Like countless others, I left the relative tranquility of an established brick-and-mortar enterprise to join a dotcom start-up two years ago. The opportunity to launch my own Web site – in the spa industry, no less – was a tempting elixir, too delicious to pass up.
At the time it was the fashionable thing to do, to leave a perfectly fine business for the gold-rush opportunity that was the Internet. In those heady, albeit brief, times, there seemed little downside. Didn’t everyone become a millionaire?
As it turned out, there was a downside. The venture I joined didn’t turn me into the next Mark Cuban. But then, the upside was the experience, which I hope to leverage in my new position as Editor-in-Chief of Venture Economics, publisher of Venture Capital Journal, The IPO Reporter, Buyouts and Private Equity Week.
Having worked in the dotcom genre for 19 months gave me insight into the minds of greed-driven entrepreneurs and those who truly wanted to grow an enduring business. I also saw up-close and personal VCs and ever-changing exit strategies.
What struck me throughout my 19 months was how little the outside investors were kept abreast of the company’s doings. Sometimes they called the office seeking information, but if they weren’t proactive, they got nothing.
Being a VC reminded me of being a home-run hitter. You’re going to strike out a lot more times than you’re going to hit a home run, but it’s the game-winning home run that you’ll be remembered for. Just as Benchmark Capital is remembered more for eBay than the many failed – and subsequently forgotten ventures.
Years from now the dotcom crash-and-burn will probably be viewed as the stupidest period of investing in the last 100 years. But at least it didn’t last long and it forced VCs to return to the core principles that made them successful and helped usher out the imposter entrepreneurs who were in the dotcom world to make a quick million.
Unfortunately, for the quality entrepreneurs still toiling in dotcom business today and seeking additional capital, they are paying the price for the previous generation. But that’s business.
I will view VCJ with a fresh perspective now that I’ve lived through the experience of being with a VC-backed startup. I like being on the other side.