“Surefire” Capital – safe is NOT boring

September 30, 2009

Venture capital, sometimes, has a pretty negative connotation. Some of the critiques are true (the main one being that venture capital firms are a bunch of rich guys who throw a few million dollars at a bunch of companies, take ownership, disappear, and hope one makes it big) and for some VCs, I’m sure the nickname “vulture capital”, as I have been called, fits well.

Let’s look at why:

1. VENTURE is synonyms risky, chance, gamble, adventure, bet, dare, experiment, stick ones neck out, try, speculation, and hazard.

2. CAPITAL is defined as “assets available for use in the production of further assets”

So obviously, you can see how if you put these two words together “venture capital” has the ability to strike fear and wonder into every entrepreneur’s heart.

OpenView Venture Partners, I can honestly say, is very different. Here, we have EXCEPTIONALLY strict criteria that we stick with 100% of the time. From the time the Research Analyst Team started back in December, we have collectively been in touch with thousands of companies. The majority of these companies have a cool product, growing and have great business models.

How many have we invested in so far since I have been here (10 months)? ONE. We are literally looking for the needle in the haystack. And even with the economy, we are not lowering or changing what we look for.

And so far, it has proven an excellent idea. All of our portfolio companies are doing well, and historically we have never had an exit below 4.5x return on investment. So basically, for us to make an investment, a company has to have many things in place and fit a pretty tight mold with a clear path to becoming a big company in a big marketplace. This is also very relevant because OpenView’s experience and expertise are in scaling and growing these companies.

When all of these things come together, our portfolio is unstoppable!!

Market Research and Competitive Intelligence

Jillian Mirandi works in Market Research and Competitive Intelligence at <a href="http://www.netsuite.com/">NetSuite</a>. She was previously a research analyst here at OpenView.