VC Cliché of the Week

As I prepare to head down to DC for a board meeting this morning, I am reminded of one of the classic VC Cliches.

Lemons ripen early, pearls take longer

I am on the baord of five companies from the Flatiron portfolio.  We invested in four of them in 1999 and one of them in 2000.  Most of these companies were started by their founders in 1997, 1998, and 1999.  So they are five to six years in our portfolio now and at least six to seven years old this year.

And guess what?  They are all doing great.

That’s the thing with the venture capital business.  The bad deals reveal themselves to you early and you have to deal with the fact you made a bad investment and figure out how best to get it out of your portfolio, by either selling it, merging it into something else, or shutting it down.

The good deals take years to develop.  If you have the patience, you are almost always rewarded. My five companies are rewarding me with great years in ’04 and what looks to be even better years in ’05.

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