Steven Cox - Founder of TakeLessons. Build Something You're Proud Of

Top 100 Most Connected Venture Capitalists

From Techcrunch - here's a list of the top 100 most connected VC's. Did yours make the cut?

Here are the top 10:

1. Draper Fisher Jurvetson
2. Sequoia Capital
3. Accel Partners
4. Intel Capital
5. First Round Capital
6. Dag Ventures
7. New Enterprise Associates
8. Kleiner Perkins Caufield & Byers
9. Benchmark Capital
10. Ron Conway

Whom You Know Matters: Venture Capital Networks and Investment Performance -

A VC Gets On Board with Profits, Not Revenues

I found this story from Fred Wilson, Union Square Ventures. I've always found his posts to be thoughtful and useful:

"I think that's an important part of the economics of the web that are left out of most discussions of Internet business models. Yes, we are turning analog dollars into digital pennies in many cases. But we are also doing the same thing on the cost side, maybe even more so. And I think that "operating leverage" is going to create a lot of value."Read the Whole Story at A VC, Jan 2009

Learning from Citigroup

This post is from Michael Yoshikami, President and Chief Investment Strategist of YCMNET Advisors, a wealth management firm, as quoted by CNBC

With the announcement that Citigroup is being rescued by the U.S. Treasury, the FDIC, and the Federal Reserve, a long journey has ended for this fabled financier.  Citi has now agreed to government regulation which will forever alter this once proud institution.

What lessons can we learn across the globe as we watch Citigroup fall under the Federal government’s umbrella?  Are the lessons the same in Asia?  America? Everywhere?

Indeed they are! They are universal truths we can all profit from. Understand these lessons and it will help you navigate your way through today’s treacherous environment.

1. Do not underestimate the downside for any investment. Citi hoped real estate markets would not fall. They hoped we would not fall into a recession. They hoped that the consumer would spend forever. Now they are paying the price for unbridled optimism. Examine every investment you make and ask yourself this simple question: What can go wrong and can you live with the pain?  If the answer is no, get out. 
2. Leverage can be dangerous. Use at your own risk. Citigroup has many great businesses generating hundreds of millions of dollars of revenue, but like AIG, a few decisions left unchecked by risk controls brought the entire company to its knees.  The reason for the dramatic impact -- leverage was involved.  Anyone who has ever faced a margin call knows what leverage can feel like when it goes against you. So Be Careful: Leverage can take you down a nightmare path and unwind every other profitable investment in your portfolio.
3. Face reality and run from denial.  Looking at the truth about your current situation is important if one wants to survive these volatile times.  Believing your own marketing and chants that "everything will be okay" is a recipe for disaster. Here’s a simple question to ask:  If you had cash to invest today, would you buy that same investment?  If the answer is no, then it's time to take another look at whether you should be in that position. I'm sure there are a few assets that Citi wished it didn't own. According to news reports about $300 billion worth.   
4. Learn to swallow hard and take action.  In a previous column on CNBC.com, I mentioned how important it was to not be like a deer in the headlights. Inaction rarely makes problems go away. Take discomfort in the chops and face reality.  Facing the truth now is far better than waiting until you are forced under dire circumstances to see reality. 

Of course, these lessons do not apply just to stocks. They also apply to start-ups. As an angel investor, never invest more in one company than you can handle. If it keeps you up at night, you should seek a way out. Also, take a second and third look before you pull the trigger. Do they have a sustainable model, or are they hoping to get sold before the money runs dry? Either can win, but the second is more like an option with an expiration date than an equity position.