20-minute rule

October 22, 2006

VC Valley

It’s Not Who You Know. It’s Where You Are.

In this story in the Sunday NYTimes Randall Stross a professor of business at San Jose State University tells us that behind all the happy companies with the goofy names are the vulture venture capitalists who run the show.

20-minute rule sounds like a rule dictated by a strict parent over a teenage child, the start-up company must be within a 20-minute drive of the venture firm’s offices. It’s their money and they like to see it whenever they want, but these are the same people who are selling the world on the idea that we can do anything on the Web…

Money doesn’t talk, it swears.

I remember the first Web 2.0 conference as a celebration of what had been accomplished by Amazon, eBay, Yahoo, Google and Craigslist at a time when the American economy was hurting. At the second Web 2.0 conference young companies paid to be on the launch-pad and there were mostly VC’s in the audience.

At the first Web 2.0 conference the luminaries and the bloggers mixed and mingled throughout the three days. Last year most people ducked into tiny rooms to hold private meetings.

VC’s came up to me asking what I had cooking, but I didn’t like the look in their eyes. Now when anyone asks me about funding I always explain that VC’s are like credit cards, the introductory rates look great, but the Banks always get their money.

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