This week’s short list of stories, posts and other founder-resources you shouldn’t miss.
Missionaries are good (passion). Mercenaries are not (paranoia). The slide is from a presentation Doerr gave at Stanford on April 2, 2002 (!). We got it courtesy of our friends at VentureHacks, who do a great job of finding needles in haystacks.
Also watch the video of Doerr’s talk:
2.) Valuation: Bad economy? Yeah. Selling opportunity? Maybe. Check out Inc. magazine’s flagship company valuation guide, The Most Valuable Companies in America : “Investors are loaded with cash. Boomers are looking to buy. Foreign firms are eager to invest. What does that add up to? A seller’s market for your business.” It describes the main buyers (serial entrepreneurs is one to pay attention to!) and has slides on cheap vs. expensive shops. We note that besides software, the hottest businesses are “anything aimed at the aging U.S. population.” (F|R has written about this previously.)
3) Understanding Venture Capital. It’s a hard nut to crack. But this paper form Havard Working Knowledge attempts to decode the often seemingly arbitrary valuations of vc-backed startups by “explor[ing] mechanisms for limiting the asymmetric information that potentially plagues the acquisition of young venture capital-backed companies.” As you seek funding for your own company, this ought to help you understand how startups are VC-funded and why; how they’re bought and sold, and why. One of our key takeaways: it is strictly because the notion of value is relative/subjective that relationships are so important in this business; for deals to work well it is critical that perceptions of value between two parties are compatible, which usually (but not always) means interests must be aligned. Hence Harvard’s emphasis on the “bridge-building alternative [because] the personal relationship between the two firms is critical to conveying value-relevant information about both the target and the acquiring firm.” Just ask Jerry Yang at Yahoo!.