Venture Blog

You know that something is about to be over-hyped when the VCs jump on the bandwagon. A friend recently pointed me at Venture Blog. When Google bought Blogger I'm sure VCs up and down Sand Hill road were scratching their heads wondering what a blog was and trying to figure out why they didn't have one in their portfolio.

While poking fun at the venture folks is always entertaining, Venture Blog and the ones that will surely follow are wonderful, wonderful things.

When raising money for a start-up, one of the hardest problems is finding the right people in the venture community to work with. If you've done it before you'll have web of trust to tap in to. If you're doing it for the first time it is much harder to figure out who can really help you and who can only talk about helping you. Every VC you meet will claim to be able to do three things:

1. Open doors to business partners and customers
2. Recruit senior management
3. Help raise more money

I don't know if they are lying, delusional, or are merely indulging in garden variety exaggeration, but most VCs will not produce measurable results on any of these fronts. So how do you know who will deliver the goods and who will just come up with excuses about why they can't serve on the audit committee?

The best way to find out is to get your venture partner to make the introductions before closing the deal. Have the VC bring in a prospective business partner or customer as part of the due diligence process. This is a great way for the VC to learn more about your company and a great way for you to find out if the VC's rolodex is as good as he claims it is. If the CIO of GE shows up for the meeting, you've got a winner. Do the same thing with executives and other VCs your venture capitalist has worked with before. Both sides can learn a lot in this process.

The next best thing you can do is to check references. Call entrepreneurs that the VC has backed previously. Take the time to meet with folks who have served with them on company boards. Do not skip this step under any circumstances.

Now that I've seen Venture Blog, I need to add one more step to my VC due dilligence list: Read their blog.