Suck

for 17 September 1996. Updated every TUESDAY.



	Fat venture capitalists meet money-hungry
	entrepreneurs... on the web!

	By compressing the time frame of the
	typical VC-entrepreneur dance, VC.COM
	reduces the lamb-to-slaughter cycle to
	days rather than months.

	Bringing venture capitalists and
	entrepreneurs together is not a very
	efficient process. Once a budding
	Andreessen-wannabe has developed his
	killer app and written the
	incomprehensible 80-page business plan,
	it's on to a humiliating courtship with
	the VC. First we have the obligatory
	lunch at some cheesy seafood restaurant
	on Sand Hill Road, followed by a humbling
	tour of the VC's swanky offices. Then,
	under the guise of "due diligence," the
	fax machines start whirring out term
	sheets and deal memorandums. This stalls
	the process long enough to push the
	entrepreneur to the brink of bankruptcy,
	all the while their "first-mover
	advantage" gets vaporized. The result? By
	the time ink hits paper, the entrepreneur
	is so desperate they've come out of the
	deal demotivated and demoralized, and the
	VC has a company who's missed their
	market window. Surely, if we know the
	results ahead of time, there must be a
	more efficient way to do this?

	VC.COM compresses the traditional
	high-tech funding cycle by giving venture
	capitalists and entrepreneurs a
	forms-driven template that serves as an
	intermediary for the negotiating process.
	For the entrepreneur, it's a fast and
	efficient way to find that ideal funding
	partner. For VCs, it solves the age-old
	problem of deal flow by securing a steady
	stream of new companies - all from the
	privacy of their own browsers.



	The entrepreneur logs into VC.COM,
	and types in his big idea. The patented
	"Mission Streamliner" helps the
	entrepreneur keep the idea within
	bounds, streamlining the business plan.
	The entrepreneur then types in the amount
	of financing needed and the proposed
	valuation, and the site does the rest.
	VC.COM uses proven industry ratios to
	develop a realistic funding model,
	eliminating messy negotiations between
	parties. And our new "Management
	Augmentation Matrix" lets the
	entrepreneur help pick their newly
	appointed mentors by specifying specific
	duties they need help with. A venture
	capitalist logs in ready to cut a check,
	knowing the work has been done for them.
	In the end, the company gets funded much
	more quickly, the VC gets the company
	that they want, and it's sit-back-and-
	wait-for-the-IPO time.

	Let's not kid ourselves. VCs hate risking
	a scratch on their new BMW by parking in
	SoMa. Plus they always feel so out of
	place, what with all this talk about
	computers and such. But they've got a ton
	of dough to burn through, and need a
	reliable source of new companies that
	deal in technologies they're clueless
	about. And talk about predictable plots!
	From the minute an entrepreneur's
	Converse All-Stars meet the marble floors
	of a venture capital office, we could
	script the results. VC.COM just does it
	for them. For infrastructure, a simple
	secure commerce site will suffice. The
	"Mission Streamliner" is an off-the-shelf
	business-plan template that allows the
	entrepreneur to enter only the most basic
	company information, stripping out "The
	Management Team" section. The "Management
	Augmentation Matrix" is a slick way to
	get the founder to pick their own
	replacement, since they're gonna get the
	boot anyway. Forms-based CGI scripts will
	do the math on the numbers, whittling the
	valuation to the point where the VCs own
	more of the company than the
	entrepreneur. The system adds endless
	provisions for warrants, options and
	preferred shares sure to confuse the
	entrepreneur so badly that it'll take
	their law school buddies weeks to figure
	out the deal. By then, the entrepreneur
	has given away a pretty hefty chunk of
	the company, the employee-share pool is
	down to single digits, and the VCs have
	just enough board seats to install their
	own CEO six months from close. As IPO
	time rolls around, the entrepreneur is
	little more than a figurehead who waves
	from his office as the tour of investment
	bankers goes by.

courtesy of I.P. Oh