Those who have never been part of the fund raising process do not know
what to expect when they go hat in hand to the venture capitalists.
Trying to figure out how to approach them and what they want to see can
be like solving a rubric’s cube. How do you get the color green to come
Even as a former investment banker, I myself have to admit that
things look different from the other side of the table when you are
asking for money instead of advising people how to raise it. (Not to
mention that my time in investment banking was spent looking at high
yield and mezzanine deals–not venture capital.) That being the case, a
book like Steve Harmon’s Zero Gravity comes in handy if you are trying
to understand the mentality of the venture capitalist. Harmon had
access to friends and acquaintances of his in the industry, such as
famed VCs John Doerr of Kleiner Perkins Caufield & Byers and Ann
Winblad of Hummer Winblad, whom he queries on such things as what they
look for in an investment. You also get to hear some short war stories
on their investments in companies such as Excite.
Harmon’s best advice is that you study the VCs as carefully–if not
more carefully–than they are going to study you. Do you know what kind
of companies each VC firm likes; do you know who their partners are?
Zero Gravity has many pithy axioms that the entrepreneur will find
helpful. Certain things about the book are annoying, though. For one
thing, Harmon plugs his web site so often, you might think that you
were viewing a particularly annoying pop up ad on the Internet. The
book also has a lot of charts and tables that honestly are more filler
than anything else, especially since a lot of the same information is
available on the Internet for free. Still, the book is a quick read and
probably one of the more accessible books on venture capital on which
an entrepreneur can get his hands.
This review first appeared on financeprofessional.com (now financeprofessional.org).