Great ideas do not make for successful startups and VCs need more V....so say survey results
By Tom Foremski - November 18, 2005
Interesting survey results from Foley & Lardner on startup companies--things we knew but sometimes forget.
Who was surveyed: "The survey, measuring the attitudes and perspectives of top executives, advisors, outside consultants and investors in the emerging technology industry."
Here are my takeaway points:
-There is a lot of capital wanting to invest in startups but there is a lack of good managers.
-60 per cent said quality of management is single most important factor for success: "Overall market dynamics (18 percent), access to funding (10 percent) and quality of the business plan (eight percent) were distant choices."
-Only 3 per cent said intellectual property was the most important aspect of founding a startup.
My take: This means a good, even great idea for a startup is not enough, you need a great team. If all you have is a great idea you don't really have anything of much value. Many startups I meet won't talk about their "great idea" beyond a certain point but you should be free to talk about your great idea because only you can execute on it. Otherwise, anybody can run with it.
-More than 75 per cent said M&A is most likely exit strategy in next few years.
-IPO is unattractive because of high costs in being a public company and all the other related issues.
-It is very difficult to find directors for startups. "A majority (64 percent) cited “management” as the most important factor—over cash compensation (36 percent) and equity incentives (32 percent) —for attracting qualified directors."
My Take: This is exactly why I have been saying that the next generation of emerging companies, the new rules enterprise/venture will be private. Being private also means your competitors cannot benchmark themselves against you.
And, my favorite quote from one of those surveyed:
“VCs should take more V and act less like a bank.”
My take: Too true. In fact, I meet more ex-VCs these days, using their venture knowledge to run their own companies. It is a knowledge capital world now, uppercase V and lowercase c, is how the Vcs should present themselves, and the better ones do. imho.
More here: http://www.foley.com/ecsurvey
« Hot or Not? Give ten percent of everything away....Hot! | Main | USA Today's Kevin Maney's Blog... »
November 18, 2005 | Permalink | Comment | Category: | Subscribe to SVW
- Top Stories:
- Tech Awards For Benefiting Humanity
- The Death Of The Search Algorithm? Techmeme Has Six Editors
- TEDxSF - Little TED Just Like The Big TED
- SNCR Research: Social Media IS Influencing Business Decisions
- What's Next? Beyond Real-Time...
- PearlTrees: A Novel Approach To Human Mapping Of The Internet
- MediaWatch Analysis Part II: Google Has More To Lose Than Murdoch
- MediaWatch Analysis: Murdoch Will Negotiate Payment For Access To Basket Of Content With GOOG et al
- WeekendWatcher: The Sheer Number Of Things Will Devalue Them
- ChipWatch - Where Will The Next Generation Of Engineers Come From?
- Public Healthcare Could Cut Startup Costs And Help Spur Innovation
- Is GOOG's $750m AdMob Buy Strategic Or Dumb? An alternate view...
Comments (3)
I agree Management is the choke point...but isn't that a chicken/egg thing?
If someone hands me 10 million, I'm sure I could pull some senior people out of larger organizations.
Posted: November 24, 2005 3:35 PM
Yes...to some extent. You still need to know who to hire and provide the leadership for that team, which means you, yourself have to be a great manager as CEO.
Posted: November 24, 2005 4:03 PM
Yes, yes, yes, by all means, what is
really crucial is experienced management!
All we have to do is look at the leading
examples, the deep management experience
possessed by the founders of Intel,
Microsoft, Oracle, Dell, eBay, Yahoo,
Amazon, and Google!
Posted: November 26, 2005 8:32 PM