The start of the New Year brings resolutions and to-do lists ranging from personal fitness to career changes. In the investment and start-up arena, much focus has been placed on top trends, predictions and which companies will IPO in 2012. To veer in a different direction, I feel it equally important to cite an investor "UnList" for the coming year. The UnList is a suggested guide for investors on what not to focus on in 2012 when searching for the next groundbreaking technology to invest in.
1. Don't play games. As a serial entrepreneur once mentioned to me, "a quick no is preferable to a slow maybe." Investors who either say they'll respond and don't or just never make up their mind while requesting additional material from entrepreneurs are doing a disservice to the start-up community. To quote Mike Cassidy of Google, "Speed is the Ultimate Start-Up Weapon." Mike was mostly addressing the entrepreneurs when he addressed our audience in Istanbul this past November but his comments on acting and responding expeditiously are just as relevant to investors. Decide within two weeks if you're moving forward and communicate with the entrepreneur if it's a go or no go.
2. Don't be hasty. This does not contradict No. 1. Rather, when reviewing the initial executive summary, if something catches your eye but you're not sure -- why not invest in a six-minute phone call? In our BootCamp events, we work with entrepreneurs to design concise, focused presentations in six minutes, which is a sufficient amount of time to gauge initial interest. That could make the difference in the final determination. Bessemer's "anti portfolio" has often been cited in the VC industry -- where six minutes could have made the fund into a believer of Google. The conversation was passed, the opportunity lost, and the rest is history. It's worthwhile for investors all across the spectrum -- angels, strategic and venture capitalists -- to reconsider the value of six minutes at the start of this year.
3. Don't just say no. You'll never know when that start-up will surprise you and you'll want to join the next round of capital. Provide some rational to your thinking -- it goes a long way in breeding good faith. Spend a few minutes to give a brief explanation on why you think the product, business model or team doesn't suit your investment strategy. If you can refer them to an industry player, potential adviser or customer -- why not?
4. Don't be afraid. Take a chance. The dichotomy of how venture capitalists are often risk averse has been lamented often by entrepreneurs. This overly cautious state sometimes leads more nimble, non-VC players to jump in where VC's fear to tread. It's often ironic that venture capitalists, whose very name infers risk, are often risk averse and prefer to see what their colleagues are focusing on. Makes it hard to identify the next game-changing technology when one is in "follow" rather than "lead" mode. Innovation is the engine that spurs economic growth worldwide. Make 2012 the year to rethink and consider positioning one partner as the "risk" partner; the one to advocate and take that calculated risk when the metrics are aligned.
5. Don't rule out intermediaries. Especially for non-American start-ups, many founders are primarily tech oriented. In countries such as Israel where great technology often comes from creative technology transfer -- whether from the academia or the military -- extraordinary and talented entrepreneurs know how to build their product but often need help navigating the capital raising and business development labyrinth. The need is even more apparent in emerging markets where there is a limited pool of both experienced entrepreneurs and available venture capital.
There is a reason why Y Combinator, TechStars, SeedCamp, Start-up Lab and others have gained traction for the pre-seed round. Incubators and accelerators have provided a tremendous boost to the start-up ecosystem, but the arena also requires another medium to step in for those accelerator graduates -- to help them scale, go global, gain the critical traction. They require help to clarify their business proposition, evaluate their value, identify key partners and of understand the language of investors from multiple geographies worldwide. That's where companies, such as BootCamp Ventures, tries to step in to help promising tech companies in Israel, Turkey and other emerging markets scale and reach global markets.
Esther Loewy is a founding partner at BootCamp Ventures, www.bootcampventures, a global innovation platform for aligning game changing technology start-ups with international investors, partners and customers. BootCamp Ventures provides professional support to early-stage, high-potential, high growth and technology oriented companies in every step of the process from business strategy to financing to help companies accelerate andand compete in the global marketplace. Their 18th global innovation summit will take place in Israel March 27-28, 2012.