3 Themes to avoid now in your VC pitch
This morning we picked up a useful Q&A with VC Josh Kopelman, at Businessweek.com. Kopelman founded Half.com, sold it to eBay and became a VC. More timely, he sits on the board of Facebook’s $10 million fund for Facebook applications developers. But in the talk with Business Week, Kopelman revealed three things “he’s sick of seeing from startups” in company pitches thesedays. (Hint: Facebook-play alone won’t cut it.) Here they are.
One: Business plans that depend on getting acquired by Google
“I do not think companies should be built solely to be acquired by three or five companies in a quick period of time…”
Two: Revenue models that revolve around advertising from Google AdSense.
…”if a company comes to us and says: “The way we’ll generate revenue is by putting Google AdSense on our pages,” and really hasn’t thought through anything beyond that—those are the companies we tend to really pause at.”
Three: Businesses that piggyback on Facebook instead of picking up where Google left off.
“I think a Facebook application is now a necessary component in an online marketing and customer acquisition strategy—I just don’t know if you’re going to find venture-backable companies there.”
The good news is you don’t have to know everything about how you’re going to make money, you do need to demonstrate independent ideas for how to make money. This is how you and your company add value.
Great post and some insightful tips (some not that surprising).
The big question is how does a small company with an independent idea for how to make money, a clear business model, a sizable worldwide market, no need to be acquired and a strategy not totally dependent on the web land meetings with VC firms?
My company fits that bill – I have even been told this by one VC so far – but we want to talk to more.
If someone wants to offer the user free services, to increase the user participation what’s the harm in Google Adsense as the source(only) for money. Moreover, for a web service what can be the other plausible ways to make money according to you ?
[...] week FoundRead had a chat with Josh Kopelman founder of Half.com, then sold it to eBay and became a VC. Josh [...]