A View on View :: Missing the Skype VC Opportunity

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Missing the Skype VC Opportunity

by Mark Evans on Wed 21 Sep 2005 12:33 PM EDT | Permanent Link

While there has been a lot of attention on the VCs that hit the jackpot with Skype (Draper Fisher Jurvetson, etc.), there are likely dozens of VCs that took a pass when the company was seeking capital. At a VON panel today on VC investment in VOIP, David McCarthy, managing director with BCE Capital, said he didn't jump on Skype because he couldn't figure out their business model. "Shame on me but I generally pass on things without a business model and will likely do so again in the future." Kudos to McCarthy for being honest about what coulda/shoulda/mighta been but truth be told, there are hundreds of intriguing technology companies like Skype looking for private equity. If they're really, really lucky, it all works out for everyone but the vast majority never go anywhere.

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Re: Missing the Skype VC Opportunity

by blogger_brent on Wed 21 Sep 2005 01:29 PM EDT | Profile | Permanent Link

About 100 VCs passed on Cisco in the 1984/85 time frame because they didn't believe in the packet switched network business, but most passed because the founders (Levin?) were complete nutcases. While David was being honest about the Skype business model, most VCs are hesitant to say "the founders just didn't pass muster". And they can be very wrong. Don Valentine at Sequoia made the bet on the Levins because he felt he could find management to replace them. Which he did and the 1,000x return is, of course, legend.

Re: Re: Missing the Skype VC Opportunity

by Mark Evans on Wed 21 Sep 2005 02:07 PM EDT | Profile | Permanent Link

nice insight. thanks.

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