on Oct. 12, 2011 :
Ritchie Campbell, MBA, PhD, Adjunct Professor of Entrepreneurial Finance & Economics, University of Washington, Bothell WA.
New ventures have brought global-leading innovation to America and have provided more new jobs than all the large, mature corporations combined. From that perspective, if we can help new ventures succeed, we not only help entrepreneurs realize their deepest dreams, we also help create new jobs and accelerate the advancement of innovation in America.
That’s why Gerry’s excellent book is so important: it helps new ventures succeed.
As his book makes clear, the reality of new ventures is that most will not get financial backing from VCs. For every 100 companies screened by VC firms, only 1 ultimately receives funding. And out of the select few that do receive funding, half of them will fail; one-fourth will never deliver the hoped-for promise; and one-fourth will succeed (some marginally, but a very, very few might wildly succeed).
So, for a $100 million VC Fund, over the course of 5 years a VC might screen 2,500 - 5,000 promising companies, and only invest in 25 of them. And, of those 25, maybe 1 will create the success needed to make the Fund successful. Daunting odds.
As a very experienced VC who has reviewed thousands of requests for funds, and who has worked one-on-one with hundreds of entrepreneurs to strengthen their businesses over the last 20 years, Gerry explains how a new venture can greatly improve those odds.
First, Gerry helps a new venture understand how to increase the chance of receiving VC funding (Take the Money…).
And, once they get the money, through his advice on customers, sales, competitors, products, pricing, business culture, and market decisions, Gerry explains how a new venture can greatly improve their odds of succeeding(…and Run).
Whether they are as different as clean tech, cloud computing, or drug discovery, new ventures must successfully advance through a common set of business stages: Initial Planning (Product Idea/Founding Team), Prototype, Pilot Study, Market Launch, Proving Stage, Exponential Growth/Scale Stage, and private investor Liquidity Stage (IPO or acquisition).
In order to successfully advance the company through each business stage (to create progressively higher company values), CEO/Founders must identify the key milestones inherent in each business stage (finish product development, get pilot study going, fill-in executive team gaps, accelerate revenue levels…) and determine the resources they need to successfully complete each milestone.
Indeed, the essence of the daily life of any CEO is the determining, gathering and allocating of resources needed (people, money, business relationships, planning…) to consistently advance key milestones (product development, financing, sales, build business processes, stabilize technology, make company’s brand recognizable & reputable, create ways for customer feedback to link into product/service improvements…).
Entrepreneurs who want to find out more than just how to raise money from VCs—-those who want to know how to advance their new ventures through each business stage and ultimately create an IPO or other liquidity event-—should buy this book immediately.
Gerry offers indispensable advice for every stage the business is in: advice that only someone who has been in the new venture businesses for a lifetime could provide.
Congratulations Gerry, you have written a super book!
(reviewed 60 days after purchase)
on Aug. 14, 2011 :
Gerry Langeler provides an insider's perspective to the whole venture capital scene that is normally unseen by the prospective entrepreneur.
The book gets into the nitty gritty of exactly what venture capitalists do and how they perform their evaluations (as opposed to valuations). He provides loads of tips and anecdotes regarding do's and don'ts for people looking to get VC funding. It's clear that he's been doing this a while (20 years) so the advice is very practical. "Here's how a company we dealt with got what they wanted ..." "Here's are the characteristics of a loser CEO" etc. Even if you don't use a checklist method, all the advice nevertheless provides a useful framework and perspective.
It's a quick read and Langeler addresses a multitude of issues succinctly although he's a bit heavy on the analogies. The book also does not analyze startup success from a primarily quantitative perspective so it should be very accessible to all start-up hopefuls - though being familiar with the quantitative side will provide even greater benefit from his insight. As far as business books go, this has a strong emphasis on the qualitative aspects: building and managing productive relationships between the VC and entrepreneur, building a successful company, giving an effective presentation etc.
While he drives the point home that most start-ups are not a good match for Venture Capitalists; if you are among the few with the grand vision and scale that VCs are looking for, you will no doubt save a lot of time by following Langeler's advice. Even for those that aren't looking to be the next Google, there is plenty of solid advice (with a unique VC perspective) that applies to all entrepreneurs - from the guy working in a garage to the well-established company ready to negotiate for another round of VC funding.
(reviewed the day of purchase)