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March 27, 2007
Tim Draper on VC Trains
DFJ's Tim Draper on trains and venture capital:Q: What is your advice for a startup looking for venture capital funding?[via SacBee]
A: Run your company. The money can help accelerate it but don't wait for the funding to get started. The best companies get their first money from customers, not VCs. An investor can tell whether an entrepreneur is exploring a theoretical business idea or dedicated to the business. To an investor, make your company look like it is a train leaving the station.
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Funny, Shefaly! And don't forget the all-important Gravy Train, which is what they all chase.
Touché!
he's right of course. although when I started our company the vc's were telling us anything but this. raise more money and get bigger quicker. we continued to operate without vc capital (or any capital) infusions thank god.
Amen! For too long the blogosphere has been praising "Web 2.0" companies that had no real customers, revenues or profits - nor any real hope of obtaining any of these.
We need to put more focus on companies that have become "real" by delivering solution via new technologies that people are willing to pay for.
Best,
George
If you want to see trains leaving the station, then please go to http://www.equityfingerprint.com/ where we have an illustration of different types of businesses based on trains. People can go for Lifestyle or Tycoon companies. To me, what is the fun of a lifestyle company? What would the entrepreneurial world be like without Google, Skype, MySpace and many bio companies who start with no idea of income and are backed by Angels and VCs?
Did he mean a British rail train (not on time most of the time so you could not pull that stunt reliably), Indian Rail train (may arrive a day late, the VC may not only miss the train but also be annoyed), CalTrain (sometimes on time, sometimes not, sample size small but statistically significant)?
If he meant a SwissBundesBahn, he may not catch it just as it is leaving. In Switzerland, time and train stop for no man (or VC).