Some venture investors are religious about stage preference. I consider myself stage agnostic. Early stage believers feel "supernormal" venture returns are driven by getting into big winners early, and thus owning a bigger percentage. I am sympathetic to this view. Owning 20% of Yahoo is indeed better than owning 5%. But owning 5% of Yahoo is better than owning 20% of Pets.com, and owning 5% of Yahoo might help you better pick the next Yahoo. Case in point, Sequoia invested in Yahoo and Google (albeit in the first round of both). The big question seems to be, can you get in the Yahoo's and Google's after the A round. Yahoo was possible. Google was not. Some businesses are so profitable they don't need the capital of a B round. And some businesses are so good the A round investors don't want to share with B round investors. But sometimes they do. Why? It seems to me that a B round investor needs a compelling value proposition to win over the founder and the A round investor. Maybe with Yahoo and B round investor SOFTBANK it was the Japanese connection? Sometimes it is intros to tier-1 carriers, or tier-1 OEMs. Sometimes, even a top 1% B round company still needs help with good old fashioned company building. Depends on the company, but top 1% entrepreneurs have their pick of investors at all stages of venture equity financing, as well they should.
So, I remain stage agnostic, and trying to focus on the top 1% early and late, particularly in data storage, wireless and nexgen advertising. Neither early nor late is easy. There is no free lunch.
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Traffic to this blog has been light. Maybe I need to buy some AdWords. It is possible my content is no good, but I need to drive more eyeballs first to figure that out.