Even the Best Entrepreneurs Blow It
Seasoned business-builders typically recoil at the prospect of facing any public exposure of their failures, and they certainly don’t report their own mistakes to the world.
But Bessemer Venture Partners does just that. They actually report their “Anti-Portfolio”.
As someone who lives in the world of small business, it’s refreshing to observe that even the best entrepreneurs and investors make the same mistakes I’ve made; missed opportunities, wrong assumptions, poor judgment, and lack of foresight. All necessary lessons on the road to success.
Thanks to BVP for showing some light-hearted humility on our behalf:
“Bessemer Venture Partners is perhaps the nation’s oldest venture capital firm, carrying on an unbroken practice of venture capital investing that stretches back to 1911. This long and storied history has afforded our firm an unparalleled number of opportunities to completely screw up.
We chose to decline the investments below, each of which we had the opportunity to invest in, and each of which later blossomed into a tremendously successful company.
Our reasons for passing on these investments varied. In some cases, we were making a conscious act of generosity to another, younger venture firm, down on their luck, whom we felt could really use a billion dollars in gains. In other cases, our partners had already run out of spaces on the year’s Schedule D and feared that another entry would require them to attach a separate sheet. Whatever the reason, we would like to honor these companies — our “anti-portfolio” — whose phenomenal success inspires us in our ongoing endeavors to build growing businesses. Or, to put it another way: if we had invested in any of these companies, we might not still be working:
 Apple Computer BVP had the opportunity to invest in pre-IPO secondary stock in Apple at a $60M valuation. BVP’s Neill Brownstein called it “outrageously expensive.” |
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eBay “Stamps? Coins? Comic books? You’ve GOT to be kidding,” thought Cowan. “No-brainer pass.” |
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Federal Express Incredibly, BVP passed on Federal Express seven times. |
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Cowan’s college friend rented her garage to Sergey and Larry for their first year. In 1999 and 2000 she tried to introduce Cowan to “these two really smart Stanford students writing a search engine”. Students? A new search engine? In the most important moment ever for Bessemer’s anti-portfolio, Cowan asked her, “How can I get out of this house without going anywhere near your garage?” |
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Intel BVP’s Pete Bancroft never quite settled on terms with Bob Noyce, who instead took venture financing from a guy named Arthur Rock. |
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Intuit Along with every venture capitalist on Sand Hill Road, Neill Brownstein turned down Intuit founder Scott Cook. Scott managed to scrape together only $225K from friends, including HBS classmate and Sierra Ventures founder Peter Wendell, who personally invested $25K to get Scott off his back. |
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Lotus and Compaq (formerly known as Gateway Computer) Ben Rosen, one of the founders of Sevin Rosen, offered Felda Hardymon the chance to invest in both Lotus and Gateway Computer on the same day. Says Hardymon: “Lotus had just missed a payroll, and I was worried about the situation there. As for Gateway, I told him there was no real future in transportable computers since IBM could do it.” |
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Paypal David Cowan passed on the Series A round. Rookie team, regulatory nightmare, and, 4 years later, a $1.5 billion acquisition by eBay.” |
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Don’t Hide Your Failures-Advertise Them!
Tags: bessemer venture parnters, business failure, business honesty, embracing failure, entrepreneur, entrepreneurial failure, Jeff Chavez, northstar, Northstar Thinktank, small business failure, startup failure
April 11th, 2007 at 10:55 am
If every entrepreneur who has made it big forgot about or hid his failures, there’d be a lot fewer millionaires in the US today. My experience has been that unless you are willing to risk looking bad, learning from your mistakes and rising above your failures, your ability to enrich the lives of others is sorely limited. I have found that most big winners live large, lose loud, and always land on their feet!
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