Thursday, February 9, 2012

Writing the Check is the Easy Part

Last week I had the privilege of attending the Minnesota premiere (sponsored by among others, Gray Plant Mooty) of the documentary film, “Something Ventured: Risk, Reward, and the Original Venture Capitalists.” It was a great night of movie-watching and meeting with those interested in the role of entrepreneurship and venture capital.
Something Ventured tells the story of the creation of an industry that went on to become the single greatest engine of innovation and economic growth in the 20th century. It is told by the visionary risk-takers who dared to make it happen--leading venture capitalists Tom Perkins, Don Valentine, Arthur Rock, Dick Kramlich, and others.  The film also includes some of America's finest entrepreneurs sharing how they worked with these venture capitalists to grow world-class companies like Intel, Apple, Cisco, Atari, Genentech, Tandemand others.
While the film mostly features talking heads, their stories add color to the incredible statistics that demonstrate the profitability and success of these early investments. Here are some of my favorite anecdotes from the film:
·    Steve Jobs and Steve Wozniak were considered smelly, ill-mannered geeks who dressed funny and could not get a bank to even listen to them.
·    Nolan Bushnell, who created Atari, held board meetings in his hot tub. Bushnell introduced Steve Jobs (then 18 years old and working as a technician at Atari) to Don Valentine.
·    Bushnell was offered a one-third stake in Apple for $50,000. He turned it down. Bushnell’s comment? “That was a big f------ mistake!”
·    Arthur Rock displays a one-page business plan filled with typos and few specifics requesting $2.5 million for the creation of Intel. Rock says, “Not a polished document, but kinda cute.”
·    Mike Markkula ($142,000), Arthur Rock ($57,000), and Don Valentine ($150,000) provided the seed money for Apple. Collectively, their investments in Apple are now worth over $300 billion.
·    Markkula recalls the early days with Jobs and Wozniak. “While the two of them did not make a good impression, Woz had designed a really wonderful computer. I came to the conclusion we could build a Fortune 500 company in less than four years.” Markkula adds: “Steve Jobs had never seen the inside of a board room. I remember one meeting when he took off his shoes and put his bare feet on the table. I said, ‘You’re excused until you act like a board member.’ He put his shoes back on and was fine.”
·    Half of the original founders of start-ups were replaced within 18 months after receiving start-up funding. Cisco System co-founder Sandy Lerner was the sole woman who appeared in the film. She tearily describes how Don Valentine abruptly fired her from the company she started.
·    Don Valentine tours the Atari factory and finds the people working there smoking something that’s not his brand. Valentine believes in the Atari concept of moving the coin operated game console featuring Pong into homes. The film includes a clip of a nostalgic commercial showing a family sitting in their living room playing Pong, which demonstrates how quickly this world has changed.

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