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The backers' view -- what it really takes to run a Web start-up

You've earned an M.B.A., or the equivalent in real-world experience. For your next daring career move, you plan to do a triple gainer right into the deep end of the new economy: starting your own company.

Hey, isn't everybody? And making millions to boot? At some of the nation's top business schools, more graduates are eschewing traditional paths in management consulting, investment banking and corporate management for a shot at Internet riches. Some are even dropping out, fearful their opportunity will pass in a fast-moving market.Do you have what it takes to stay afloat in this whirlpool? Ask the companies that fund these projects. Venture capitalists are the de facto executive-recruitment arm of the new economy. "It's about 50 percent of what I do," says Andrew Weissman, a senior vice president at Dawntreader LP, a New York venture firm.

To have a chance at success, venture capitalists say, Internet entrepreneurs need a clear, long-term vision of the market niche they're pursuing, and a short-term willingness to revise that vision on a moment's notice.

They must be high in self-confidence, but low enough in ego to surround themselves with high-powered talent and even to step aside, if it's in the company's best interest. And they must be what the venture capitalists call "people magnets," who can attract critically needed talent in a tight market.

Another key trait: agility. That's also linked to ego. No matter how good the idea or how much research they've done, entrepreneurs can't become too enamored of their business plan, which, in the Internet world, can change at any moment. "The business plan is a living, breathing document that's going to change," Mr. Weissman says. "That's tough to accept for a lot of people."

Mitch Mumma, general partner of Intersouth Partners, a venture-capital firm in Research Triangle Park, N.C., prefers people with a sales and marketing bent and some experience selling to similar customers, so they will "understand the sales cycle and the decision-making process."

Internet companies such as Yahoo! and succeeded by developing brand names, not innovative technology, Mr. Mumma says. "Forging strategic partnerships, creating a revenue model, these are all sales and marketing skills," he concludes.

He also checks their egos by asking if they want to be president for life. "If the answer is unequivocally yes, we're probably not going to do the deal," he says.

Does that mean he would have passed on Microsoft? "I guess I would have been scared of Bill Gates," he confesses.

But Mr. Gates is an exception. "Our experience is, the person who starts the company isn't the one who ends up leading it," Mr. Mumma says.

That doesn't mean founders should be detached. Peter Ziebelman, a partner in San Francisco's 21st Century Internet Investment Partners, says, "We're looking for the guy who is waking up at night thinking about his company," he says.

The firm backed a 24-year-old looking to sell textbooks to college students online, who said he wanted to learn how to run the business, rather than let someone else take over. Mr. Ziebelman felt he had the right personality and attitude to do that.

"Our assessment is, he's a competitor," he says. One indication: the entrepreneur's history as a competitive bike racer.

Nobody wants a control freak. Backers want leaders who will surround themselves with qualified people and then let them do their jobs. "Some entrepreneurs aren't willing to build a team of people around them where everyone is better than the entrepreneur at a given thing," Mr. Mumma says.

Nearly all the start-ups backed by these venture capitalists had to show their agility by altering course in midstream. Vicinity, a 21st Century-backed company, thought customers would pay for maps and driving directions online. Now, Mr. Ziebelman says, it provides its map service to Internet portal providers and splits advertising revenue.

Another company the firm backed, Avantgo, wanted to sell software to transfer corporate Web data to hand-held devices. But its best customers, media companies, didn't want to mess with the software -- they wanted the company to provide the service instead. "They had to build an entirely new business," Mr. Ziebelman says.

Beyond that, the entrepreneur must be capable of attracting the best technical people. That was one of the traits that impressed Mr. Mumma when he first met Chris Evans at an entrepreneurial conference.

Mr. Evans, who proposed Accipiter, an Internet advertising firm that was eventually sold for what Mr. Mumma jokingly terms an "unreasonable amount of money," needed experienced people who had built industrial-strength software.

"He knew where they were and they knew him," says Mr. Mumma. Those connections were invaluable in a market marked by talent shortages and heavy competition.

Mr. Ziebelman says he looks for "accelerators" -- skills that help the entrepreneur get a product or service out at warp speed for the Internet market.

"Are they a people magnet that can attract top people?" he asks. "Are they familiar enough with the technology so they can be up and running quickly? And do they have the marketing prowess so they can know where the daylight is in the market?"