Attracting Financing is a Marketing Problem — Kleiner Perkins trial


10x

The Ellen Pao vs. Kleiner Perkins sexual discrimination trial revealed some of the inner workings of VC firms.  One Pao testimony stated that she had brought Twitter to their attention, and it was never adopted.  Why Twitter is so important?  After its IPO, I know one early New York investor whose 3% early investment in Twitter brought him $900 million.  And this trial highlights my earlier comments on how VC firms operate: they have one mandate only – to bring in high flying, fast growth companies to the fold for their limited partners.  The minimum growth should be about 30% annually or ROI of 10X.  And if any startup is interested in presenting a company to any such VC firm and that company does not demonstrate that it is capable of meeting that target, then don’t bother calling them.

Virtually all VC firms are not here to save the planet or find a cure for an orphan disease. Each director, as the Kleiner trial showed, has to meet some metrics that fulfill the investment strategy for that firm. Or, as in the alleged case of Pao, you get canned.

There is considerable pressure on junior partners to deliver.  They have to sift through hundreds of business plans, identify a subset to bring to the firm, and follow up on due diligence.  Then the term sheet offer is made. They will look at the best organized presentation in the right space.

And I stated early, raising capital is a marketing problem.  One must deliver what the investor expects. That is what the Kleiner trial highlights.

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About Juan Ramón Zarco, SVVGP 胡安•雷蒙•扎尔科

Juan Ramon Zarco, 胡安•雷蒙•扎尔科, Silicon Valley Ventures Growth Partners llp, Hygieia Healthcare Technologies Company, AllRest Technologies LLC, Crimson Growth Partners LLP, jrzarco2001@yahoo.com, is an experienced as CxO, General Counsel and Secretary to public and private companies with global operations. Established track record of producing practical, revenue-focused solutions. As Counselor and Secretary, demonstrating vision, integrity, and sound business judgment, to CxOs. Managed complex, strategic transactions, M&A, contracts support, PE Financing, IPO, SEC compliance, Corporate/HR governance, IP licensing, Budgeting, Staff, outside counsel management, International market access strategies, Domestic & foreign government relations and advocacy. Creative in designing and implementing market access strategies. Practices law beyond conventional model with low-overhead and project-based fees. Effective at managing departments, formulating marketing strategies, balancing budgets, and implementing cost-saving measures. Extensive in-house and private practice experience, advising clients on commercial, corporate, international business, and technology law and policy. http://www.docstoc.com/video/89135472/make-your-business-an-international-presence; http://www.youtube.com/watch?v=fx5gijf3yoc For Sprint, he managed iDen international development in Southeast Asia, Middle East, and Africa, and contractual issues with Verizon. In Private Equity, he worked with Pegasus in vetting international investment deals and interim President for portfolio companies, such as Data Foundation, a data storage company, handling marketing, strategy, fund raising, and accounting. Before Pegasus, Mr. Zarco, as CLO and V.P. of Corporate Development, played a principal role in the structuring, international expansions for 2 telecom companies, U.S. Cable Group and Viatel, Inc. in financing and M&A deals exceeding $200 million. Mr. Zarco earned a J.D. from NYU Law School, M.B.A. from Cornell, and B.A. from Williams College; is fluent in Spanish, Portuguese, French, and German, with working knowledge of Russian, Arabic and Japanese.
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