What Investors Want

What investors look for in early-stage ventures, safeguarding intellectual property, the best blogger tools, and more

What Do Investors Look for in Early-stage Ventures?

Garage Technology Ventures, a seed-stage and early-stage venture capital fund based in Palo Alto, Calif., sponsored a panel discussion with a half-dozen VCs and angel investors. A video of the discussion can be viewed at www.veotag.com/player/?u=jwpqylicme.

Among the topics: What should entrepreneurs do if their products aren't ready? What mistakes do entrepreneurs make when presenting? How should entrepreneurs and investors handle valuation?

In response to the question of how many deals over the past year came over the transom, all the panelists said either one or none, except for one investor, who said 25% of his firm's investments were cold calls (see BusinessWeek.com, 8/1/06, "15 Things You Need to Score VC Funding").

When It Comes to Collaborative R&D, the Key Is Safeguarding Everyone's Intellectual Property

"Sensitivities can arise which can cause serious misunderstandings" around ownership of jointly developed IP, says Prometheus Venture Partners, an Australian venture capital firm. In its guidelines for entrepreneurs, Prometheus advises partners to capture as much in formal written agreements as possible, and suggests providing details around these ground rules:

•In case of joint inventions, one party should file the applicable patent applications;

•The party possessing the underlying, or base, technology has dibs on commercializing products;

•Each party has the right to use any IP, royalty-free, for its own research purposes;

•If the relationship sours, the company with the core technology expertise can void the assignment and recover its IP. (For the full guidelines, see this site.)

The Best Blogger Tools

The well-known tools all have one or more significant problems, but overall, Blogger from Google (GOOG) is probably the best of the bunch, says Santo Politi, a venture capitalist and engineer. Vox and WordPress bother him the most (check out his review).

Nothing Like a Good Content Fight

YouTube came after TechCrunch, a blog, with a cease-and-desist for offering a free tool to download the giant's videos for playback. The response from Michael Arrington, the chief blogger at TechCrunch? "Well, crap."

He argues, "We created the tool only after a careful review of YouTube's Terms of Use." The YouTube legal note adds new criteria to the terms, he says. Moreover, "Similar tools are available all over the Internet and have been for some time." (Read Arrington's post at www.techcrunch.com/2006/11/15/huh-youtube-sends-techcrunch-a-cease-desist%5C.)