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2x startup Founder & CEO who has gone to the Dark Side of VC. His first company, BuildOnline was sold in 2005, his second, Koral was acquired by Salesforce.com and became known as Salesforce Content, while Mark served as VP Product Management. In 2007 Mark joined GRP Partners in 2007 as a General Partner.  He focuses on early-stage technology companies, usually looking at Series A investment, and blogs at the aptly titled Both Sides of the Table.

9 responses to “Do You Really Even Need VC?”

  1. One VC in Italy? No, two. | Grow VC - Venture Capital 2.0

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  2. Basil Peters

    Excellent article. These days, through syndication, I am seeing companies raise $5 to 10 million from angel investors. This positions them well for an early exit. I just published a book on this strategy http://Early-Exits.com.

  3. Mark Suster

    Basil, sorry to say but I totally disagree with your comments. Angel rounds of $5-10 million are a thing of the past. Angels are taking their money and shoring up their losses in real estate and the stock market. They are not doubling down on large tech investments. I have the feeling that your book may have been written prior to Oct 08.

  4. Basil Peters

    Mark – thanks for the push back. My book is actually only a couple of months old. You are correct that angels, like every other type of investor, have been more cautious recently. That said, the trend toward larger angel rounds is a longer term trend that I think will continue to build momentum through at least a couple of market cycles. It’s driven in part by the boomer demographics and technology. Let’s give it a few more years and then see if we agree.

  5. Zoli Erdos

    Basil,

    I wonder if it’s simply larger angel rounds, or the combined result of several other trends:

    – Many startups, especially in software skip the level that used to be angel round, they get further away to having a product on their own dime

    – A lot of VC’s lowered the $ level of their initial investment.

    So in the end you see deals in the $0.5-$2M range that could be “angel” or “VC” or even a mix.

    My 2 cents – not enough to invest:-)

  6. Mark Essel

    Interesting perspective Mark. Thanks for sharing some well thought out plans for business growth. I’m envisioning another type of venture model, one where many small investors can crowd source their funding and select tractable business plans, and then help match them with effective leadership.

  7. Crowd Sourced Funding, Pitching, and Entrepreneurs

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  8. Good News for Start-ups – Venture Capital Investments on the Upswing! | Uncategorized

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  9. Randall Lucas

    Mark, thanks for the linkback in your update. You’ve got a lot of good points — I think your steps 1-5 are widely applicable and appropriate. But I also think you paint VCs with too wide a brush — a lot of folks invest funds in the $50-200 M range, where every company doesn’t have to IPO with a billion dollar market cap in order to move the dial.

    Also, re: “optionality” — I think entrepreneurs who have at least a /potentially/ vast market opportunity should err on the side of being early in taking first meetings with VCs. Two key reasons here: 1. it makes it a smoother process for both sides to decide they want to work together later if things DO get into a “rocket fuel” scenario, and 2. a good VC should be adding at least some value to every entrepreneur he meets, thereby in theory increasing your chances of needing that “rocket fuel.” So, agreed — preserve options, and one good way to do that is starting that VC conversation and building trust early.