Blog Roundup: Discussion of TechCrunch post on the decline in VC returns

TechCrunch Blog Post: Ten-Year Venture Capital Returns Continue To Slide

(Source: Cambridge Associates LLC via TechCrunch; The crude annotations are mine.)

Ouch.

There are lots of problems with this 8.4% 10-year rolling average return for venture capitalists in the US.

The big one, of course, is that when VC returns head into the 8% range, institutional investors who might otherwise plow an obligatory 1% into VC firms to cover their “alternative” category, start looking for less risky investments with similar return profiles.

And if those institutional investors start to go away, you end up with smaller VC funds and a big gap develops in the middle of your investment cycle, as it did  from 2001 to 2003 – between the seed investors involved in early rounds and the larger, later-stage VCs, private equity funds and strategic industry investors who might participate in later rounds.

Of course, this should be a temporary problem: This is a rolling average and low returns can’t last for much longer, can they?

Or can they? (more…)

Top 10 Unspoken Investor Questions Redux: Video

Here is a quick 15 minute video presentation of the Top 10 Unspoken Investor Questions presentation I made to the OpenBeta PitchCamp event:

Gale bought Questia Media last month… But why? Interesting analysis from InfoToday

Last month, Gale, a division of Cengage Learning, bought Questia Media, the company I co-founded in 1998.

But why did they buy it? This article from Information Today seems to analyze it pretty well:

Gale Reaches for More End Users With Questia Acquisition

A salient point from the article:

Barnes [Executive VP of Gale] says that HighBeam is doing very well, and with Questia, the services will reach some 30 million visitors per month. In addition to the synergies of HighBeam and Encyclopedia.com with Questia, Gale will look to integrate Questia with its AccessMyLibrary service (www.accessmylibrary.com), which connects users through web services to their local libraries for access to more than 30 million articles from premium sources. In December, Gale announced a free AccessMyLibrary mobile application for the iPhone.

Product Review: Xobni Add-in for Outlook

It isn’t difficult to define the most useful aspect of the Xobni add-in for Outlook for me: It automatically puts faces with e-mails, instantly, for people I’ve met, people I’ve never met – and, crucially – for people I’ve met just a few times or a long time ago.

For me, that is amazing. Even if I don’t remember who the author is, I’m instantly reminded with a quick glance at the Xobni pane, which sits on the right side of the typical Outlook layout.

How does it do that trick with the photos?

Simple: It checks social networks – FaceBook, LinkedIn, Twitter and many more – for their accounts based on their e-mail address and name, and can log into my accounts and allow me to instantly connect, friend and follow them, right from Outlook. You can also look up their company’s profile in Hoover’s.

This is social networking for the way we really work.

(more…)

A good entrepreneurial CEO will automatically report on profitability

A good entrepreneurial CEO will automatically report on profitability, without request or prompting.

In fact, a good CEO is focused on the numbers, despite the drama involved in starting any new company. He or she will report the numbers to the investors, other executives, and in an “open books” company, to the whole staff, without really thinking about it.

They’re going to publish how much they’ve made at any particular point in time, how much they plan to make and how they plan to do it, especially if the plan has changed. And they’ll broadcast this intention over and over, until it becomes a reality. And if it isn’t painful sometimes, it isn’t real. (more…)