Useful Resources
Market data is highly important both before and after an investment. Getting a good sense of what a portfolio company can liquidate for in a merger or acquisition transaction or initial public offering is essential to making an educated investment decision and to perfect valuations when facilitating a transaction. Many tools exist in the marketplace, and it is easier than ever before to track venture financings and exits and see how they impact a transaction you are currently considering for investment or exit.
There aren't many resources I truly find applicable in every situation. Each opportunity requires a different approach to research, and no single tool will provide you with the whole story. I tend to keep a fundamental approach to research and using tools: The most helpful strategy is keeping up with industries, market trends, and technologies that matter most to the venture capital firm. Reading relevant newsletters and trade journals, and discussing market trends and opportunities with other venture capitalists, are still some of the most meaningful resources to me.
Advice
Nothing is ever set in stone. You can run all the projections in the world, apply risk and reward theory, work only with the smartest entrepreneurs, focus on the most promising products and markets, and still run into problems you never expected. Success as a venture capitalist depends on how well you work in times of trouble when your portfolio company needs you the most.
For entrepreneurs seeking capital, my most common piece of advice is to leam the rules of the game. Raising capital is as much an art as a science: Entrepreneurs have to understand not just their own business, but also the inner workings of the venture firm, the venture capitalists expectations, and why we have them. Too many entrepreneurs lose their savings, relationships, and more spending years chasing after venture money, only to learn that they could have avoided it all by correcting a few simple mistakes. With today's resources in the venture capital business, it is inexcusable for an entrepreneur not to understand the inner workings of a venture firm.