Mon, Sep 16, 2013 - Page 9 News List

Starting a business requires pedigree in Silicon Valley

Despite the image that is promoted in Silicon Valley, a good idea may not be all a person needs to succeed. Connections and the right diploma are often essential for entrepreneurs

By Sarah McBride  /  Reuters, SAN FRANCISCO

“The founders, they just figure it out,” Ansanelli said about unconnected entrepreneurs. “They hustle, they network.”

Yet not everyone has to hustle in quite the same way. Brit Morin raised US$1.25 million for her craft-oriented Web site, Brit & Co, months after its 2011 launch, and another US$6.3 million earlier this year.

Investors included Founders Fund, which was cofounded by Thiel, an early backer of Facebook, where Morin’s husband Dave was an early employee. He later launched the social-networking site Path.

When asked whether her connections got her the cash, Morin said: “I don’t think any VC [venture capitalist] is going to invest in a company that doesn’t have a clear business strategy.”

The case of Gheorghe is also instructive. He immigrated to the US in 1989. By the time Horowitz met him, he had built a database-marketing firm and a predictive-analytics firm, both later acquired; worked as chief technology officer at software company SAP; and served as an entrepreneur in residence at white-shoe venture firm Greylock.

In other words, he was very much a known quantity.

The son of a Bucharest lathe operator, Gheorghe believes his first big break came from far outside Silicon Valley. While working as a limousine driver in New York in 1991, he told a client, Andrew Saxe, that he liked to code.

Saxe, who ran a marketing company, invited Gheorghe to come for a formal interview and hired him. Eventually, the two built software-marketing business Saxe Inc. Saxe died in 1999.

“The first venture investment was Andrew investing in me,” he said, adding he is not sure that would have happened so quickly in the Bay Area.

“I feel this expectation, that you have a certain background,” he said about Silicon Valley.

It is an expectation he did not feel in New York.

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