Where Have All the Venture Capitalists Gone?

artlu asks: "I have a great idea for a dotcom company, and I just started to execute the initial stages of my business plan. I developed the initial website, gained a user base, and am about to incorporate in Florida. Now I need to find a venture capitalist! However, every capitalist I approach is fearful of dotcoms. I ask the Slashdot community: How do I find a post-bubble dotcom investor?"

Comments

Maybe it is you?

[passthecrackpipe]

There are still plenty of VC's around - and they have plenty of cash as well! Maybe it is you? Maybe they think your idea sucks? giving away more things for free? they know that that is an exceptionally difficult business model to pull off, and will only work when you have some exceptionally good services to give away.

In your case, there is little that is unique, and you don't seem to have any USP's (unique selling points), anything that I can't already get elsewhere, as part of a larger service, and most importantly, readily visible revenue stream.

I'm sorry to be blunt and harsh mate, but the VC's are still there, they are just talking to people with a better plan......

Re:Maybe it is you?

[gazbo]

Agreed. As a specific example, what exactly does your site offer that The Motley Fool (with a large user base and very high brand recognition) doesn't?

What sort of capital are we talking? If it's around $30k or under, you should have no problem funding it yorself (I can easily raise that sort of capital myself through personal savings and personal loans; as a business one can easily receive more from the banks, not counting any business development grants available to you).

If we're talking more, how are you going to pay them back? What are your revenue streams - looks like just ad-driven to me. So as a VC hoping to have made significant profit on my investment in 5 years, what is your forecast? How much do you expect to get from advertising per user? How many users are you going to attract? How many years will it take for this revenue stream to generate $200k profit, to make it worth their while.

As with the parent, my intent is not to be negative, but as someone who is very much involved in the issues of keeping a business afloat, I think you need to come up with viable answers to these questions in the form of a solid business plan before you go asking for VC. And you have to truly belive that the business plan is feasible, else even if you did get VC you'd be opening yourself up for a miserable time.

A more direct answer to your question, though, would be to attend events in the ICT sector. You'll find there are many agencies, all in a close-knit community, with the goal to support ICT companies. They will host events which are of no interest, but you can network, network, network. Once that's done, finding VCs will be no problem whatsoever, as everyone in the community will know everyone else.

Oh, by the way - many people will be displeased that their information is being shared with a tracking company. At the least it looks very unprofessional. You're hosting PHP pages, bite the bullet and write the tracking code yourself.

just wait ...

[straybullets]

The Future of Internet Investing is Coming.

If I were a venture capitalist...

[afay]

... I wouldn't give you money. Would you trust someone who advocated day trading to manage your investment well? I find it interesting that you quote Warren Buffet in your theory section when essentially you are going against everything that he stood for (regarding investments).

Realize that in order to succeed you will lose - a lot. I lost $11,000 when I started out, but I think of that money as an education. Also, do not even attempt to day trade with less then $40,000 as you will need Day Trading Buying power. PAPER TRADE.

How much did you end up making? If you did/are doing well, why are you changing professions (trader to dotcomer)? If not, why would I trust my money with you? (especially since you're losing your money in such a foolish manner--day trading)

wow, this is too easy

[mike_sucks]

1 - Ask Slashdot
2 - ...
3 - Profit!

Maybe there's a reason why they're scared.

[rjh]

Like, for instance, you're talking about a financial-securities website. If I were Joe Venture Capitalist and you came to me with a financial-securities idea, here are the questions I'd ask you before I'd even look at your business plan. Don't have good answers? Bye. Want your business plan back?

• Who's representing you? Don't have legal counsel lined up? You're opening a securities firm and you don't have a securities lawyer hired? Buhbye.
• Who among your executives is an SEC-licensed broker or agent? Nobody? Buhbye.
• From where did you receive your MBA? Wait, you're trying to run a securities firm and you don't have an MBA in an executive position? Oh, right, right, you have "extensive trading experience". Right. Just like every other daytrader who lost his shirt. No MBA, no investment. Buhbye.
• What services are you offering which nobody else offers? You aren't offering unique services? Buhbye.

Those questions aren't nice, but those are questions which will be asked straightoff, and if you don't have good answers for them you won't even get your foot in the door.

Hahaha.

[Gannoc]

"I made a website, where's my fucking money???"

This is a joke, right?

[DorianGre]

No real plan. No unique concept. No market differentiation. No pressing need being met. No users clamoring for you to open. No revenue streams. No team to make it happen. No real business background. No exit strategy.

If I were a VC I would bill you for wasting my time. There are plenty of VCs out there dying to invest their money as it has a shelf life that is coming due, but no one is stepping up with a good idea. And yours is not a good idea. A good idea had a $5-20 Billion market. A good idea can capture at least 5% of that market. A good idea fills a void in the market. A good idea has high switching costs for the end user, is hard to duplicate, is expensive to get into, has large margins, has the ability to block competitors through things like patents, leverages an already installed base, and makes you wet your pants it is so good. If you don't believe in your idea to invest your own money, money you may not have, put together a team, do the research, etc. - then why would a VC invest?

I, for one, can't believe this got posted. Oh, wait, yes I can. Perhaps my next submission will be an Ask Slashdot: "How much will you pay for this turd."

Forget the MBA....

[hughk]

MBAs can scare off VCs these days - you want relevant qualifications - this means trading or analysis. This actually goes with the SEC ticket point which I agree with. MBA expertise tends to be organised more around larger companies rather than startups. MBAs are too expensive for what they bring to have on the staff, however they may be fine to use on an advisory basis. I have heard a lot about business plans, 100 pages of BS is outdone by a few pages of relevant information, so you don't even need the MBA for that.

As for the something different, I'm hundred per cent behind you on that one. If you don't have a product differentiator, you are dead - there is only so much market and somebody bigger always has economies of scale.