Venture capitalists are often referred to as vulture capitalists and until you read the book: Confessions of a Venture Capitalist, Inside the High-Risk World of Seed Funding by Ruthann Quindlen; Well, you’ll probably never understand how they got that libelous title. In the book, Ruthann explains what it was like to work in Silicon Valley at a venture capital firm before the dot-com bubble burst.
If you’re considering raising venture capital for your new business, perhaps you should read this book. After all, how would you like to sit down and have a cup of coffee with a venture capitalist who has been in the industry for years before presenting his business plan? In the book, they describe how venture capitalists will work with many companies at the same time hoping one or two will land a big payout. The rest are hoping to break even or lose money and will eventually unravel.
The world of venture capitalists is all about return on investment in a very short period of time and they are not just looking to make a profit, they are looking to make 10x or more of the money they invested. There are a lot of venture capital firms out there and they often bet on the jockey and not just the horse. A business idea or concept can be very good, but if the entrepreneur is unworkable the venture capitalists will have to pass. Please consider all this in 2006.