Two of the biggest problems I see in Silicon Valley firms: a lot of cronyism – they fund who they know/ stanford grads ;) and; and getting ideas in their head that they refuse to shake.

Now that is not intended to be disparaging in saying that VCs don’t a) bring terrific business value to the project (because often they do) or b) don’t know what they’re talking about (quite often they know a lot about a space) but it’s rare to have a perfect expert match-up in the field. Sometimes they’ve just been out of the game a while and sometimes they don’t really know the area specifically.

The flip side thus says that VCs bring levels of reach (market, peer, research, experience) that augments the current team’s, and business savvy and experience to help steer around potential landmines before the young company implodes on them.

But still too many times I hear people talking about the objections placed in front of them where one investor gets a notion into his/her head and doesn’t seem willing to look beyond that. When they do that – it’d be nice if they’d just say so and cut that company loose instead of giving them false hope they might get funded if the investor can be convinced. I see a lot of wasted time by companies spent in this murky area – time they might be better off running and improving their companies.

Thanks for the comment.

See my blog for numerous other posts about the venture fundraising process (http://getventure.typepad.com).

I have not written a post directly addressing the ‘murky area’ issue, but have added it to my list.

One post that you may find relevant pertains to the time constraints that impact a VC’s ability to evaluate your opportunity. http://getventure.typepad.com/markpeterdavis/2007/10/what-to-expect-.html

Best,
Mark