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G-Startup – Investing in Startups is Like Marriage, Say VCs at GMIC SV

In hiring, in marriage, and in finding funding for your startup, it’s not necessarily about the money.

That was the key message venture capitalists shared with G-Startup competition hopefuls at the Global Mobile Internet Conference Friday morning.

Choosing an investment partner is almost like a marriage, said Canice Wu, president of the Plug and Play Tech Center. “It’s not like casual dating, because you’re looking to hook up for a very long time. You need a partner with the same vision working toward the same outcome. And at the end of the relationship, when you get down to an exit, it’s very important that you and your venture partner are in synch. Think carefully, pick carefully, and think of us as a lifelong partner.”

In fact, noted Stephen Bernardez of ONSET Ventures, the investors you choose may be with you longer than the average spouse.

“It used to be five to seven years, but now it takes 11 years to go from start-up to IPO. That’s longer than the average marriage in this country,” he said. “You want somebody who will work with you as a partner and who brings in the skills and resources you need over the years to get where you’re going.”

And watch out when exit time comes, warned Ethan Kurzweil, Vice President of Bessemer Venture Partners.

“I always tell entrepreneurs before they get stuck with us that it’s almost harder to get rid of us than getting a divorce would be,” he said.

While it is true that much of today’s venture capital comes out of Silicon Valley, successful startups don’t necessarily need to move to the Bay Area to win funding, panelists said. If the company has regional strengths best developed locally, founders should look for home-base funding from investors who also bring valuable connections and skills to the table. But if global expansion is on the near-term roadmap, it may be best to come mining for gold in the Bay Area.

“You want your investors to enhance your board of directors and I do that mostly close to Menlo Park, where I’m based,” Bernardez said. “A long business trip for me is to go up to San Francisco or down to San Jose. If you’re on the opposite side of the U.S. or in another country, my participation isn’t going to be as valuable to you.”

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