Voice of the Restaurant Industry
While preparing for my Keynote next Tuesday at #FSMU, I almost want to change the title to "Stress Test, Surviving Silicon Valley". Startups are hard enough without all the strange stuff Silicon Valley tosses at you. I presented to a white-shoe venture fund a couple of weeks ago. They’ve invested in several social media companies and loved what we are doing here at FohBoh. They loved our business model, how we’ve evolved a social media insights and web analytics company, our products and services we offer, our strategy, the communities we’ve built and overall direction. What they didn't like was our domain expertise. Sorry, but we have a lot of Foodservice domain experience. Silly me thought that was valuable, since we are a Foodservice social media company, and all? I am never amazed at what they’ll hurl at you.
NYC is way different than Sandhill Road and it shows. I'll talk a little about that next Tuesday as well. Simply, it falls into two categories: apps versus businesses, digital media versus social networking and attitude. It's really interesting how venture finance works. My background is private equity and VC's probably don’t like the fact that they are really just an asset class of private equity. It seems like just by saying that reduces their value and puts them on the defensive. But, truth be told, there can be a lot of value to having a venture capital investor, potentially. As long as they remember that they are not entrepreneurs. Why? Most VC's suck at being entrepreneurs and most don’t have experience actually starting a company unless they became a VC after the fact. Most do bring significant experience in business because they are in the game. Being on boards, participating in early-stage business matters, corporate development, access to resources (like accessing LinkedIn or even FohBoh) and may also be active in strategic planning. These all have relevance and you pay for this value add. Finding a VC match takes effort and an enormous amount of time. Basically running a start up and raising capital at the same time is an oxymoron. One will suffer. And, you have time against you.
Maybe this was just a tough few weeks. Summer is coming to a close; kids back at school, Labor Day and lazy days and OMG, pumpkins at Walgreens! Really? Ok, I digress. Let me get out my corporate finance calendar. Private equity shuts down between November 15th and January 15th. Interestingly, they also shut down in August. So, if you are to properly finance your company between now and then (January 2011) you really have just 57 days from #FSMU. Or, wait until March. This is the Silicon Valley Stress Test that requires tenacity, temerity and mental toughness to win.