The Wall St. Journal ran a story last week about how VCs are trying to get jiggy with young entrepreneurs by going to keg parties and sending out invites to hip-hop concerts. The story, which was sent to me by a well-known VC perhaps as a warning signal, eerily reminded me of a Canadian VC in the dot-com boom called The NRG Factory. Basically, this "incubator"  handed out money to people under the age of 25-years-old who had a good idea. These "entrepreneurs" had intriguing ideas ideas but, at best, modest skills and little business experience. Neverthless, The NRG Factory was widely hailed as the next big thing: Here's an excerpt from Maclean's magazine:


In the end, the NRG Group fell to the ground with a loud thud. Bad news for them but good news for me because my start-up was able to buy a beautiful $800, German-made ping-pong table for less than $100.
   This statement may come across as a dismissive: the energy of youth can be tempting but it's also dangerous. It's dangerous when VCs get caught up in the energy and excitement, and begin to believe these attributes can overcome experience and expertise - something that happened far too often during the dot-com boom. Far too many Web 2.0 companies are going to fail not because their technology isn't compelling but  by the lack of "grey hair" because the twenty-somethings running these companies don't have anywhere near the mangement skills to build a company - as opposed to a cool programming project. If you're a VC and find yourself at a hip-hop concert wearing a baseball hat backwards and baggy jeans, you're probably doomed.