Baby Sitting for Start-Ups
As a first-time Silicon Valley chief executive, Jim Fowler needs all the nuts-and-bolts management help he can get. These days, he's getting a lot of it from an unlikely source: his venture-capital investors.
Mr. Fowler, an ex-U.S. Navy diver, runs Jigsaw Data Corp., a San Mateo, Calif., Internet start-up that allows salespeople to trade business contacts online. He chats with one of his venture-capital backers, Tom Peterson, about operational matters and other issues several times a week. Mr. Peterson also keeps in near-constant touch via email, dropping Mr. Fowler messages about analyst reports and business referrals.
Late last year, Mr. Fowler even attended a 12-hour management-training course organized by Mr. Peterson's firm, El Dorado Ventures, of Menlo Park, Calif. Mr. Fowler used some of the tidbits he gleaned from the four sessions -- mainly about how to better recruit and interview job candidates -- to snare a new vice president for engineering, Ed Komo, earlier this year.
El Dorado, which has invested about $2.5 million in Jigsaw, is "incredibly involved" in the company, says 41-year-old Mr. Fowler, who started the business in 2003. In today's tough environment for start-ups, where making money and going public is much harder than it was six years ago, venture capitalists "have to justify their investments," he says, and thus "they spend a lot more time on them."
Call it Start-Up Management 2.0. In high-tech hot spots like California's Silicon Valley, Boston and Austin, Texas, venture-capital investors are going back to basics: They're monitoring the start-up companies they fund more closely than they did during the technology boom and trying to foster better management practices. In the late 1990s, many start-ups didn't get attentive care and feeding from their investors, since even poorly managed companies could launch successful initial public stock offerings and make venture capitalists rich.
It's a different story today. With the public markets less receptive to tech IPOs, venture capitalists must hold on to their investments longer. That means they can no longer rely on green, unskilled management teams to steer their start-ups toward quick IPOs or sales and must build companies for the long term. According to research firm VentureOne, a unit of Dow Jones & Co., venture-backed companies that went public last year had taken an average of more than 5? years from the time of their first venture investment to complete a listing. That's up from less than three years in 1998.
"I don't think there's any debate that the companies you invest in ... are going to be private for longer periods of time," says Lou Volpe, managing general partner at Kodiak Venture Partners in Waltham, Mass. Venture-capital returns are also down compared with six or seven years ago.
As a result, early-stage investors are now intervening in their start-ups' day-to-day affairs more often. Mr. Volpe, former president of Internet-switching company ArrowPoint Communications Inc. -- which went public in 2000 and later sold itself to Cisco Systems Inc. for nearly $6 billion -- says he now helps his start-ups do everything from hire new executives to file for patents.
Other venture firms, like El Dorado and Austin Ventures, in Austin are organizing more educational seminars for start-up executives, effectively sending managers back to school. Seminars might focus on outsourcing to China, or keeping a company blog. Venture capitalists, who have backed tech success stories like Google Inc. and Apple Computer Inc. typically take equity stakes in start-ups and hope to earn returns later through an IPO or company sale.
"During the bubble, everyone spent time on technology, and they totally ignored the other aspects of business," like good management, says Phil Soran, chief executive of Compellent Technologies Inc., an Eden Prairie, Minn., computer-storage company. But in today's more rational market, "if you don't have good management, it's going to bite you," he says. Compellent, which is backed by venture capitalists, has recently worked on issues like career development and executive succession, Mr. Soran says.
Executive hiring is one focus for venture capitalists today. Highland Capital Partners, in Lexington, Mass., last year launched a new Web tool called CareerNet that lets candidates apply for jobs at many of the firm's start-ups online, says Michael Gaiss, Highland's senior vice president for marketing. Many venture firms, by contrast, rely on informal networking to find new talent for start-ups. But it has become more difficult to snare top-notch talent these days, since the promise of instant riches through an IPO has vanished.
Jigsaw CEO Mr. Fowler says venture capitalists were far less involved in some of the previous start-ups where he worked as a sales executive. But when he founded Jigsaw in 2003, two years after the tech bust, the investors offered hands-on help immediately. The company has raised about $6 million in funding, primarily from El Dorado and Norwest Venture Partners.
When El Dorado hosted the four management-training sessions at its offices in November, December and January, Mr. Fowler was only one of about a dozen start-up CEOs to attend. El Dorado hired a professional management consultant, Dell Larcen, to offer the executives detailed advice about how to ferret out, interview and hire top candidates for critical jobs -- and then set concrete goals to help them succeed.
Mr. Fowler says Ms. Larcen's lessons were valuable, particularly since start-ups have limited cash and little time to correct bad hiring decisions. "At start-ups, you tend to think, 'What's the fastest way to get from A to B?' You cut a lot of corners," says Mr. Fowler.
He also learned from the session that hiring the wrong top executive can cost a start-up more than $2 million, according to some research. "That gets CEOs' attention," he says. So when he hired Mr. Komo as engineering chief earlier this year, Mr. Fowler and his team used tips from Ms. Larcen. They planned strategies for the interviews in advance, agreeing ahead of time which executives should ask the candidates certain questions and reconvening after the interviews to discuss the candidates. "Without a doubt, we would have gone through a less rigorous process" if not for the management sessions, Mr. Fowler says.
Ms. Larcen says she's getting more calls from venture capitalists these days to fix management problems at start-ups before they start affecting the company's business. "The pressure [on investors] to get results now is much greater," she says.
Not all start-up executives welcome the increased attention from venture capitalists. If start-up CEOs and their venture investors don't have similar working styles, today's more-active venture capitalists "could be perceived as meddlesome or interfering," says Francis deSouza, a tech entrepreneur who recently sold his instant-messaging company, IMlogic Inc., to Symantec Corp. for about $90 million, according to regulatory filings. However, Mr. deSouza says he appreciated the expertise of IMlogic's venture board members and their assistance with tasks like hiring key executives.
Today, CEOs and their venture backers should view their relationships "like a marriage," Mr. deSouza says. "We're going to have to get along for a long time."
风险投资新使命 扶上马再送一程
首次在一家硅谷企业担任首席执行长的吉姆?福勒(Jim Fowler)现在急需在企业的具体细节管理上得到帮助。这些天来，他从一个看似不可思议的渠道──他的风险投资家那里获益匪浅。
曾是美国海军潜水员的福勒现在是加州圣马蒂欧互联网初创企业Jigsaw Data Corp.的首席执行长，这家公司为销售人员在网上买卖企业联络信息提供交易平台。他近来每周都要和一位风险投资家汤姆?皮特森(Tom Peterson)聊上几次，谈一谈经营和其他方面的事宜。皮特森还和福勒通过电子邮件保持著密切联系，时不时地为福勒提供一些分析报告或商业方面的参考意见。
去年年底，福勒还参加了一个为期12小时的管理培训课程。该课程是由皮特森所效力的公司、位于加州蒙罗帕克的Dorado Ventures组织的。今年早些时候，福勒的所学就派上了用场，他用在四次课程（主要是关于如何提高招聘水准和面试求职者）上所学到的一些知识招聘了一位负责工程的副总裁埃德?科莫(Ed Komo)。
现年41岁的福勒表示，为他的公司投入了250万美元资金的El Dorado在参与公司经营方面已经到了“令人难以置信的地步”。福勒表示，初创企业如今面临著严峻的形势，初创企业在赢利和上市方面比6年前要难得多；而风险资本家必须去证明他们的目光是正确的，因此他们花在呵护投资对象成长上的时间比以前也要多得多。
现在，风险投资在参与企业经营方面已和以前不可同日而语。在加州硅谷、波士顿、德州奥斯汀等高科技投资热点地区，企业的基本面重新引起风险资本家们的关注。他们比科技泡沫时代更加关注所投资的初创企业的经营，力求帮助这些企业提高管理水平。20世纪90年代末，风险投资公司对许多初创企业并未给予充分的关注和呵护，因为即使管理不佳的企业当时也能成功上市，为风险资本带来丰厚收益。
但现在已时过境迁。股票投资者已不再像以前那样痴迷于科技企业，风险资本家不得不更长期地持有其投资。这意味著他们不能再依赖于经验不足的管理团队来帮助企业实现迅速上市，而是必须奉行长线投资理念。据道琼斯公司(Dow Jones & Co.)旗下的研究公司VentureOne的调查，去年有风险资本背景的上市企业从获得注资到完成上市平均要花超过5年半的时间，而在1998年时，这个过程平均只需不到3年。
Kodiak Venture Partners的全权普通合伙人卢?沃尔普(Lou Volpe)表示，获得风险资本注资的企业需要花更长时间才能上市，这一点恐怕是无可争议的。风险资本如今的投资收益率也不及6到7年前的水平。
因此，风险资本家现在更频繁地介入到初创企业的日常运营当中。沃尔普表示，从招聘新的高管到申请专利，他所投资的初创企业在各个方面都需要他的协助。沃尔普以前曾是互联网转换设备企业ArrowPoint Communications Inc.的总裁，这家公司于2000年上市，之后以近60亿美元的身价出售给思科系统(Cisco Systems Inc.)。
El Dorado和Austin Ventures等位于奥斯汀的风险投资公司正准备为初创企业的管理层组织更多的培训课程，这等于是把这些职场经理人重新送回到学校回炉一下。这些培训课程可能主要围绕向中国外包业务、管理公司网站内容等问题。风险投资家往往会在初创企业中参股，然后从初创企业的公开上市或被他人收购中获利。在他们的支持下，Google Inc.和苹果电脑(Apple Computer Inc.)等一批知名企业成长了起来。
电脑存储公司Compellent Technologies Inc.的首席执行长菲尔?索伦(Phil Soran)表示，在科技泡沫时代，所有人都把时间花在了科技研发方面，而企业是否具备良好的经营管理等基本面则被完全忽视了。他说，今天的市场更加理性，如果没有良好的管理水平，就会反受其害。获得风险资本注资的Compellent近期正在研究职业拓展、挑选继任管理者等方面的问题。
招聘高管是风险投资家如今关注的问题之一。位于马萨诸塞州莱克星敦的Highland Capital Partners去年新推出了名为CareerNet的网络工具，Highland负责市场营销的高级副总裁迈克尔?盖斯(Michael Gaiss)表示，这个工具可以让求职者在线申请许多初创企业的职位。相比之下，许多风险资本凭借非正式的关系网为初创企业寻找高管。但近来越发难以招聘到一流的人才，因为初创企业高管随著企业公开上市而一夜暴富的景象已不多见。
Jigsaw的首席执行长福勒表示，他以前在几家初创企业担任销售主管期间，风险投资家很少像现在这样频繁地参与企业的运营。但他在科技泡沫破灭2年之后的2003年创办Jigsaw时，风险投资家立刻向他提供了一些心得和经验。Jigsaw筹集到约600万美元的资金，主要是来自El Dorado和Norwest Venture Partners这两家风险投资公司。
去年11月、12月和今年1月，El Dorado先后在其办公室举办了4次管理层培训课程，福勒等12位初创企业的首席执行长参加了此次培训。El Dorado聘请了一位专业管理顾问戴尔?拉森(Dell Larcen)详细讲解如何筛选、面试和招聘重要岗位的热门人选，然后制定明确的目标帮助他们走向成功。
福勒表示，拉森的课程非常有用，特别是眼下正值初创企业普遍资金紧张、一旦作出错误招聘决定可能就把整个公司拖垮之际。福勒称，初创企业的高管人员往往头脑简单，考虑得不够周全。
他还从一些研究中得知，聘请一位不称职的高管可能给一家初创企业带来200多万美元的损失。他说，这个问题有必要引起首席执行长们的关注。在今年早些时候面试首席工程长科莫的过程中，福勒及其团队成员就把拉森传授的技巧用到了实处。他们制定了面试应聘者的策略，事先安排好由哪些管理人士问哪些具体的问题，在面试之后再次碰头，评定应聘者的表现。福勒称，毫无疑问，如果没有学过那些管理课程，招聘过程肯定不会那么严谨。
拉森表示，她这些天来接到的风险投资家的电话越来越多了，要求她帮忙初创企业解决潜在的管理隐患，防患于未然。她说，风险投资家在规范投资对象经营管理方面所承受的压力比以前大多了。
并不是所有初创企业的高管都对风险投资家加强对企业经营的参与力度表示欢迎。弗朗西斯?德苏扎(Francis deSouza)表示，如果初创企业和他们的风险投资家在管理风格方面大相径庭，那么风险投资家踊跃参与经营管理会被视为“多管闲事”或“横加干涉”的举动。德苏扎是即时信息供应商IMlogic Inc.的创始人，他不久前把这家公司作价9,000万美元卖给了赛门铁克(Symantec Corp.)。但德苏扎表示，他感谢IMlogic风险投资董事会成员所提供的宝贵经验，以及他们在招聘关键职位等方面提供的帮助。
德苏扎表示，初创企业的首席执行长和风险投资家如今的关系就好比是一对“夫妻”，双方将不得不长期相处。
