Man's Search for Meaning and The Current Popular Practice of Blogging

Sometimes I am embarrassed to refer to my blog. Many times it seems an act of hubris to suggest that one's insights and perspective are grand enough to warrant public interest. My judgment is that blogging is rapidly becoming a cheap cliche'.

In my search for truth, I began to investigate other VC blogs. I wanted to know what they [others like me] wrote about...and how. I was doing this to calibrate my self-opinion. I found sites that I liked and those I didn't. For those I liked, I sent the authors emails describing what I liked and why - I wanted to acknowledge the human being. I sent about seven such emails.

Interestingly...I heard back from only one blog author among the seven sites I visited - ONLY ONE. It made me start to wonder...why are people doing this...why I am doing this? It is a fair assumption (I think) that authors are doing this for public consumption and that somewhere in there...is a need on their part for feedback and acknowledgment - as opposed to divine world betterment. The Internet is, in fact, the most public medium ever created and therefore public consumption is implicit. I think VCs are particularly vulnerable to the need for acknowledgment as their entire world is about testing the theory, testing the theory, testing the theory. In addition, they have to wait years to see if their investment theories translate into investment successes.

If a peer's perspective judgmentally and expressly is supportive of the authoring VC's theories...it seems that some type of further human exchange would develop between the proud father of a new theory and his admirers. Get two passionate hobbyists in a room talking about their common interests and you can't shut them up.....but not here...why?

We live in a world of diminished individualism. Among the insecure human race this trend is harmful...individualism is a mechanism for acknowledgment which shouldn't be stifled. Publishing via the web should be a tonic through which in the individual raises his head above the noise and declares "I exist and look how smart I am." The problem is that the blog medium is losing its unique capabilities do to overcrowding. The noise level has been simply raised by this fast moving medium. Perhaps this is why the response rate to my emails was low. Perhaps the authors have figured this out. The once promising "blog" no longer offers the hope of recognizing individual achievement. If this is true...man can no longer find meaning through his blog........and if this is true.... then...... blogging just died.

How's Your Deal Flow?

It is typical for prospective limited partners to ask the question: How's your deal flow? It is an appropriate question. It contemplates the issue of how fast capital can be put to work and thus returned to investors. Deal flow volume is of course relevant to the question. Like other established firms...we have very substantial deal flow volume.

The older I get...the dumber I become. I am becoming less enamored of the volume of deal flow that walks through the door. If one stands in the same place long enough and says "I have money" deal flow will find the money...it will find you...trust me.

So I take deal flow volume as a given. I currently don't measure the ability to put capital to work by means of deal flow volume. I look at it differently. My ability to put capital to work is a function of the volume of people I know who can make things work. In my judgment the right question from prospective investors is: "How many people do you know that can come into early-stage land and make it work?" There are tons of good ideas. There are limited numbers of people who can "make it work."

So if one thinks about this question it seems there is a set of deeper due diligence questions to be asked by prospective fund investors:

• What is your model (Mr. VC fund raiser) for developing and maintaining a system for leadership talent?
• What is the market opportunity now for developing this system in your geography or market vertical?
• How are your going to protect it?

These questions sound remarkably like the questions that we ask prospect companies. Answers to these questions (if put to us by prospective investors) have to be supported by the broader investment thesis as well or they will not hang together.

The other day one of our portfolio companies named World Telemetry Inc was able to recruit and retain John Lee as CEO. I have known John for years. He ran Oracle's Process Group in North America and a similar division for SAP and has been through early-stage land. We previously hired one of his protege's (Trent Derr) to run another portfolio company who seems to be shooting the lights out. Simply put...John makes things work. Another VC firm for whom I have a lot of respect called me and said.."we want in since John is there."

I have never seen a slide in a VC fundraising presentation that recognizes the "system of developing and maintaining leadership talent" as THE business model...and maybe never will. But anyone who has been doing this long enough has become dumb enough to know that this IS the investment. This not only helps investors get the money to work quickly (which is the basic premise of the overall question asked in the title)...but it also makes sure that the money comes back with returns commensurate with the risk taken. Again..this may all sound obvious when put in writing but we've been doing this type of investing a long time and seen tens of VC firm presentions...and they almost never look at the world this way. So with that said.......How's your deal flow?