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What is a Venture Creation Fund?

Posted on Oct 2, 2013 by in Leadership, Startup Funding, Technology | 1 comment

Today’s post is something I’ve been thinking about for over a year and continues to evolve as I have conversations with entrepreneurs, investors of all kinds including angels and venture capitalists, as well as a continuing exploration of my own experiences.  The process of starting up a new venture is difficult, and we can all say Lean Startup 1000 times and it is still hard.  I have always organized my venture creation thoughts around: see the future, stand for something, build a team, and fundraising/allocation.

Venture Creation

Venture Creation / Entrepreneur Job Description:

See the Future: if you are an entrepreneur or venture creationist bottom line is you better be able to see the future or have one hell of an opinion about it.  The reality is this, most if not all new ventures are chasing something that doesn’t exist (yet).

Stand for Something: everyone knows it and 1000 people have blogged about it, companies become a reflection of their founder(s) and culture is important.  A new ventures success will in large part come down to what its mission is, and how that is translated into a culture to support that mission.

Build a Team:  again, this is no news alert.  Businesses are created by for and from people and the team that is assembled around a new venture creation will be drawn to a clear vision of the future and the company’s mission.

Fundraising/Allocation:  I have said it before, I don’t care if you “bootstrap”, “raise money”, or “steal it from your mothers purse”, every business is capitalized in someway but most importantly the successful companies deploy the limited resources in the most effective manner to move the ball and create value.

So, what is a Venture Creation Fund?  I have been exploring this exact concept.  Think about the typical angel investor or venture capitalist, they are reviewing other people’s ideas and places lots of bets based on “some” diligence.  A Venture Creation Fund would form its own opinions around markets (this will clearly require specialization), create a repeatable culture, actively recruit co-founders, and provide the seed funding and lead the raising of a Series A.

What do you think?  Can a Venture Creation Fund, create its own proprietary ideas, recruit leaders around those ideas, provide the initial funding, and then have a pipeline of additional money ready to review these new venture creations?  This is happening every day, already.

1 Comment

  1. I believe one example is Idealab in Pasadena, CA, founded by entrepreneur/investor Bill Gross. It has had quite a few successes. Here’s an overview from their website:

    What’s the difference between Idealab and an Idealab operating company?

    Idealab itself employs about 55 people who provide support to the start-up companies. Employees of Idealab are compensated by Idealab and receive Idealab benefits.

    Idealab operating companies are companies that are developed from ideas created by Idealab. They are legally separate entities managed by independent teams of executives who report to their respective boards of directors. Employees of Idealab operating companies are compensated by the operating company itself (not by Idealab), and typically hold stock options in the particular company, and receive that company’s benefits.

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