Welcome to the Flywheel Ventures blog.

Join us March 24 to celebrate Women of Influence in NM

Dan Primack has a discussion in Private Equity Week Wire today about ongoing controversy in the SBA and claims of gender discrimination.  I will leave the veracity of the claims and counter-claims to those closer to the facts.  That said, no one can argue that getting more participation by women and minorities in venture capital and entrepreneurial management isn’t of critical importance.

So, it’s with great pride at Flywheel that we invite you to join us this Friday morning, March 24, at the Balloon Fiesta museum in Albuquerque to celebrate the nomination of the ten most prominent “Women of Influence” in the state of New Mexico.  All ten are deserving, but our pride is especially strong for two of the ten selected women:  our partner Kim Sanchez Rael here at Flywheel, and social entrepreneur Susan Matteucci with Southwest Creations Collaborative.  The entire Flywheel team will be attending the breakfast Friday morning, so stop by and congratulate Kim and Susan with us.

The breakfast is 8-9:30am, Friday March 24 2006, and additional information and signup is here.

Posted 03-20-2006, 11:08 pm, by Trevor Loy    Comments 0

The SuperSizing of VC Funds

Bill Burnham has a great post on his blog called Are VC Funds Getting Too Big For Their Own Good? in which he also makes reference to an equally good discussion by Peter Rip of Leapfrog Ventures titled Traditional Venture Capital Sure Seems Broken - It’s About Time.

Bill and Peter contribute to an ongoing discussion in the VC industry that has been building since the bubble burst.  Not surprisingly, at Flywheel we’ve been espousing similar views for years.

The gist of the problem in my view is that the total amount of liquidity available for the total universe of venture capital startups being funded by the total industry of venture capital firms is just plain too small for the math to work.  Others have made the economic argument so I won’t re-iterate it here.  Given this, one would expect a rational free market economy to adjust relatively quickly by decreasing the supply of capital available to VC firms, forcing smaller fund sizes, etc. until the problem is resolved.  In fact, this started to happen during 2001-2003, but it quickly leveled off.  Why?

I believe that the driver of the supply of capital for VC funds from the LP world has to do with a global savings glut being driven in part by increasing trade surpluses in emerging economies.... more »

Posted 03-18-2006, 06:39 pm, by Trevor Loy    Comments 2

Entrepreneurs are the Real Heroes

I’ve been going back through my favorite postings by VC bloggers and ran back across a classic by Fred Wilson of Union Square Ventures.  Fred posts a weekly “VC Cliche of the Week” discussion which is usually spot-on.  This one from last fall concerns the old maxim that “success has a thousand fathers, but failure is an orphan.”

One of the worst offenses in my opinion during the bubble days was the sense that, somehow, VCs were more important to the startup ecosystem than entrepreneurs.  VCs were rock stars who took enormous risk and were therefore deserving of magazine covers, etc.

Everyone at Flywheel has been an entrepreneur at some point prior to joining the firm, and we all think this kind of thinking is rubbish.  When was the last time a VC put a portfolio company’s payroll on his or her credit cards, or signed a second mortgage on the family home?

Simply put, entrepreneurs are the ones who take the risks, and they are the ones who ultimately deserve the rewards.  VCs are more like service providers.  The best VCs, of course, are like trusted service providers - the family doctor, high school principal, asset manager, or babysitter who provides more than a simple service-for-hire and who gradually becomes an important part of the family.  Our aspiration with each of our Flywheel portfolio entrepreneurs is to earn our way into that trusted inner circle.... more »

Posted 03-18-2006, 03:57 pm, by Trevor Loy    Comments 0

Questions Every Employee Should Ask Before Joining a VC-Backed Company

VC blogger David Beisel of Masthead Ventures has a great list of the most important questions that a prospective employee of a venture capital-funded startup should ask before he or she takes the job.

As somebody who’s been on both the employee and the funder side of VC-backed startups, I can attest to the value of this list personally.

Posted 03-18-2006, 03:29 pm, by Trevor Loy    Comments 0

Back in the saddle

It’s been awhile since we contributed our $0.02 to the blogosphere.  The growth of our own firm, and our portfolio companies, has necessarily taken priority over the past few weeks.  We’re back now and you should see more constant content updates now.

Posted 03-18-2006, 01:19 pm, by Trevor Loy    Comments 0

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