A VC in Vacationland

Psst…want to avoid getting hosed by my fellow VC’s?  try Venture Hacks.

Psst again…want to check out if your potential investors are nice guys?  The Funded.com is the web site for you.

For years, the angel and venture capital communities operated as their own club, with a firm set of rules that started with the most important one–don’t tell outsiders how we do business!  This worked for a long time as few people broke ranks.  Those that did were labeled malcontents and ignored.

But times have changed and entrepreneurs can get all sorts of advice for free on the web, including insights on how to deal with VC’s.

I have mixed feeling on many of these new sites.  For one thing, some of the advice on Venture Hacks is just bad, like never trust the lawyers. Similarly, who are the folks who are ranking the VC firms on the funded? The funded, or the unfunded?

These are beta sites for the most part and time will tell if they turn out to be useful tools for the entrepreneur.

One site that does show promise is vator.tv. Although Bambi Francisco, former Internet commentator and Blogger on DJ’s MarketWatch, resigned in disgrace over her new company–due to potential conflict of interest with her reporting duties, the site is a great improvement over having to read business plan PowerPoint attachments to an email or attending a webex meeting. Entrepreneurs and venture capitalists can post videos on-site, either describing their start up or letting entrepreneurs know what vc’s are thinking/investing in.

In the interim, my best advice is to find someone you can trust who has done what you want to do already and use them to as a mentor.  They can direct you to the right capital, legal, PR, etc. resources you will need to get going. Don’t try to do it at home on the web.  You will get hosed.

Instead, spend your time networking to find some good people with the skills to help you do what you need to do.  We may be a web-enabled society now, but don’t think that Second Life is equivalent to your first life, and get out and meet the right people.

But beware of free advice.  Reputable mentors will want a piece of your business for helping you. That’s fine and acceptable.  But run away from guys who want cash or "finder’s fees" for bringing investors to your door.  They rarely do and if they do the investors will probably want your first born as collateral.