OF VC’S AND THUNDER LIZARDS
The Wall Street Journal-hosted Venture Capital Dispatch blog linked to my article yesterday about the closing of independent film distributor and festival website service business B-Side Entertainment. Scott Austin’s piece focused on comments made in the piece by CEO Chris Hyams and President of Distribution Paola Freccero about the company’s fate at the hands of the VC funding model. The executives said that B-Side was on the road to being profitable but couldn’t deliver large enough returns in the time period desired by financier Valhalla Partners.
Austin points to another B-Side investor: original Series A-funder Mike Maples, Jr. and his VC firm Silverton Partners. Maples and his firm invested $3.1 million in B-Side in 2006. Last week, Maples gave a talk at the Future of Funding conference about “Thunder Lizards,” companies who, he said, “think different than other kinds of cmpanies. They exist to be huge in a very important future market, and there is no Plan B.” The talk has generated a lot of buzz in the VC community.
From TechCrunch :
The talk is highly entertaining and thought provoking. He argues against the notion that startups that want to have a huge exit need to raise big money, noting that Microsoft raised just $1 million and eBay just $5 million, in venture capital.
He says small startups can be hugely disruptive, and have proportionally huge exits. he calls these companies Thunder Lizards. He’s talking about Godzilla, which eats his competitors and disrupts like crazy. These are the market leaders, he says. Second place is boring.
This is an entertaining talk, and it’s a great window into the priorities and desires of a certain type of tech investor. Among the things Maples talks about are the imperative for new companies to be different than their competitors and for companies to have huge potential markets.
Venture Capital Blog recommends the talk for entrepreneurs. I’ll recommend it to those who are seeking investment from these kind of entrepreneurs. It’s just under an hour long and you can watch it below.