

Ask HN: how to be a VC? - yters

What are the keys for being a VC?<p>What do I need to take care of legally?  How do I handle marketing?  How much money do I need?  Major gotchas?<p>I'd be funding friends, but I don't have a lot of time myself.
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myoung8
Assuming you want to be a VC:

1\. set up a limited partnership (LP)--you'll need a good lawyer for this 2\.
word of mouth is how the business operates for the most part, but you could
gain some exposure by hosting/judging at business plan competitions (e.g.
Stanford's BASES Social E-Challenge, which is coming up--they're still looking
for judges I think and I know the guy in charge, so let me know if you want to
be put in touch) 3\. Money needed = (# of boards you want to/can reasonably
sit on * average amount of money you want to invest in a startup) +
miscellaneous -- most VCs make 1-3 new investments per year in the $1-$10M
range, so you would probably need about $30-$50M to have a reputable fund 4\.
major gotchas: VC investing isn't all about the money, it's really a people
business. they spend 70% of their time talking to people, most people that can
help their portfolio companies

like jgrahamc said, if you don't have a lot of time, you probably shouldn't be
a VC, look into angel investing. if you're really serious about it, try to get
in touch with Ron Conway or Mike Maples, they're two of the best known angels
in the Valley.

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yters
Whoa, $30-50M is waaay out of my price range. I'm talking really small time
here, a couple k at most. Thanks for the info though. And, I would like to
learn how the whole VC world works. I know pretty much zilch about it.

~~~
myoung8
Yeah, then you're on the scale of "friends and family" like Will said.

I suggest reading Venture Hacks if you want to learn more about VC, and the
blogs of people like Fred Wilson, Don Dodge, etc. I'm sure you can find a list
somewhere out there.

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jgrahamc
It sounds like you don't want to be a VC, you want to be an angel. I'd suggest
you look at an angel network in your location and go talk to them about what
you are thinking of doing.

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webwright
No, he doesn't want to be an angel.

"I'd be funding friends, but I don't have a lot of time myself."

He wants to be part of a "friends and family" round or two. No harm in that--
but I think most of the questions you need to ask are best answered by a
lawyer.

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yters
Can anything significant come of something like this, or is it way too small
time? I'm just a normal working schmoe, so I can only afford to support
someone's basic living requirements and simple hardware.

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myoung8
The odds are that you're going to lose money since you can't diversify like YC
or a VC can.

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sharpshoot
You have to be an accredited investor - which means you must have greater than
$1m in net assets.

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webwright
That's $1m not including real estate.

