Tuesday, October 28, 2008

Advice from Peter Fenton: Focus narrowly and win over users. The Silicon Valley venture capitalist offers his advice to entrepreneurs looking to fund

"Before he turned 35, Peter Fenton had already made his name (and his fortune) on Sand Hill Road, thanks to early investments in tech companies such as JBoss (BusinessWeek.com, 4/11/06). In 2006, Fenton left Accel Partners for Benchmark Capital, another high-profile Silicon Valley venture capital firm that put early money into Internet giants such as AOL (TWX) and eBay (EBAY), as well as newer hot properties such as Yelp and Zillow.

He spoke with BusinessWeek.com to offer his advice to entrepreneurs looking to raise venture capital. Edited excerpts of the conversation follow.

What is the biggest mistake you see among the entrepreneurs seeking funding today?"

"Peter Fenton is only 34. Yet not only has he already led three investments that have sold for substantial amounts of money, he also was in the rare position of being fought over last year by two of the valley's most prominent venture firms. Benchmark Capital raided Accel Partners specifically to pull Fenton, who had joined Accel in 1999, over to their ranks.
Why did Benchmark bother? It could be the endurance-obsessed nature of Fenton, a committed triathlete who has completed four Half Ironman competitions and is training up to 20 hours a week for another.
"Bailing on a company is just something you don't do," he said, crediting several mentors, along with his venture capitalist father, Noel Fenton of Trinity Ventures, for the lesson. In his view, a VC's commitment should be personal and enduring.
If you doubt that Fenton lives that philosophy, just ask John Lilly, chief operating officer of Mozilla and founder of Reactivity, a 9-year-old company bought by Cisco for $135 million in February, and whose board Fenton joined in 2000, when he convinced Accel to invest."


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