Now that I am no longer an advisor (albeit still on gardening leave) I can look back with some detachment on the whole process of raising capital or selling your company. I want to do two posts: what does the VC market looks like today, and to answer the question, what is it with advisors anyway?
The market today:
Over the last 8 years I have been privileged to work with some incredibly talented management teams and entrepreneurs. Through-out each process I have sat through some meetings with remarkably astute, insightful and experienced VCs and corporate acquirers and also some incredibly rude and clueless investors. (I have also met a similarly diverse range of entrepreneurs!)
Let me focus on VC: I will cover M&A in another post.
I think that the European VC scene is a notably better place and that THNGS ARE GETTING BETTER ALL THE TIME.
- The ecosystem for entrepreneurs is getting better: from uni spin-out hubs & clubs to booze fuelled dinner table debates.
- The quality and segmentation of investors is getting better; from international success-stories like Index to small, ultra focussed funds like Eden Ventures.
- The DIALOGUE is getting better; I doff my cap to initiatives like open coffee club which fosters mutual understanding. I believe VC –entrepreneur relationships are far less adversarial and far more informed than they were 8 years ago. (Fred has a nice angle on this too)
It is this last point that raises the question: what is the point of advisors? Let me explain. In the bay area there are no corporate finance houses running Series A B or C rounds. This is done in-house, by an NED or maybe by the lawyer. European VCs ask me: why do European entrepreneurs need people like First Capital? I will turn to that in the next post.