Nivi · November 14th, 2007
Rich Skrenta, a founder of Topix and the Open Directory Project, recently wrote about Spice Girls VC:
“So one day a few years ago I’m sitting in a VC’s office having a chat. I had a few ideas rattling around in my head but the VC had his eyes on a then-current space which was hot. He tossed a business plan for one of the leading startups into my lap.
“Where’d you get this?” I asked.
“They gave it to me.” [A commenter suggests never sending decks to investors. At least write “Proprietary and confidential. Do not distribute,” on any collateral you send investors. And ask any recipients, in writing, via email, to kindly not distribute the deck outside their firm.]
“He went on to talk about how he wanted to launch a company into the space as well, and I’d be a great VP Engineering. He said he knew a guy with some technology who could be CTO, had a VP Marketing in mind, and then we’d just need a world class CEO to round out the band.
“I formed a theory that the process of seeking VC ended up calling your own competitors into existence. You’ll meet with many more VCs than the 1-2 who end up funding you. But after seeing a company or two get funded in your space, the VCs who passed or weren’t able to get in decide they want to have a bet in the space too. Fortunately they have the benefit of having heard your pitch and the opportunity to personally grill you at length on your approach. [Compare to Farbood’s thoughts on the benefits of meeting VCs.]
“But doing the Spice Girls or N’ Sync thing to put a startup together can be tricky. Startup founders can be so cranky/eccentric.”
Rich Skrenta’s blog is great (a few classics: 1, 2, 3). I would personally guess that the main source of startup competitors is market readiness, not Spice Girls startups.
Topics Case Studies · NDA