I get asked this question often: How does one become a VC? Well, if you are an analyst/associate candidate, this should really help you. Click on link below for the rest of a very useful article…Great pointers on how to be a strong network node!

As an analyst, you can be useful at pretty much only three things: communication, sourcing, and analysis. The great thing for VC wannabes is that these are all things that you can do now, before a job even comes up. There's nothing stopping you from putting forth your analysis of a new startup, or tipping VCs off to potential deals today, even when you're not at a firm.

Many students have the misconception that, as an analyst, you're going to be put in front of a big stack of business plans and your filtering skill is what's going to make you the next Mike Moritz. Guess again. VCs hustle hard to track down deals and they expect everyone in the shop to be bringing deals to the table, because you should be in the flow of interesting things going on.

via How to get started as a Venture Capital (VC) analyst | from This is going to be BIG! – Comments on New York Tech Community, Startups, Venture Capital and Career Education.

Vinit Nijhawan (from BU) is a friend and a respected colleague. He had the following to say on an article about the arrogance of venture capitalists that appeared in Xconomy. He might be spot on, and hence sharing here….click on link below for original article.

I have been both an entrepreneur and a VC and now I am teaching entrepreneurs how to deal with VCs at Boston University. In the end raising money from VC is a sales process not unlike selling a product/service to a customer. You first have to establish the need: 1 is the VC partner interested in making an investment in the space you are in and 2 how many boards are they on, the fewer, the more likely they need to make another investment. Next you have to identify the targets: this is much harder since VCs needs are dynamic, sometimes as dynamic as what they read in WSJ that morning about a space. Then you have to make the sale: my experience is that VC partners make their mind up to promote your investment within 15 minutes of seeing your pitch–move on if the body language is not totally supportive of you. Lastly and the most difficult is the close: without real or perceived competition it is not in the VC’s interest to close quickly–their risk goes down over time as your company/idea matures. Net net it is a difficult sales process for most entrepreneurs, especially first time entrepreneurs and it is time consuming. Finally it is crucial to manage the post-sales process effectively: my recommendation to VC-backed CEOs is that they have to allocate 15% of their time to “investor relations”. It feels like overhead, but it is crucial to manage your VC investors in good times so that they are supportive in bad times.

via The Arrogant Venture Capitalist: A View from the Trenches | Xconomy.

US visas for founders of start-ups is an  important topic that I feel rather strongly about. There are no ifs or buts about it. It is a crime that we do not have a mechanism to retain the brightest minds from other countries in our own who would create exciting & dynamic new ventures, create jobs for educated Americans, lead the way in global innovation, and open new frontiers for our economy. We need to  immediately figure out a way to enable anybody who wants to start a legit business in the US to stay here.

Brad Feld and Paul Kedrosky have done an excellent job describing why we need to have:

(a) a special class of visa called ‘Startup visa’ for founders of startups. Founders that are able to raise a nominal amount of capital as validation of their company creation idea should be given a visa so they stay here and pursue their venture.

(b) a visa stapled to every graduate degree awarded in the US to retain the brightest minds here instead of sending them away after training them at our top universities. These young, highly educated, motivated and creative individuals are precisely what this country needs – for innovation, job creation, global leadership.

I have been an entrepreneur who created at least a couple dozen jobs in the US, and am now an investor in startups that create even more jobs….but I almost never became an entrepreneur due to visa issues.

Even with a highly technical Ph.D from MIT, I had no legal way of staying in this country after graduation to  start a company. I had a couple of business ideas in mind but no way of pursuing them formally.  My entrepreneurship passion was almost destined to die in entrepreneurship classes at MIT.

The only way for me to stay in the country post-graduation was to get a job in a large corporation that would sponsor an H1-B work visa. So I did that and joined a large management consulting firm. I liked my work, but lets be clear: I did not create any new jobs for Americans, or create much economic value/contribution to US economy in any meaningful manner (besides paying taxes) until I was able to join the entrepreneurship ranks mostly due to a lucky option available to me to retain my visa status in the US. For a few reasons, we created our new company initially as a subsidiary of our angel investor’s company, and fortunately for me I was able to transfer my H1-B visa to that parent company while I applied for a permanent residency as a person of interest to the US. Had that visa transfer not been possible (and most non-US citizen/resident startup founders don’t have such corporate structures available to them), I would have had to stay in my corporate job for additional 6-7 years (possibly my most productive years). I think 7 years later, with a bigger salary+bonus package in a comfy corporate job, leaving to do a startup would have been infinitely harder. I was able to take a big risk when I did partly because I had less to lose at a young age, and partly because passions ran strong. Now I wish for more people to have the kind of opportunity I had in this country.

I am posting some sections of Brad and Paul’s article in Wall Street Journal below:

While fast-growing companies have long been the main source of new jobs and innovation, this country makes it outrageously difficult for immigrants to launch new companies here. This doesn’t make any sense. After all, Google, Pfizer, Intel, Yahoo, DuPont, eBay and Procter & Gamble are all former start-ups founded by immigrants. Where would this country be today without their world-changing innovations?

Immigrants have not only founded big, well-known companies. Foreign-born residents made up just 12.5% of the U.S. population in 2008. But nearly 40% of technology company founders and 52% of founders of companies in Silicon Valley.

Yet we don’t seem to care. We send recent, foreign-born university science and engineering graduates back to their own countries after their student visas expire—unless these creative sorts are willing to spend some of the most entrepreneurial years of their lives working in a big company under an H-1B visa after they finish their studies.

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In the 21st century [...] opportunities don’t wait for our interminable, employment-based visa programs. As a result rather than saying “Come and create jobs here” we, in effect, tell them to shove off. Come back when you have a few million in sales— at which point they will be rooted elsewhere and creating jobs somewhere else.

That needs to end now. Immigrants who come here to create companies create jobs. We need the jobs.

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The U.S. remains one of the most attractive countries for entrepreneurs. It has a culture of risk taking, capital formation, and an economic dynamism that is the envy of the world. This gives us a competitive edge that we should not let slip through our fingers.

via Paul Kedrosky and Brad Feld: Start-up Visas Can Jump-Start the Economy – WSJ.com.

A fascinating story of courage, dedication, skill, and genius. Hugh Herr is an inspirational guy…and we, at General Catalyst, are so proud to be a part of his journey.

A Step Beyond Human

Andy Greenberg
Forbes Magazine dated December 14, 2009

MIT professor and double amputee Hugh Herr is building the world’s most advanced prosthetic foot.

On his way to a lunch meeting a few years ago Hugh Herr was running late. So he parked his Honda  Accord in a handicapped parking spot, sprang out of the car and jogged down the sidewalk. Within seconds a policeman called out, asking to see his disability permit. When Herr pointed it out on his dashboard, the cop eyed him suspiciously. “What’s your affliction?” he asked dryly. Herr, a slim and unassuming 6-footer with dark, neatly parted hair, took a step toward the officer and responded in an even tone: “I have no [expletive] legs.”

Blurring the boundaries of disability is a trick that Herr, director of the biomechatronics group at MIT’s Media Lab, has spent the last 27 years perfecting. At age 17 both of Herr’s legs were amputated 6 inches below the knee after a rock climbing trip ended in severe frostbite. Today he’s one of the world’s preeminent prosthetics experts. His goal: to build artificial limbs that are superior to natural ones. His favorite test subject: himself. “I like to say that there are no disabled people,” says Herr, 45. “Only disabled technology.”

Read more at the link below.

via A Step Beyond Human – Forbes.com.

Recently a friend asked why I was still staying put in Boston? That got me thinking…

I didn’t move after my graduate degree even though I could have moved with the consulting gig to NYC, my startup primarily had markets in Europe, Michigan or California, and even now, when I am a cleantech VC, one would think CA is a bigger playground.

So I tried to list a few reasons below, personal and professional, for why I am still in Boston. Maybe I am missing out on big opportunities elsewhere. But so far I like it here. Having been here for more than a decade, it finally feels like home. If I had to move I can think of a few places that would be high on the list – and two driving factors would be (a) where can I have a bigger impact, and (b) weather.

Professional:

• Networks matter. I went to grad school here (MIT) and I know the local colleges and universities reasonably well. I have friends I can reach out to for help in technical due diligence, and I know entrepreneurs here who have built successful companies. It will take me at least a few years to develop such a network elsewhere. Besides, can any place but SF/Palo Alto provide the kind of dense network opportunity that exists in Boston?
• Intellectual stimulation. I am amazed at the level of intellect I see around myself in the Boston community. Academically, politically, socially, culturally – my friends and acquaintances wow me everyday on the depth with which they have analyzed problems and how engaged they are in big issues/ideas. Where would I get a chance to interact with the kind of IQ I am exposed to by just camping out at Cosi/Au Bon Pain/Starbucks at Kendall Square?
• Collaborative culture. At least during my time spent in the academia, then as an entrepreneur, and now as a VC, I find the community here inviting and collegial. At a recent New England Clean Energy Council dinner, my colleague Hemant addressed the audience as “my brothers and sisters in cleantech”. It really feels that way despite the competitive chases after exciting startups. Maybe it’s just the younger generation – but there is a real desire to be more connected, to be more collaborative, and to be encouraging of people with big ideas, bold ambitions, and audacious goals.
• Closeness. Everything seems so nearby in Boston. I realize this every time I go to CA, or to MI or TX, driving for hours to get to a meeting. I need only drive 20 minutes from center of the city to visit Route 128 companies, and I can walk from my home in Cambridge to Boston Public Gardens in Boston or to the NorthEnd on any decent weather day. I remember my first time in Boston when I got wrong directions at the Central Square T-stop and instead of MIT, ended up walking to Harvard. I realized then how close these places really were to each other. No wonder I still attend lectures fairly often at BU, Harvard, MIT, Tufts etc all the time, and never think twice about the distance to get to them.
• Career. I guess it does matter that I am working for a Boston-based VC firm that I really enjoy being at. I was lucky to have a few choices when I joined General Catalyst and so far I am very happy with my decision. I am told East Coast has a unique VC culture (still some remnants of a frat/boys’ club) and I am still learning to navigate my way. But my colleagues have been super accommodating and helping me learn the ropes. All else being equal, I am fascinated by the entrepreneurs that come out of our ecosystem, and I consider it a privilege to be working with them.

Personal:

• Closeness to the rest of the world. My family still lives in the Middle East and Pakistan. So I travel often and being closer to continental Europe and South Asia is nice. I also like visiting to Europe (and Europeans who usually make Boston a first stop on their travels through the US) for a wider exposure to culture, literature, music, history.
• Family. My wife has built her pediatric medical practice here. She knows each one of her patients by their first name. Leaving them behind would be a huge barrier to a move. That said, I recently tallied the cost of living in Boston for my family and the first reaction was eeks!
• Culture. I can’t say I quite fully know of or understand Boston’s art scene. And it’s certainly no NYC. But there is a vibrant cultural/artistic streak in the city. It appears a bit more conservative, but that probably suits my taste.
• Diversity. Not to be underestimated is the international, ethnic, racial, religious diversity that one finds in Boston. I can’t speak for the broader region but Boston is very much a melting pot – at least as far as the younger generation is concerned. Students arrive for all corners of the earth, some stick around for 4, others for 6 years, and some stay forever. Cambridge is actually the Republic of Cambridge, and Harvard Square is hip-hopping pretty much any time of the day. I have my favorite Thai, Indian, Japanese, Korean, Afghan, and Arabic food spots…but somebody please get me a nice Pakistani restaurant in Boston?
• Political activism. I am not overly political, but perhaps more so than an average American. And I love the civic/political activism that one observes in the Boston/Cambridge area. Consciousness about our role as global citizens and as leaders in our domains of influence is high. People regularly participate in charities, going beyond the act of passive donations – in fact since I have a view of the river Charles from my living room, I admiringly watch the many walks and races that bring millions to the riverbanks for terrific causes. Such community activism is much appreciated and admired by a Pakistani boy.
• Subway. I don’t use the T as much as I used to, but I blame that largely on needing a kid/car seat. Despite all its problems, our subway and extended train system is really not that bad. It is safe (for the most part), inexpensive, and life is golden if you work and live close to the red line. But if you are on the green line, you might be better off biking.

My colleague Adam Berrey has a great post on his blog about pitching to VCs. I see hundreds of pitches/year and it still amazes me that so many people don’t pay attention to their presentation skills even when they get the coveted opportunity to present to a VC partnership.

Here are some  general recommendations:
Do some research on your audience before the meeting – Enable yourself to connect at least some names to faces when you walk in the room. Maybe look up what Boards some of the partners sit on? Are any of their portfolio companies  familiar to you. Do you you know any of their CEOs, CTOs? Spend the first 2-3 minutes developing a rapport, breaking ice for communication, and setting the tone for the rest of the hour. It also helps to tell the story of the genesis of the business in the beginning. But keep it short, and tell only if it makes the entrepreneurs stand out as special.

1. Learn to Present – Public speaking is a skill. Apparently more people are more afraid of public speaking than dying. To paraphrase a comic, they’d rather be in the casket than give the eulogy. Public speaking is a skill worth taking the time to learn with a good coach. (VCs like entrepreneurs who are knowledgeable, confident, networked, know their customers, and have a constructive dialogue with their audience during a presentation. Additionally, not a bad idea to run your presentation by someone who has pitched to (ideally these) VCs before).

2. Practice – Any good speech requires practice¬—out loud and for real. There is usually a curve: the first few runs our good, then it sounds canned, then you get great and it becomes natural and fluid. (Best presenters can almost deliver the talk without the slides)

3. Plan for Questions – Most investors ask questions. I’ve seen entrepreneurs who start getting peppered with questions before they even get to their first slide. You have to anticipate that. A few steps make a big difference:

• Create an FAQ – Take the time to brainstorm all the questions you might get, and prepare short, specific answers that don’t ramble. You should never hear a question you’re not ready to answer. Investors rarely ask mystical questions. (If you hit upon a question you do not have answer for, do not stumble into an answer. Let audience know this is an area worth looking into)

• Make Time – Expect that at least half the time you have to pitch will get eaten up with questions. Plan for that accordingly by cutting down the formal stuff and leaving time for the constant questioning. (If you are not getting questions, chances are your audience is not engaged)

• Roll With It – It’s better to just answer questions quickly, clearly and confidently as they come up. Then continue with the presentation as if there was no interruption. Don’t defer questions to a slide you already have, and don’t start going out of order. Stick to your story even if there is a bit of repetition. Half the people probably missed it the first time. (You need to leave the impression that you know this space dead cold. Anything less is unacceptable)

4. You Are More Important than Your Content – Every time someone pitches, the first follow-up topic among the partners is what people thought of the entrepreneur, not the business. If you are clear, confident, relaxed, prepared, smart and articulate, that goes a long way. (Of course, you need a good business too.)

5. Slides are Visuals Not an Outline - PowerPoint has all but destroyed the art of public speaking. Don’t print your speech on your slides and don’t read your slides. You should have a speech memorized, and your slides should be visuals that support your speech. Because slides are what get passed around, I’d suggest interlacing the visual slides you use in your live presentation with the detail slides you expect people to read offline. When you present, just hide those supper detail slides. (If you are new to the art of slide building, do a quick google search with .ppt included with keywords and go through a few examples to get ideas for visual layout/colors/fonts etc).

…..

8. Be Quick – The investors you want to work with are smart, and they get it. Don’t waste their time, stick to the point and move at a good pace through your content. If you capture the imagination of an investor, you will get many more chances to go deeper. Also, pay attention to their mood, and speed up when they are getting bored. Generally you don’t need those context slides about why the Internet is mainstream, etc. The investors you want should already have the fundamentals on your space.

9. Get Advice – If you’re presenting to a partner meeting, get some advice from the partner that is bringing you in. They know the landmines, the people who matter, and questions that will come up, and they can help you prep. (If you are presenting to the partnership, make sure your sponsoring partner looks at your presentation at least a week in advance and get feedback. Ask what would the partnership’s top 3 questions will be).

via 004. Your Pitch Sucks | Startup Blender.

Professors at top universities doing research to make a difference and for inventing a way out of energy problem is a great thing!

For Sadoway, the project is worth pursuing despite its daunting challenges, because the potential impact is so great. “I’m not doing this because I want another journal publication,” Sadoway says. “It’s about making a difference … It’s an opportunity to invent our way out of the energy problem.”

via Liquid battery big enough for the electric grid?, Energy, Massachusetts Institute of Technology – NanoTechWire.com – The online resource for Nano Technology And Research.

Regarding the topic of grid storage market exploding: I am hearing conflicting views from industry experts. At battery/grid storage conferences, optimism around the idea that this market is ready to explode abounds. Innovation is in top gear and startups are coming up with ways to attack the grid storage problem with low cost solutions.

But then there are industry experts who are eager to deflate this notion as hype – and point to natural gas (existing plants currently running sub-capacity + nat. gas storage) as a solution already available for grid’s needs for at least the next 10 years or so. They suggest stationary markets are limited to UPC/backup power, few mins of storage to bring nat gas plants online, and frequency modulation.

Tough to decipher but I am digging into it. It is clear though that future batteries will likely be designed from grounds up for specific purposes than one-size fits all (from consumer electronics to automotive and grid storage). If you have good references, shoot my way.

There are academics and then there are academics. Some academics seem lost in their own world, absent minded geniuses who solve incredibly complex and difficult problems, but socially cannot carry a conversation for more than a few minutes outside of their domain expertise. I had one such breakfast in Denver last week and I am still surprised it lasted an hour.

But tonight I had dinner with an academic who wasn’t such a person. A professor of materials science at a top university, and inventor/founder of a new materials science technology company…and he was suave, smart, warm, and fun. And carried an interesting opinion on VCs.

As his company goes through the fun exercise of raising a formal round (post a healthy seed investment), he is getting to meet a bunch of VCs, and I got to learn a bit from him how he perceived and experienced some of his interactions. Here’s some of what he observed (btw: he is meeting VCs from pretty well known, highly credible firms):

· He thinks VCs are smart and he has enjoyed his interaction with them. At least one VC knew so much about his space that he was simply ‘blown away’.

· Every VC has focused on a different aspect of his company as most critical for success, or as most risky. Some focused on technology, some focused on scaleup and manufacturing issues, some needed to know early markets and company strategy for early customer adoption, while others only wanted to talk about the long-term big markets where the ‘pop’ would come from. He seemed surprised we did not all have the same checklist as w went into due diligence J.

· VCs that end up spending/wasting a lot of his time on tech due diligence are usually the ones who themselves do not have a technical background. They keep going around in circles, and he seemed a bit tired of responding to their hired consultants.

· Some VCs like to dig into the nitty gritty details of technology – and in his opinion not only becausethey deemed it necessary for their contribution to company’s success, but because they felt they had to be ‘man’ enough to stand toe to toe with the technical guys in the firm. An absolutely ridiculous endeavor, he thought.

· VCs do bring value-add. They don’t just bring money, but also a tremendous network, and a broad-based view of the horizontal industry landscape. He thinks of VCs as ‘aggregators of information and people’, to the benefit oftheir portfolio companies.

· After a few of these meetings he has begun to realize the importance of having investors on his Board that bring a variety of experiences to the table. Not only can they challenge each other, but can also help the company in a variety of ways. VC rolodexes don’t often overlap (esp with industry contacts etc), and often critical strategic decisions need to be made inside the company where having a diversity of opinions and frameworks would aid good decision making.

· He found General Catalyst approach of focusing on the entrepreneurs refreshing and attractive. But then, he did say that right after I paid the bill. So I will take that with a grain of salt J.

I had a wonderful time at dinner. Need to meet more profs like that.

I just met up with a local journalist and in casual chat about the venture capital scene in Boston came up a discussion around Boston VCs wanting to bet on ‘known entities’, i.e. entrepreneurs that either the same VCs or others have bet on before, and have been somewhat successful with. I have heard this term a few times now and since I am still new to the field, trying to make sure I understand it well. Obviously interested in learning what you think. Some thoughts:

• When you look at some of the more successful VCs, they seem to have killer instincts for entrepreneurs. Not so much the technologies, but people who drive businesses to success. So yup, people matter a lot and one should certainly bet on them before anything else.
• So who are the people we should bet on? Are these wild eyed first-time entrepreneurs who dare to think big and whose passion is infectious and scary crazy at the same time?, or those who have carefully thought through answers to our questions?
• Are the ‘known entities’ in our circles really the big hitters? or do we risk restricting ourselves to entrepreneurs who have had small successes in the past and can’t see past that to those billion dollar exits VCs would like to see? There are not that many billion dollar  ‘known entities’ around, esp in Boston. At least not in my (admittedly small) circle.
• Should we worry about what I call a ‘closed box syndrome’, i.e.  – group-think – if we keep talking to the same entrepreneurs on their 4th, 5th, 6th business plans? How do we think out of the box? I have observed a tendency among some entrepreneurs to think VCs must know what they are talking about and hence they change their pitches dramatically to suit the VCs. Generally it is not a good idea. Yes, take advice, but your idea is your idea and I am only reflecting on it from the outside.
• How do you marry the ‘known entities’ with the aspiring first-time entrepreneurs to create the potential killer team? Maybe this is one place where VCs can help as matchmakers? But this is not a recruiting role. The passions have to intersect as founders for the creative juices to flow.

Anyways…just thinking aloud. Good VCs bet on great entrepreneurs, and as I observe my senior partners at GC, I see that in practice. I need to find those great entrepreneurs myself. So if you think you are one, and open to a conversation, just drop me a line.

President Obama visited MIT today and gave a speech on probably the biggest challenge USA and the rest of the world faces: Energy and Climate Change.  I somehow landed with an invite to join the limited audience (thanks REBN and NVCA), and my thoughts on his speech are below:

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What a proud day for MIT! President Obama delivered a speech today at MIT on energy policy to an audience of almost 1,200 (from my MIT days I remember that being the official number of people Kresge can hold). This represents an important milestone in the journey of many MIT researchers, faculty, students, and alums who have worked hard to make MIT the mecca of clean energy research in the world. Obama came, joked about his motorcade being placed on top of Building 10 (referring to hacks that MIT’ers like myself hold sacred), enthused the audience about the great challenges and potential that lay ahead for all of us, and left after a few hugs. All in a matter of less than 30 minutes.

I had waited for over 2 hours for him, but it was worth the wait (and the quick clearing of my calendar). I left wanting more from him. We all do on issues we care about deeply. The President’s job today was to celebrate the successes so far, and get us jazzed about his commitment to face the challenges ahead and I believe he succeeded. I like what I heard:

1. Nations are engaged in a peaceful competition to determine what technologies will provide the clean energy of tomorrow. And the nation that wins the competition will dominate the global economy.
2. The biggest threat to our progress is pessimism. America can solve problems and act collectively.
3. Innovation and discovery is in our DNA, but the challenges of this generation are also bigger than before.
4. The Recovery Act is the largest investment ever in energy in history ($80 billion). Not only in technologies of today, but also in science for technologies of tomorrow.
5. The Pentagon has declared dependence from fossil fuels is a threat to our security. “Operation FREE” is in effect!
6. Young people realize clean energy is the challenge of their generation. All MIT community members are heirs to a legacy of innovation…one gets excited just being there.
7. Ed Markey and John Kerry are working across the aisle to turn all the work on energy and climate into an act of legislation. The naysayers are being marginalized, but the closer we get, the opposition will fight harder.
8. Obama believes this nation will lead the clean energy economy of tomorrow. Yes, I too believe the same!

It was a fantastic show of force by the local clean energy community. As someone remarked, it was the best cocktail hour they had ever been to. Executives, entrepreneurs, investors, lawyers lined up to get in and mingled until the announcement was made for the singing of the national anthem. It was a celebration of sorts, and a moment of reflection that despite the turbulence in the economy around us, there could be no worthier industry than clean energy to be working for.