


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