May 22, 2005
Tourist Venture Capitalists
Posted by Gordon Smith

The NYT has a nice story about "Tourist Venture Capitalists," those who cannot seem to find the good investments and wash out. Exhibit A in the story is Mitch Kapor, founder of Lotus way-back-when:

Mr. Kapor had enormous success investing for himself in barely-formed start-ups like RealNetworks and UUNet Technologies, both of which provided him with staggering payouts. Yet he did not prove to be a star the years he worked as a professional venture capitalist. "The fact that it's someone else's money you're investing, and that you're investing as part of a partnership, that was more different than I thought it would be," said Mr. Kapor, who went to work in 1999 for Accel Partners, another top venture house in Silicon Valley. "I later found out that everybody who makes the transition like I did says that."

Here is the killer stat: "Mr. Kapor failed to choose a single company that made him, his partners and their investors any money. He confesses he was 0-for-5 in the investments he made during his three years at Accel."

Yikes!The whole story is worth reading.

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