In his March, 2013 Forbes Magazine article, “Silicon Valley is the New Hollywood”, Steve Blank, in Truth-to-Power eye opening fashion says, “ An entire ecosystem of lawyers, PR reps, conference planners, investors, gurus and talking heads has formed, all clamoring for a piece of the industry’s cash. For those on the outside, it’s easy to get the idea that only two things matter: funding and press coverage.
“Our time as an industry of just hard workers is over,” Blank declared. “It’s no longer populated by just people who actually do s—t. It’s now full of those who make money off people who actually do s—t.”
These gatekeepers don’t just “make money off people who do shit,” these gatekeepers control the acceptance and furtherance of those who “do shit.”
In addition to the gatekeepers listed above by Steve Blank now add all those websites and organizations that try to control access and communication between members of the early stage community.
The Early Stage community consists of 4 dynamic functions:
- Sponsoring Organizations: Organizations/Programs that provide the initial Heavy Lifting – the sourcing, screening, mentoring, incubation and first outside funding for early stage companies
- Validation Partners: A public or private entity with a commercial interest in the Products, Services, Technology and Talent being developed by Sponsored Companies
- Sponsored Companies: Early Stage companies that have received sourcing, screening, mentoring, incubation and possibly outside initial investment from a Sponsoring Organization or Funder.
- Funders: Those that provide seed, angel, Series A funding to Sponsored Companies. These include Angel investors, early stage VCs, Corporate Partnering, M&A Grants/Programs
What has been (somewhere between lost and perverted) is the core mission of the entire early stage community – developing Talent and Technology. Everything else, everyone else is dependent upon successful Talent and Technology. Over the past 5+ years a wave websites and organizations have insinuated themselves between Talent and Technology (early stage companies) and funders, incubators and accelerators, and corporations.
This new wave of websites and organizations restrict the access, communication and information between early stage community members
The Angelist website says, “It’s not what you know, it’s who you know”, the 180 degree antithesis of sourcing and developing Talent and Technology.
Examples of this new wave of Gatekeeper include: Angelist and Gust control access between selected angels and startups. Techpublic, Rocketspace, Techstars Innovation, 500 Startups offer corporate – startup programs in a time and development limited structure.
This is completely upside down.
The Early Stage Community is not linear. Funders are buying Talent and Technology one day and selling startups to upstream buyers or corporate partners or merger/acquisition partners the next. Sponsoring organizations are recruiting startups one day and holding Demo Days and “Meet the Cohort” events the next. Startups are always looking for additional talent and advisors and mentors one day and looking for funding and validation the next.
Validation Partners/Corporate Development is the early stage community member most in need of constant internal and external communications. They must know what their operating divisions need and are looking for and then they must know, globally, where to find this Talent and Technology. The corporation, in most instances, does not care to develop the startup – all they really want is the Talent and Technology. So, the corporation must develop strong relationships with sponsoring organizations and Funders. The corporation must develop a platform for constant communications between corporate development and the operating divisions. The corporation must have a secure way of looking for desirable startups, communicating with Sponsors and Funders, and anonymously posting the types of Talent and Technology they are looking for.
Each member of the early stage community must perform specific tasks. No one is doing anyone else a favor. No one is above the sourcing and development of Talent and Technology.
Investors must invest. Simple as that. A VC cannot tell his/her limited partners after the 7 year life of the fund, “gee, sorry we didn’t find anything to put money into, but thanks a lot for the 2% a year we paid ourselves, You can have back what is left.” Startups should not have to genuflect to be funded.
Sponsoring organizations are constantly looking for new inventory to replace the last cohort. And, the greater the success stories graduating from Sponsors the higher quality startup the sponsoring organization can attract.
Corporate development officers cannot tell their bosses, at yearly review and bonus time, that they haven’t found any Talent or Technology to aid a corporate division.
Gatekeepers limit access, communication and interaction in the early stage community. They provide partial solutions that are inefficient and limited in who they help and who they reach.
What is needed is a global early stage marketplace providing each member of the community what they need to know, how they want to interact and when they want to communicate with each other.