The Venture Capital Aptitude Test (VCAT)

A very good and insightful post by Guy Kawasaki for those aspiring to be a VC

The Venture Capital Aptitude Test (VCAT)
http://blog.guykawasaki.com/2006/11/the_venture_cap.html

Part I: Work Background

What is your background?
Engineering (add 5 points)
Sales (add 5 points)
Management consulting (subtract 5 points)
Investment banking (subtract 5 points)
Accounting (subtract 5 points)
MBA (subtract 5 points)

The ideal venture capitalist has an engineering or a sales background. Engineering is useful because it helps you understand the technology that you’re investing in—for example, is the entrepreneur trying to defy the laws of physics? Sales is useful because every entrepreneur has to introduce a product and sell it. For the third time in this blog, let me say, “Sales fixes everything.”
The three worst backgrounds for a venture capitalist are management consulting, investment banking, and accounting. Management consulting is bad because it leads you to believe that implementation is easy and insights are hard when the opposite is true in startups. Investment banking is bad because it leads you to believe that everything can be reduced to cells on a spreadsheet and that companies should be built for Wall Street, not customers. Plus, investment bankers are oriented towards doing deals, not building companies. Accounting is bad because it leads you to believe that history not only repeats itself, it predicts the future.
Finally, there is the issue of the pertinence of an MBA to venture capital. The upside is that such a degree can provide additional tools and knowledge (such as being about to calculate that 25% of $1.6 billion is $400 million) to help you make investment decisions and to assist entrepreneurs. The downside is that earning this degree (and I have one) causes most people to develop the hollow arrogance of someone who’s never been tested. All told, the downside of an MBA outweighs the upside.

Fear: I agree with everything except the MBA stuff, naturally. ;)

Inventors hope artificial intelligence will pick stocks

Ray Kurzweil, an inventor and new hedge fund manager, is describing the future of stock-picking, and it isn't human.

"Artificial intelligence is becoming so deeply integrated into our economic ecostructure that some day computers will exceed human intelligence," Kurzweil tells a room of investors who oversee enormous pools of capital. "Machines can observe billions of market transactions to see patterns we could never see."

http://www.insidebayarea.com/ci_4714689?source=rss

Silver lining: Metal keeps clothes fresh

Very cool!

http://www.insidebayarea.com/ci_4714684?source=rss
Silver kills odor-causing bacteria; it also redistributes body heat, keeping the wearer warm in cold weather and cool in hot weather.

Web-service displaying realtime parking space availability

Every large crowded city and university should have this. Check out Santa Monica:
http://parkingspacenow.smgov.net/

I know for sure something like this would have a lot of value for Berkeley and San Francisco.

John Doerr - Startup Manual

If you could ask only one person for advice about starting a company or joining a startup, chances are you'd pick John Doerr.
http://www.fastcompany.com/online/07/082doerr.html

Vietnam - WTO and $1B from Intel

Intel may hike investment in Vietnam to $1 billion
World Trade Organization welcome's Asian country aboard
http://www.insidebayarea.com/ci_4629169?source=rss

Google… the OS for Advertising

An interesting blog that possibly touch on what Google's vision really is. I think it makes a lot of sense, and my reaction was, "Now, that's a vision!"

http://gigaom.com/2006/11/09/google-the-os-for-advertising/

If you read through all the announcements and analyses about their recent deals and initiatives, it becomes clear that a common vision unites them all. Simply put, Google is building what is essentially an operating system (”OS”) for advertising… one that will work across all media.
Just like Microsoft’s Windows (or any other OS) manages all the hardware and software resources of a computer, Google’s Ad/OS will similarly manage all the critical components of an ad campaign, regardless of media type. But instead of controlling and allocating memory, Google’s Ad/OS will allocate ad budgets… instead of prioritizing system requests, controlling input & output devices, Google’s Ad/OS will enable ad inventory buying & placement… instead of facilitating networks and managing files, Google’s Ad/OS will optimize media buying across the spectrum & manage creative placement.

Google’s Ad/OS will be used to manage and buy ads at many of the top new media publishers like MySpace, YouTube, AOL, Ask, and Google itself, of course, along with hundreds of thousands of blogs. It will also be used to buy ads in the NY Times, the Boston Globe, the Washington Post, and all sorts of local papers owned by Tribune, Gannett and McClatchy… not to mention radio stations all over the country that are owned by Clear Channel and other radio conglomerates. And if Google executes on its plan, soon all the major broadcast TV and cable networks will join in to make their ad inventory available via Google’s Ad/OS.

Visual Search

Just when you think search has been done to dead, there are more advance way of searching for stuff on the Internet, including visual search.
http://venturebeat.com/2006/11/08/likes-visual-search-very-good-for-shopping/

This should be a very useful tool for shopping nuts, and I wouldn't be surprised if they use this technology for online dating/matching site too.

Experience or Result

I could tell you that I haven't been able to blog because I have been so swamped lately but that would sound like nothing but an excuse, so I won't even say it. Having no time for something is the age old excuse that has been used to dead. But, that's not what I am blogging about.Have you ever heard of the phrase, "Experience is what you get when you are busy focusing on something else." I thought this sounded interesting and insightful, but I didn't quite get it at first. Okay, I am a slow pepper, but you know how language always have so many different meanings. And unless they give you an example, you don't really know exactly what they mean. So for example, lets take my case. For many years, I was busy trying to build my career or (off the record) cash out on a startup. ;) While busy doing that, I gained a lot of experience in chip design and domain expertise in several different industries like networking, telecom, storage, and semiconductor. Damn, this sound like it came straight out of my cover letter. =)So after I heard that quote, I came up with a slightly different version: "Result is what you get when you are busy focusing on something else." Now, your first reaction might be, "Damn, this guy is off to the deep end." or "Is he smoking something?" Well, maybe it might help if I had said, "Result on something else is what you get when you are busy focusing on this." That probably didn't help either, so let me explain with an example. Btw, I came up with this while working out at 24 hour Fitness. Okay, I may sound like I work out often and consistently, but I don't. My work out frequency can be best described as "once in a blue moon". In any case, I diverged. My example... when I do my 30min on the machine, if I listen to my iPod, watch TV (with subtitle on), or thinking about something, time just fly. I also see other people reading their magazines or books. One time I even see a guy doodling some kind of design while on the treadmill. So as they are focusing on something else, they get the result of a good work out. The insight here is that if you want to get some result and the process to get that result is hard or boring, just trick yourself into doing something to get your mind off the pain or boredom and before you know it, you have achieved your desired result. Also, a some what related quote from a guy I used to work with, "If you know you are stuck doing something, why not just try to enjoy it." As you are stuck doing something, you can either hate life or really try to enjoy it. It's just the flip of a switch in your mind. ;)

Who said money is hard to find?

From VentureBeat...

Unprecedented amount of money searching for home
http://venturebeat.com/2006/11/03/unprecedented-amount-of-money-searching-for-home/

U.S. private equity firms have raised a record $177.89 billion, according to Dow Jones VentureOne.

Private equity firms have an unprecedented amount of cash sitting in their treasure chests. Since they are typically mandated to invest it within a certain time frame, this signals that an unprecedented of money is now sloshing around looking or a home within the next year or two.
This has all kinds of complex implications, but one obvious result is that money is easier and cheaper to raise, whether for the young entrepreneur or for the developed business unit looking for help to restructure.

The previous record was 2000, which was $177.75 billion, but we’ve still got two months before the year is over — so 2006’s lead will be significant by the time were done. The total could reach $225 billion, according to VentureOne.

“Private equity,” as defined by VentureOne, includes buyout and corporate finance funds, venture capital, mezzanine funds and funds of funds.

Much of this money is being raised by firms that invest in mature or very large businesses, but venture firms are raising more money than they have in several years too.
The buyout industry has led the boom, representing $118.05 billion of the total raised so far this year, or about two-thirds of all funds, the group said. In 2000, venture capital firms were a more significant driver of that record-breaking year.