Points well noted. It is indeed inspiring to think how many in tis Valley have "unencumbered by history" created something big out of nothing more than their ideas and will power. Thanks for your efforts to reflect and stoke that spirit.
Hi Rick, just a correction - and it's almost an irony considering the
title and subject of the article.
Nolan was co-founder of Atari, not founder. It was founded by Nolan
and Ted Dabney on June 27th,1972. The two had been under partnership
as Syzygy Engineering since 1969, started as an engineering firm
venture to create a video driven arcade game. When they went to
incorporate under Syzygy in '72, they found several other companies in
California using Syzygy in their name and decided to have the clerk
pick from a list of provided names - hence Atari was the name they
Often the rose colored glasses can be provided by entrepreneurs as well. ;)
What struck me about the interviews was how the early investors were surprised by success and the returns they generated. Arthur Rock, Tom Perkins and others entered the business with no real knowledge of what the outcomes would be. Not so now. Back then, it was a true gamble. Today many VCs don’t carry the conversation unless there’s promise of, say, 10x return. The movie revealed a more even distribution of power, risk, and involvement than we see today.
The filmmakers pursued the vision of producing this from a genuine love of the story and the history of how this valley grew. I too have wanted to explore more of the valley’s history – not for PR value (note that I work for Eastwick, which sponsored the screening…thanks for coming) but to indulge the sense of amazement this place has inspired since I started my career here in 1981. I take a less cynical view of what drove Molly and Paul to tell the story – and I’m glad they did. Like all in the audience, I reveled in hearing firsthand experiences from the early years and felt grateful that the recollections of those times had been preserved.
Nolan, I agree, was a breath of fresh air. How cool to know he’s innovating again.
There is a real problem in that the overhead needed to provide due diligence (monitoring/reporting/mentoring) can't be easily reduced below a certain level. Even if overhead amounts to one person's salary, and it should be at least that to ensure that the money is spent wisely and effectively, and the investor's interests protected, the minimum funding has to be millions to make sense alongside the fixed costs of managing it.
This means that smaller loans, if made at all, would have to go out unsupervised, which increases the risk, and makes the investors wary. Much better to lump millions together and supervise it with annual overheads of under 5% of the total burn.
The excesses of VCs seem to stem from poor supervision (by the investors) of what the overheads are being spent on. Champagne, or common-sense business advice and support?
Rick, Wish I was at a "private screening" of my own VCs. Vulture's are too kind a word. They did indeed make a fortune and those of us who did the work were left with crumbs. Hope the Maltese crashes on the rocks one of these days.
Only secondhand experience, from my wife's experience as a founding employee of a software startup. It was quite an education, seeing them go through the different financing rounds and equity dilutions, but then struggle to transition from startup phase to ramp up phase. They ultimately closed the doors in late 2008...and all that stock became so much cat litter box liner.
You said "Of course in nine out of ten cases the riches never materialize for anyone but perhaps the founders." I wonder what the real statistic is, and I would be surprised if as many as 1 out of 10 actually succeed...at least to the degree that the VCs define success.
In any case, I am definitely looking forward to seeing this film.
Replay available now: A handful of emerging network technologies are competing to be the preferred wide-area connection for the Internet of Things. All claim lower costs and power use than cellular but none have wide deployment yet. Listen in as proponents of leading contenders make their case to be the metro or national IoT network of the future. Rick Merritt, EE Times Silicon Valley Bureau Chief, moderators this discussion. Join in and ask his guests questions.