note: the author applies Gilbert is Departing to provide the service of online funeral company founder and manager.
silicon valley has a secret, but all the people know the secret in silicon valley, even outside the valley there are many people who knew the secret, but these people don’t think the secret is a big problem. I will reveal this secret and it’s a problem for you, and provide a will forever change the way of venture investment solutions.
a few days ago Brian Chesky published an article on the Medium short and interesting article, title is called “seven times refused to”, is described in this short article shortly before the reality in the valuation of $1.5 million on a target of $150000 in financing, the risk of a lot of smart investment company with all sorts of reason refused to marry him. I guess now the company must, if only because of the growing company now is worth more than $24 billion.
in the Midwest a young talented team (consist of Jen, John and Pat) is studying an important problem. They accidentally found a technical solution to solve the problem of this major, if successful, they will become a billionaire and change the world. Any scudamore and had the foresight to invest investors will be considered a saint, and would take the Gulf Stream G650 executive for its cars, from then on into the aristocracy.
the problem is that in these entrepreneurs have not engaged in venture capital, so no one came to the team. No money for the project need to engineers, salespeople, and establish the infrastructure of the project, their thoughts and ideas will be submerged. And this is not a secret in silicon valley.
Jen, John and Pat in this case has the following two options:
1. In many science and technology business incubator companies choose a request, they have a hope that through incubator company related personnel review and become one of the projects of the company. Then they will undergo a three-month training, teach them how to introduce the project to venture capitalists and investment. Participate in project is the most important part of the demo day, may get investment on that day. If not successful demo day, then the incubator will use networks, trying to will introduce startups go out again.
2. Came to the valley, they can temporarily stop the study of the project itself, into all aspects of financing mode. This mode, they need to meet with a lot of people, shake hands with them, in and out of the cafe, constantly modified pitch content, or even to change the project’s original vision to meet the demand of investors. Next after six to 18 months of continuous speech pitch, network promotion, constant correction and repeated, until they get the investment or choose to give up.
in a low sand hill road nearby office building, Jen, John and Pat the three were addressing a vc staff as a pitch. Is a vc college roommate told him about this project, and contribute to the meeting. The friendly investors found Jen, very bright, but also appreciate John’s MBA degree, so he listened attentively, but occasionally a fugue.
above these are in the process of hearing pitch, the investor may flash idea in mind.
if the investors think creative value, the project team is good, suitable project development stage, and their investment in the same direction, they may arrange the next meeting.
if all goes well, the vc investment program which goes like this:
? Investors view the recommended resources and materials of the project, for screening in advance.
? Investors through the meeting with the team, to hear speech pitch and screening.
? Investors to evaluate investment opportunities.
? Investors to recall the project team, to pitch again speaking, more staff to participate in the pitch to the lecture and assessment of investment opportunities.
? Investors from risk investment agreement, conduct due diligence.
? Investors in the investment agreement signed face to face, and by the relevant personnel to give each other money by t/t.
in an idyllic country club, after a few drinks, many retired middle-aged businessmen gathered in a room to listen to a speech pitch. This is a well organized angel investment team.
here show angel investment team for project investment and obtain the same procedure, may be interrupted by a strange phone display process, but also is likely to be an angel investor to recommend, you then need to after dinner of pitch and due diligence, so generally rounds of screening, finally get a cheque are written on investment amount.
a friendly middle-aged somewhere at lunch time again through Jen, John and Pat three speeches of financing. The project is a friend recommended to come over, he liked the idea, meet in a few times after that he put the project financing speech brought a few friends, together to estimate the early yield, early and do some due diligence. He made up his mind to continue to follow up the project, and use it as an investment. This is Angel List pattern of joint investment.
finance in all these different scenarios, one thing is the same: that is people.
in fact, in any case the financing project by interpersonal relationships of switching, and then find the right investors and valued. These people must be sharp and focused, proficient in various fields, to have a clear understanding of the current business ecosystem and to weigh and evaluate their own hands. To pitch the these people to put their best performance of the speech to show on the pitch, and establish a sociable, delightful speaker image, in order to win other people’s investment.
this is the secret of silicon valley. Although some claim “software is beginning to dominate the world”, in fact venture investment still like 20 years ago in relationship and location as the main farmar. In silicon valley, we hope that all things are automatic, intelligent, efficient and valuable, but has not changed startup investment program. Whether vc or incubator, both traditional angel investment funds and online angel fund, ability to obtain investment small depends on your creativity and ideas, while most depend on your contacts and your display: this is the problem.
that how to solve? The answer is an early investment in automation.
automation investment is not a new thing. Black box ofthe long before they have started to use in the market and succeed. If you haven’t read “mysterious angel investors $13 billion” this article, you should have a good read. When the black box of law for the first time to ask, some people say “computer is impossible to finish the job”, but the fact proved them wrong. Sentiment analysis in the computer can be based on the mood and feeling of human existing and market interaction.
in the same way, if you think that the computer can’t complete the review of the raw data, early evaluation and the risk of investment, then you are wrong. The computer can not only finish the work, and I believe they will do better.
because machines available mass data has been to the early investment of computerized laid a good foundation:
? In the market evaluation on computer do better than people.
? On the business idea of assessment computer do better than people.
? In the evaluation of team dynamics on computer do better than people.
? On a fair and just principle, some do it better than computer.
? The computer will not worry about social capital.
? The computer wouldn’t worry about the next investment.
silicon valley has a secret, the secret is the silicon valley is still a “people-oriented” (human relations oriented) system of assets. It’s ironic that most of the venture funds are investment in automation, and reduce the need for human. Thankfully, fortunately, their investment is not to make themselves out of work.
risk investment will one day become a comprehensive automation system, the discovery of start-ups, review and investment was done by machines. Some venture capitalists can realize automation of inevitability and investment. Can do that investors will buy gulfstream jets for its cars, has been as a saint. In the world, the liberal party will vote for algorithm rather than people, until the liberals are replaced by machines.
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