While I appreciate the commitment from France Telecom and affiliates, I am convinced we are handicapped in raising beyond the $25MM threshold in the US unless we can get a real name based in the US.
Leo Hindery’s immediate influence is necessary to shore up the remainder to reach the first closing at $25MM. This can be achieved by his personal statement (certainly not by Douglas Luke) detailing his own contribution as well as others that he can arrange. The most likely to succumb to his influence are Blackstone Group, Sumitomo Corporation and maybe one other to make a first closing happen.
We need to achieve credibility with US-based investors and that’s not done by France Telecom or Sumitomo – sorry. We should gracefully accept their money, but in my humble opinion, this does not move over a hardcore US investor.
We can continue to present the deal on the East Coast, but I suggest we make some serious effort on the West Coast. For instance, why don’t we – after a first closing – make a run at Kleiner Perkins. I am certain if I can get Floyd Kvamme, Vinod Khosla and Bernie LaCroute in front of us they may be interested.
This would change the balance in negotiating power with other funds to look at us. As we have said, we complement other venture capitalists, and the deal we are proposing should be attractive to them putting money into Genesis since we are creating deal flow in a very specific area (see later)
I also believe that any effort to shore up corporate funds – like Gateway – for a first closing are futile. These guys are so far behind in their focus that we are losing our time at this point. We should come back after first closing and after some investment deals to prove the point.
After having listened to potential LP’s objections and questions in New York, I suggest we make some modifications, in particular in the section of previous investments.
People are less interested in the product/market space but are more interested in understanding what we/did specifically to help them succeed: what value was created and how. This is important to show in the document (not only tell) if we state that we are “hands-on” fund managers.
Also, I suggest we – among ourselves – spend some real quality time investigating the areas of technology, business services and enabling technology we will/should go after proactively. I don’t suggest we put this in the document since this gets floated around, but we should be more specific in our mind and in the presentations as to what sector we pick and why.
Pitching Genesis Ventures
Although I didn’t like the controversial nature of how this came about at the last meeting on Friday (with Paul Gould at Allen & Co), I liked the style and tone of our presentation; this was far more assertive and direct.
I highly suggest we get our act together and try a couple of cold runs to arrange for role playing etc etc. I have been a listener to this so far but I suggest we get a little more aggressive in our posture without coming across as arrogant.
Source: Michael Spindler