Following our 10 common startup mistakes panel which featured Kevin Chou, CEO of Kabam, Gary Kremen, CEO & Founder of Sociogramics (also Founder of match.com), Joe Kraus, Partner at Google Ventures (also Founder of Excite), and Phil Sanderson, Managing Director at IDG Ventures, our very own, Larry Kane, sat down with Joe Kraus for a one-on-one interview about Google Ventures and other venture firms, startup mistakes, and how to get in touch with investors.
Larry: How do you see Google Ventures v. other strategic venture funds or traditional VCs?
Joe: We're not strategic, we only invest for financial return. We invest in companies that are competitive to Google, have nothing to do with Google's businesses, sometimes has something to do with Google's businesses. We have companies that exit to competitors or non-related businesses, so fundamentally people should put us in the bucket of traditional venture capital firms [...] The primary value proposition is we're going to introduce you to potential partners and customers and we're going to help you hire senior management teams. And I'll tell you, when I was at a very early stage, what I cared most about, what I needed most was great designers because how my product looked and felt, did it tell a story, was it easy to use, that made a huge difference with traction and traction is how I raised money. Second thing I needed, I didn't need a senior management team, I didn't know exactly what my product was going to be, I needed great engineers...
Larry: How would you suggest an entrepreneur to approach Google Ventures?
Joe: The sad reality of the venture business is that referrals from people are the best way in. Cold emails and other things, as much as I want to, the reality is I'm more than inundated with the total number of people that you're getting introduced to from people that you trust and know. That's always the best way.
Larry: What is an immediate red flag which you most often see when reading business plans, executive summaries, or hearing a pitch? What [mistake] do people routinely make that you know is a problem?
Joe: There's no one thing that I can point to as 'here's the fatal mistake that so many people make.' But I do feel that the way an entrepreneur pitches his or her business is an indication of the way that they lead, the way that they talk to customers. If they can't explain the business successfully to an investor, it probably means they don't have enough clarity in their own lines about what businesses they are really in. It probably means it's very difficult for them to explain to customers as well...
To hear more from Joe about common mistakes and engaging with investors, watch the short video: https://www.youtube.com/watch?v=O6zEnHqymyg