Should a Seed-Stage VC Investment Come with a Board Member?

By Connie Loizos — 5 years ago

Let’s face it: VCs speak their own language, and it’s sometimes more frat boy than Thoreau. We all know the VC who says to “trust the process” or who goes on “pity dates” with entrepreneurs. Others might joke about “putting lipstick on a pig” of an investment, or point to a newly acquired startup and say of its founder that he or she “pulled a Patzer” (i.e., left money on the table by selling too quickly).

I hate to say that Sigma managing director Greg Gretsch has inadvertently taken things to a new level with the title of his new blog post, “Don’t Let a Venture Capitalist De-flower Your Startup Without Making a Commitment.”

Still, the post has a thought-provoking premise: If an entrepreneur is going to be dazzled by a top-tier VC firm that wants to help seed his or her company, that funding had better come with a board commitment from the VC. Without one, the entrepreneur is facing a “double-edged sword.”


Is There a Tipping Point in VC?

By Connie Loizos — 6 years ago

Greg Gretsch of Sigma Partners has reason to feel confident about his future as a venture capitalist. He backed the storage company EqualLogic, which sold to Dell in 2008 for a tidy $1.4 billion in cash. He led an investment in the Web services management company TalkingBlocks, which raised $9.5 million from VCs and sold to HP. (Details weren’t disclosed but Gretsch says it was a 2x for Sigma).

Gretsch has also seen some nice exits from angel investments made long ago. The audio player company Slim Devices, founded in 2000, was one of those deals. It raised $5 million and sold to Logitech for $23 million in 2006. Gretsch was also an early backer of Postini, which raised $26.45 beginning in 1999. It sold to Google for $625 million in 2007.

Even still, Gretsch says that as he enters his 10th year in the business, he’s worried about a tipping point. To wit, Gretsch doesn’t think that the longer you’re a VC, the more skilled you become in picking winners. Instead, he theorizes that if you’re a VC for more than 10 years, you’re likely to grow worse at your job over time.