opps, meant @bgurley of benchm…
opps, meant @bgurley of benchmark on his investments, founders, the VC biz, and why Benchmark invested in Twitter. http://bit.ly/YRFKg
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Interview w/ @billgurley on hi…
Interview w/ @billgurley on his investments, founders, the VC biz, and why Benchmark invested in Twitter. http://bit.ly/YRFKg
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Startup 128: An Interview with Bill Gurley of Benchmark
This post is an email interview with Bill Gurley of Benchmark Capital. I sent Bill 10 questions on what he looks for in his investments, the people he backs, the state of the venture capital business and why Benchmark invested in Twitter. Enjoy.
On Venture Capital investing today
1. What are your top investment areas going forward?
We don’t really work that way. All I could tell you is what are the three most common investment themes looking back. We simply don’t sit around planning the future. We try to meet with as many great entrepreneurs as we can and then make a judgment on the quality of their vision versus the state of the market. Recent themes have been cloud computing, open source, user generated content (UGC) Internet plays.
2. What are the most important things you want to learn about a company in a first meeting?
• Quality of the idea – this is from both an economic standpoint and a defensibility standpoint.
• Quality of the founder – smart, motivated, goal oriented.
• Mode of operation – frugal vs. excessive.
3. It seems most VCs keep a list of deals they “missed”. What’s your list?
It’s long and painful.
I met with all of these companies at an early stage before they raised venture capital.
• Overture – Bill Gross was kind enough to show this to me
• Akamai – this was Mark Gorenberg’s deal at HummerWinblad, but I should have been supportive, and I missed it
• Skype
• Baidu
• And of course the big one: Google. I have profound admiration for John Doerr and Mike Moritz for knowing to step up here, especially at a high price. It was far from obvious.
I probably forgot 1 or 2, and I am confident there will be more.
On Entrepreneurs and Startup CEOs
4. On the “qualitative” side of things, what do you look for in a entrepreneur or startup CEO? and what turns you off as well?
On:
• Intellect
• Salesmanship without being overly promotional
• Pragmatism
• Resourcefulness
• Confidence
Off:
• Overly promotional
• Doesn’t listen
• Unwilling to focus
• Lack of appreciation for finance/economics.
5. What are the top 3 do’s and don’ts for an entrepreneur presenting at a Benchmark partners meeting.
I would suspect they are mostly the same (as question 4).
Here are a few tactical things for the partner meeting presentation
• Don’t bring people that don’t have a role in the meeting
• Always include at least one “financials” slide even if its more about costs than revenues — weird to have to ask, and even weirder to reply “we don’t have one with us”.
• Don’t use over 20 slides.
• Control the flow of the meeting.
On the Business of Venture Capital
6. Opentable (Nasdaq: OPEN) is one of the first “silicon valey” initial public offerings (IPO) since the economic downturn. Why do you think the company was able to get public and was received so well?
I actually believe that the buy-side has ample demand for IPOs. The key problem is a supply problem – most companies either don’t want to be public or aren’t willing to make the tough choices it takes to get public (healthy margins, sarbox implementation, etc).
Being public isn’t easy, and for the CEO and the CFO it’s downright brutal. I think that’s why the valley is obsessed with “alternative markets” these days. They want the benefit of liquidity without the headache of being public. I think they will be disappointed.
7. What do you think about the suggestion that today’s venture model of large funds and big investments does not work in a world where companies can get real traction both as a consumer company or a enterprise company by leveraging services such as amazon’s ec2 and all the available open source solutions?
I don’t think the data proves this theory out. With the exception of Salesforce.com and Siebel, I don’t know of any multi-billion dollar public companies that didn’t have venture capital. You might be able to build a feature for $1mm, but its much harder to build a company. All of the $B Internet companies have/had venture backing.
This doesn’t disqualify the accusation that some funds are too large. They are different issues.
8. Clearly, the startup world is much more “flat” with companies existing across borders and getting started around the world. What is your long-term view on Silicon Valley as the “epicenter” for venture capital in the next 10-20 years?
We are tremendously excited about the future of Silicon Valley — it is our unquestionable focus as a venture firm. We want to be the best firm in Silicon Valley.
That’s not a reflection on the opportunities elsewhere. I happen to be very bullish on China, Russia, and Brazil when it comes to venture opportunities. I just think those will be best served by local firms on the ground in those regions.
9. Benchmark has a unique structure in that all partners are equal – equal pay, equal carry, equal votes, etc. Why has that worked and why haven’t more firms adopted that model?
It works for 3 key reasons.
First, our partner’s don’t need to negotiate compensation every time they raise a new fund, so we are incented to all work together versus proving our worth to one another. My partners deliver value-add to the companies I work with all the time.
Second, it keeps a high bar on who comes in. There is no junior team at Benchmark.
Lastly, as an entrepreneur, you are always dealing with a General Partner that has a say in the firm — your deal won’t get trumped by the “Senior partner” back at the shop.
Others don’t adopt it for the same reason other partnerships in legal, investment banking, and real estate haven’t — it’s good to be king (from a financial standpoint).
On Twitter
10. Benchmark recently invested in Twitter at a pretty lofty valuation. What drove the investment and how are they going to make money other than the often-rumored acquisition?
See my answer to question #3 above.
———-
I hope you liked the post and feel free to leave a comment or question and I will relay to Bill.
Lastly, if you like this, please share it with friends using the buttons below. And, if you want an update for the next post, sign up below or follow me on twitter. Thanks.
More info
- Startup 124: Term Sheet – Valuation and Dilution
- Startup 125: Term Sheet – Liquidation Preferences
- Startup 126: Term Sheet – Anti-Dilution
- Startup 127: Term Sheet – Voting Rights
- Follow Bill on Twitter
- Bill Gurley’s Blog
- Benchmark Capital
- Full Disclosure – Benchmark invested in my last company, Vontu. I am also very proud that Bill recently rode up the mountain from which it’s named. Mont Ventoux. Here’s a shot of him on the summit.
- Home page photo of Bill from http://www.flickr.com/photos/briansolis/
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Twitter Weekly Updates for 2009-06-21
- posted "Startup 127: Term Sheet – Voting Rights and Protective Provisions" http://bit.ly/Z4i6q enjoy #
- kickin' it old school. twitter from a commodore 64. http://bit.ly/IB1eP #
- Powerful book about mental illness, homelessness, & the power to make a difference. http://bit.ly/8DYML more at http://bit.ly/sLuO4 #
- very funny sign. the omnivore's dilemma… http://bit.ly/17XXTh friends are taking a trip around the world and sent this #
- AT&T can run but can't hide! A post on tethering hack and more on iphone v3 software… http://bit.ly/AN8lw #
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AT&T can run but can’t hide! A…
AT&T can run but can’t hide! A post on tethering hack and more on iphone v3 software… http://bit.ly/AN8lw
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AT&T can run but can’t hide! Tethering hack and more on iphone v3 software…
Just uploaded iphone v3 to my 3g. Going to keep a running list of thoughts but here are some initial thoughts.
First, my AT&T rant. AT&T still, well, sucks. Almost every other carrier announces support for tethering, i.e. connect your phone to your computer to use as a wireless modem, except, well, AT&T. That’s the bad news. The good news, some smart guy figured out how to turn to make it work without jail breaking your phone! Download tethering here. About half way down the page, click on “Mobile Configs” and download section and then choose your country, (USA for all of us having to live with AT&T!) and then AT&T and it installs and requires a restart. Afterwards, on your iphone in the network settings you will see a tethering option using a cable or bluetooth! Now, allegedly AT&T is going to start charging for this in a month and rumors are that it won’t be cheap. Maybe an additional $55 which seem outrageous especailly in comparison to the rest of the world. Apple needs to support another US carrier to get some competition going… Also, there are instructions to turn on MMS for AT&T as well, but have not done that yet as not a big deal to me.
Anyway, now that I got the AT&T rant out. Here are some initial thoughts on what Apple as done on the software side.
Good Stuff
1. Speed – it’s faster. And the most important place its faster for me is with contacts. I have a couple of thousand contacts and it sometimes would take 10-20 seconds from when I would start typing a name before any would show up. now’s its a second or two. Also, other things generally seem snappier. Safari seems much faster too.
2. Search – having search everything is great. should have been in v1, but great its here. It’s a little strange how to get to universal search in that it is from your home screen and then you swipe to the left. a search button addition would have been a little more obvious.
3. Landscape mode for everything – pretty much works as you expect. GREAT for email. there are some kinks to work out as the super smooth scrolling from v2 has some bugs in landscape mode but they will figure that out.
4. Copy and paste – one word, finally. Ok, maybe a few more words. works pretty well. like the ability to extend the selection beyond what is initially highlighted. now if they would add some of the smarts from the mac for seeing a time and date in an email and offering to put it in the calendar, that would be great.
5. Calendar – can now synch with CalDAV to Google calendar and others as well as Microsoft ActiveSynch
6. MobileMe – after a year it seems to work well, which means that I update info on my desktop and it updates my phone and visa versa without having to think about it. There is still the occassional contacts disappearance but is always solved by creating a new contact and then all the old ones come back. That said, one cool feature that is new to mobileme is to be able to find my phone and also to wipe the data if I lost it. That’s a great feeling of security.
7. Upgrading – i have to say one of the things that is not often discussed is the fact that this is a phone and you can download all kinds of great new features. That’s actually pretty cool.
Not so good stuff
1. Buggy – there are definitely some small bugs. Scrolling issues, some screen update issues
2. Voice dialing requires new iphone 3gs hardware. Why? No idea. I will keep using Vlingo which works pretty well and does maps, searching, et al.
3. Maps – when using maps, it would be nice to have a button for current location when getting directions versus having to type “current…” and then choosing it from the top of the list. I do this all the time.
4. Camera – when taking pictures and you want to be included in the picture (not that I take lots of pictures of myself, but for example Alexandra and I together somewhere), it would be great if one of the buttons such as volume up or down would take the picture.
5. Did I mentioned how AT&T still sucks?
I have not tried the new phone itself, but would appreciate any thoughts on other good and bad on the phone. That said, I have to think that Apple is got something else up their sleeves as this phone design is basically two years old which is a long time for them not to innovate on some new hardware. Anway, leave a comment with your thoughts on the phone and software.
Lastly, if you like this, please share it with friends using the buttons below. And, if you want an update for the next post, sign up below or follow me on twitter. Thanks.
Update:
Techcrunch has done some reviews of the 3Gs hardware. Here are their thoughts on the video capabilities.
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very funny sign. the omnivore…
very funny sign. the omnivore’s dilemma… http://bit.ly/17XXTh friends are taking a trip around the world and sent this
Read More
Powerful book about mental ill…
Powerful book about mental illness, homelessness, & the power to make a difference. http://bit.ly/8DYML more at http://bit.ly/sLuO4
Read More
kickin’ it old school. twitte…
kickin’ it old school. twitter from a commodore 64. http://bit.ly/IB1eP
Read More
posted “Startup 127: Term Shee…
posted “Startup 127: Term Sheet – Voting Rights and Protective Provisions” http://bit.ly/Z4i6q enjoy
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