• The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success
  1. Join 50,000+ entrepreneurs
    who are kicking butt and
    winning their dream life.

    Unscripted™ Entrepreneurship:
    A Business That Pays More Than Money, It Pays Time.

    "Fastlane" is an entrepreneur discussion forum based on The Unscripted Entrepreneurial Framework (TUNEF) outlined in the two best-selling books by MJ DeMarco (The Millionaire Fastlane and UNSCRIPTED™). From multimillionaires to digital nomads, the forum features real entrepreneurs creating real businesses.

    Download (Unscripted) Download (Millionaire Fastlane)  Register
    Registering for the forum removes this block!

Would You Give This Kid $500,000?

Discussion in 'Lessons from Success/Failure' started by Analyzer, Dec 18, 2007.

  1. Analyzer
    Offline

    Analyzer Contributor

    Messages:
    245
    Likes Received:
    71
    Joined:
    Aug 31, 2007
    Location:
    Portugal, Europe
    Rep Bank:
    $210
    Not yet fastlane but getting there quickly.

    Original article at: http://www.portfolio.com/executives/features/2007/11/19/Jared-Kim-Profile/

    :fastlane:
     
  2. JScott
    Online

    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

    Messages:
    3,856
    Likes Received:
    6,422
    Joined:
    Aug 24, 2007
    Rep Bank:
    $46,437
    Much like the recent thread about ridiculous housing prices in California, there is also a ridiculous attitude towards VC funding. To a lot of people, getting $500K to start a web company seems like a lot -- an amount that someone would have to jump through hoops to get. But in reality, if you know the right people (or more importantly, if they know you), raising $500K can be done in a matter of hours or days.

    I was having lunch with a VC friend of mine last year, and threw out a business idea that I was considering. He asked me how much it would take to get a idea up and running and get some partnership agreements, and when I mentioned it would cost about $250K, he practically begged me to allow him to fund it. I wasn't interested, and he's since found a couple guys to work on the idea and get it launched (I'll post the site once it's launched).

    While this might seem crazy, it's not uncommon to start a business around here (Silicon Valley) for $200K and then sell it for a couple million a year or two later (I personally know a bunch of people who have done it). And to be honest, VCs are generally upset when this happens; they'd rather the companies "let it ride," and take a shoot at being the next Google or VMWare, even at the risk of losing out on the million or two.

    The Valley is a crazy, crazy place... :)
     
  3. dhuang
    Offline

    dhuang New Contributor

    Messages:
    75
    Likes Received:
    6
    Joined:
    Aug 16, 2007
    Rep Bank:
    $42
    I agree. The valley is a pretty crazy place. According to Techcrunch, VCs are going to be investing more and more into the internet and media in 2008. So perfect timing for Jared.

    "Wegame," I've checked out the site - seems pretty simple, and looks good.

    I used to be in the competitive gaming scene, so I know what it's all about. A Youtube-only version would be fantastic. I have some ideas in my head on how to make it tailored to gamers, but we'll see how it goes.

    So you're telling me he's the same age as me, but already has two Dell Ultrasharp 2407WFPs!? I have trouble acquiring one, dang, gotta get to work!
     
  4. biophase
    Online

    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

    Messages:
    6,322
    Likes Received:
    27,978
    Joined:
    Jul 25, 2007
    Location:
    Scottsdale, AZ
    Rep Bank:
    $189,480
    My friend just texted me today. He got his funding. $16M. His company is in Silicon Valley.. of course. :eusa_clap:
     
  5. Z5 FILMS
    Offline

    Z5 FILMS Contributor

    Messages:
    462
    Likes Received:
    75
    Joined:
    Aug 13, 2007
    Location:
    The Woodlands, TX
    Rep Bank:
    $251
    Is it a .com?
     
  6. AndrewG
    Offline

    AndrewG Contributor

    Messages:
    316
    Likes Received:
    30
    Joined:
    Nov 3, 2007
    Rep Bank:
    $56
    It wouldn't happen to be Playfirst would it? They just got $16.5 million.
     
  7. biophase
    Online

    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

    Messages:
    6,322
    Likes Received:
    27,978
    Joined:
    Jul 25, 2007
    Location:
    Scottsdale, AZ
    Rep Bank:
    $189,480
  8. biophase
    Online

    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

    Messages:
    6,322
    Likes Received:
    27,978
    Joined:
    Jul 25, 2007
    Location:
    Scottsdale, AZ
    Rep Bank:
    $189,480
    When asked about the 6th grader getting 6.5M in VC money, his father tells the real story below.

    http://venturebeat.com/2007/09/19/playspan-run-12-year-old-ceo-gets-65m-in-venture-capital/

    Arjun’s father, Karl, responds: “Arjun does not work full-time on PlaySpan business. As a gamer he has a great deal of input in PlaySpan’s product and technology, but his primary focus is on his academics and his mom doesn’t want much media attention for him…. I am the Co-Founder and CEO and I run the company”
     
  9. WheelsRCool
    Offline

    WheelsRCool Contributor

    Messages:
    447
    Likes Received:
    51
    Joined:
    Aug 12, 2007
    Rep Bank:
    $61
    Does that really happen a lot? I ask because I read it was that mindset among so many people that drove the dot-com bubble, producing all sorts of companies that were created without a business plan even, because of the stories of an entrepreneur who would start a company, raise capital, and then cash out a multimillionaire a year and a half later, thus becoming an "Instapreneur."

    JScott, are apartments cheap in Silicon Valley?

    Also, is venture capital funding more easy to obtain in Silicon Valley, or can a good entrepreneur also have a good chance of getting it in a high-tech place like Austin, Texas?
     
  10. JScott
    Online

    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

    Messages:
    3,856
    Likes Received:
    6,422
    Joined:
    Aug 24, 2007
    Rep Bank:
    $46,437
    Suffice it to say, I believe we're in the middle of another tech/web bubble...maybe not as big as the first, or as crazy, but based on the similarities between what I saw back in 1998-2001 and what I see now, the bubble is back...

    Nope. Not unless you're willing to go a couple hours north, east, or south. I'm actually investing on the east coast -- far, far away from here... :)

    I've only worked with venture capitalists on the east coast (Washington, DC) and the Bay Area, so I can't comment on other places, but there's a huge difference between the DC and here. The VCs in the Bay Area have a lot more money (they are the ones that benefited from the last bubble), are willing to take much larger risks (on web companies, at least), and are much more open-minded about investing in
    "twenty-three year-old kids with a great idea and a computer".

    In my experience, VCs outside the Bay Area are much more focused on more traditional business models (as opposed to "Web 2.0" businesses), and in those businesses (all non-web businesses) the bar is set much higher in terms of having a strong management team, strong sales team, etc. So, VCs outside the Bay Area tend to be much more picky about WHO they invest in, not just WHAT they invest in.

    Keep in mind that Bay Area VCs will fund businesses in other areas, assuming the business model supports it (in other words, assuming they believe you can hire the people you need where you happen to be). So, if you're looking for funding outside the Bay Area, don't necessarily assume you can't get Bay Area funding.
     
  11. WheelsRCool
    Offline

    WheelsRCool Contributor

    Messages:
    447
    Likes Received:
    51
    Joined:
    Aug 12, 2007
    Rep Bank:
    $61
    I see, thanks for the information.

    Regarding the Bay Area VCs investing in "23 year-old kids with a great idea and a computer," I read somewhere that they actually have a saying, "Don't invest in anyone over 30," I don't know how true that is, but apparently it's because they hold the belief that only the super-young have the "youthful ignorance" to go ahead and try to create the next Google and Microsoft, whereas older people are more conservative (IMO, I think a person should be plenty cocky to take on big companies, but still have the sense to at least write a business plan so you have a solid company!).
     
  12. JScott
    Online

    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

    Messages:
    3,856
    Likes Received:
    6,422
    Joined:
    Aug 24, 2007
    Rep Bank:
    $46,437
    It's certainly true in my experience that a large percentage of the VC money in the Valley is going to the kids, but I'm not sure what the cause/effect relationship is. In other words, I don't know if it's the VCs saying, "I'm not going to invest in a 40 year old" or if it's the 40 year olds saying, "I'm too old to spend 16 hours a day starting an Internet company."

    It's probably a combination of both... :)

    From what I've seen, one big difference between the last bubble and this one is that VCs are starting to get much more serious about having a strong management team in the companies they're funding. So, while they're still handing out millions to kids, they're forcing those kids to bring in adult supervision (strong management teams).

    For this reason alone, I think the crop of Web 2.0 companies today will likely have more staying power than their 1999 counterparts...
     
  13. pitboss
    Offline

    pitboss New Contributor

    Messages:
    25
    Likes Received:
    1
    Joined:
    Jan 25, 2008
    Rep Bank:
    $34
    Biophase, That is Great! I just surfed over to your Blog. Good Job!
     
  14. dhuang
    Offline

    dhuang New Contributor

    Messages:
    75
    Likes Received:
    6
    Joined:
    Aug 16, 2007
    Rep Bank:
    $42
    Not to beat a dead horse...

    But Jared Kim just scored $3 Million in venture funding.

    So I guess people are willing to invest in "us kids." :)
     

Join 1000s of entrepreneurs who are rewriting life's script and winning financial freedom.

---- ----

You must be a member to join the conversation.

Create Account

Join the community fast and easy!

REGISTER

Log In

Already have an account? Login here.

LOG IN

Share This Page