VC partners open up with industry blogs

Venture capital is known for secrecy and blood sport.

Slowly, though, a handful of venture capitalists have started opening up about their thoughts. And they’re doing it democratically: with blogs. That’s right, they’re even letting entrepreneurs give comments as feedback.

By Matt Marshall

Mercury News

http://www.siliconvalley.com/mld/siliconvalley/business/columnists/9719468.htm

We’ve counted 11 serious VC blogs. The earliest Silicon Valley VC blog was hatched by Menlo Park’s August Capital. David Hornik is one of the leading contributors at the site, http://www.ventureblog.com. The motivation, Hornik said, was to dispel the idea that “venture capital is a black box,” an intrigue-filled industry where entrepreneurs are largely shut out.

Since its launch in February 2003, it has remained among the more popular VC blogs. The contributors try to post longer, thoughtful pieces focused on trends, and — remarkably — very little hype about their own companies.

One lively exchange came in late August after a blog by Kevin Laws, of PacRim Venture Partners in Palo Alto, also a contributor to Ventureblog. He wrote a spirited defense of “liquidation preferences,” favored by VCs to guarantee return on investment — but often dreaded by entrepreneurs.

Many comments were critical. “Sorry, this is total baloney,” said respondent Steven Kane, before turning personal. “Apparently Kevin doesn’t mind investing in dummies — actually he seems to prefer it.”

Still, Hornik says such exchanges are generally good because they open up a debate that hadn’t existed.

Another early entrant was Jeff Nolan, VC with SAP Ventures, an arm of the software giant SAP. Palo Alto-based Nolan takes strong stances on new trends, recently writing, for example, that Intel’s timing on its mobile WiMax initiative may be too ambitious.

His main motivation was to learn about the medium, and to help boost SAP Ventures’ profile. It has worked: He has since snagged invitations to exclusive events and met people he wouldn’t otherwise have met, he says.

With popularity, though, came tension with the marketing folk at SAP. Nolan is a “fan of ornamental cussing,” as he puts it, which hasn’t gone over too well. Not long ago, he changed the name of his blog from “SAP Ventures” to “Jeff Nolan.” He says: “I was tired of running interference with those guys.”

Tim Oren, a VC with the Pacifica Fund in Palo Alto, recently moved his blog from his firm’s Web site, apparently partly because his firm was concerned readers would think it endorsed his views.

Among the highest-profile VCs to start blogging is Steve Jurvetson, of Draper Fisher Jurvetson. He launched “The J Curve” in June. He’s his usual cerebral self, delving into subjects like evolutionary dynamics and quantum computational equivalence. Come again?

Jurvetson, like Nolan, says his blogging has spawned a stream of business plans from like-minded entrepreneurs.

Among the most respected VC blogs is “Feld Thoughts,” written by Brad Feld, partner at Mobius, in Colorado. Several VCs, including Nolan and Hornik, said they admire his writing style, frankness and depth. Like Nolan, he takes pride in holding Big Media accountable, recently criticizing the New York Times for using the word “freaking”’ as a substitute for a more profane word.

The VCs are also learning lessons about blog etiquette. Feld learned the hard way after an early post — a press release about an investment he’d made in Stratify. He got instant critical feedback. “The comments were `Hey, thanks for the spam. I don’t want the press release. I want what you think,’ ” he recalls. Feld has since changed his ways.

The earliest VC blog apparently emerged at Ignition, a venture firm formed by former Microsoft executives. Partner Martin Tobias is among the more prolific, posting on his own site, Deep Green Crystals, in November 2002. As a pioneer, perhaps he can be forgiven for one of the bigger howlers. Tobias, founder and former CEO of Seattle-based Loudeye, didn’t mention that fact when he blogged Nov. 12, 2002: “Here is a really cool company with an undervalued stock . . . Loudeye Technologies.” It was his second post ever.

Asked about it now, Tobias said it came when as he experimented with blogging, and it was more of a joke. Still, he says he should have disclosed his former position at Loudeye.

Contact Matt Marshall at [email protected].