ReadWriteWeb

This is one post/chapter in a serialized book called Startup 101. For the introduction and table of contents, please click here.

"It ain't over till the fat lady sings" means that nothing happens until you get the signature on the contract. That is when the money gets wired. Deals often get derailed. They drift, and then nothing happens. Or a competitor comes in and snatches the prize from you. That is why a "closer," someone who can seal the deal, is so prized.

Venrock has quite a history as a VC firm. In the 1930s, Laurance Rockefeller pioneered early-stage financing by investing in the entrepreneurs who started Eastern Airlines and McDonnell Aircraft. In 1969, Venrock was founded to continue this heritage of investing in and building entrepreneur-backed companies, beginning with Intel. You will find a bunch of household names in its portfolio, such as Apple, as well as more recent Web tech ventures, such as CC Betty, BlogHer, Bungee Labs, and SlideShare. Venerable, perhaps, but not one to rest on its laurels, as Brian Ascher explained in our recent interview.

This is one post/chapter in a serialized book called Startup 101. For the introduction and table of contents, please click here.

First, the good news: building a website today is ten times cheaper and faster than it was 10 years ago. Now, the bad news: building a website today is ten times cheaper and faster than it was 10 years ago.

You are entering an incredibly crowded marketplace. You have to get and keep people's attention extremely fast, because hundreds of other services are just a click away. The bar is set very high, and knowing exactly how high does help. If you reach too low, you will only catch air and crash to the ground.

The following is one in a series of guest posts by venture capitalists that we're running here on ReadWriteWeb. This one is by Paul Jozefak, a VC based in Hamburg, Germany, who used to run SAP AG's European venture activities and is now a managing partner at Neuhaus Partners. The original post can be found on his blog.

I was thinking about what questions I would ask if I were raising venture capital. Funny thing is that I often think about what to ask entrepreneurs when deciding whether to invest in them. I've told entrepreneurs often enough that they should ask their VCs just as many questions. I have never really clarified, though, what they should ask. My bad. So, to be fair, here is what I would ask a VC if I was interviewing one for the highly coveted opportunity to invest in my business (note the satire).

This is one post/chapter in a serialized book called Startup 101. For the introduction and table of contents, please click here.

This is possibly the most important strategic decision one can make for a Web tech venture. It is almost always a trade-off. There are those few magic ventures whose revenue scales from day one, without the need for external capital. We all want those, but they are almost as rare as hen's teeth. In most cases, you face a choice between scale and early profitability. You need total clarity on this decision, because it will determine your capital-raising strategy and all of your execution plans.

In our latest VC interview, we spoke with three of the four partners of XG Ventures: David Lee, Greg Lee, and Andrea Zurek (the other partner, Pietro Dova, could not make the call).

Yes, the G in "XG" stands for Google. The partners were early hires for strategic roles at Google -- or, as one of them put it, they were on the "rocketship." If you are looking for early-stage funding (seed to Series A) for an Internet venture (in video, social media, mobile, real-time, etc.), and you are based in Silicon Valley, you may want to get to know them. This interview is a good start.

This is one post/chapter in a serialized book called Startup 101. For the introduction and table of contents, please click here.

Fear of VCs is a common problem for first time entrepreneurs. It is a natural fear. You are going to be negotiating with somebody who is older, richer, and way more experienced in this than you are. You have heard a bunch of horror stories. They have the one thing you need to turn your dream into reality.

But chill out. Read this eight-step guide, and keep going.

This is one post/chapter in a serialized book called Startup 101. For the introduction and table of contents, please click here.

There are many books and countless blog posts about pitching (to both customers and investors). All we can hope to do here is, (1) put the pitch into some perspective, and (2) abstract the few key things that will help you when you are on stage. Most entrepreneurs are passionate about a particular market or technology, and putting a sales hat on does not come naturally to them. That is okay. Substance matters way more. But you can ruin a great opportunity if you mess up your pitch.

We recently spoke with Michael Elias, a founding partner at Kennet. Go to Kennet's website and the first thing you see is:

"You've funded your growth the hard way: by selling real value to real customers. You don't need venture capital to validate your idea: the market has already done that. You need a different kind of capital."

In other words, they are looking for entrepreneurs who have bootstrapped.

We have been tracking Series A deals in Web technology since the market mayhem in October 2008. Last month, we started researching this with our new partner, ChubbyBrain, which tracks this kind of data full-time. Launched in February 2009, ChubbyBrain is a New York City-based information services provider that democratizes startup and investor information. Early-stage investing is so important for the innovation economy, and the data we were seeing was either incomplete, only available quarterly, or presented with a negative slant. That is why we are presenting this data every month.